Primary Collaboration helps NZ primary sector connect to Chinese market
Primary sector support born from Te Hono’s inaugural bootcamp
The concept of Primary Collaboration New Zealand (PCNZ) was born out of the inaugural 2012 Te Hono Bootcamp. The founding companies include Sealord, Silver Fern Farms, Synlait Milk, Villa Maria Estate, Kono and Pacific Pace. Combined, these companies represent approximately NZ$3.3 billion in exports for the New Zealand economy. They represent the following categories – wild caught seafood, free range beef, lamb and venison, infant formula and dairy based nutritional ingredients, sustainable wine production and marketing, farmed mussels and oysters, fruit leathers, apples, and king salmon.
Identifying China as a key future market, these founding companies elected to establish a New Zealand-based entity to gain a better understanding of the complex Chinese market and facilitate easier access to China. Support and funding were provided both by the participants themselves and various government departments including Te Taurapa Tūhono New Zealand Trade & Enterprise.
New Zealand’s primary industry gains in-market support in China
PCNZ NZ established a China services company known as Primary Collaboration New Zealand (Shanghai) Co. Ltd (PCNZ SHG) as a wholly foreign owned enterprise in Shanghai to provide ‘in-market’ services in the People’s Republic of China.
A common factor amongst the group is the control over the supply chain right back to the orchard, farm, quota or vineyard. This control guarantees supply to service international markets.
Benchmarks of PCNZ success in supporting our exporters into China
Staying true to due north
A range of business consultancy services are offered to clients including access to central Shanghai office facilities, the ability to employ market managers to represent brands, administration and project management staff and opportunities to collaborate on promotional programmes.
Gaining Chinese market insights for lower cost and risk
Market knowledge is a valuable commodity in relation to the value chain and customers. As an innovative business model for New Zealand, PCNZ SHG lowers the cost and risk of entry to China. The concept enables clients to provide a higher level of and locally-based liaison with their respective importers, wholesalers and customers. Further, PCNZ SHG will grow relationships with Chinese authorities and New Zealand government agencies in China.
Establishing a structure and project delivery resources
A board of PCNZ has been established with one member from each of the founding partners, and a subcommittee was formed to oversee the establishment of PCNZ SHG. Throughout the establishment the clients have engaged a range of professional service companies to ensure a solid foundation for PCNZ SHG. These include legal, HR and accounting services.
Hiring top talent
Kevin Parish was hired as the PCNZ General Manager.
Market Managers - Claire Tan represents Silver Fern Farms, while Nichole Mao represents Villa Maria and Jacky Qian represents Pacific Pace.
Other clients are in varying stages of recruitment.
Office manager and receptionist / events coordinator have recently been hired to support the customer facing team.
Next steps aim to springboard primary sector expansion in the Chinese market
Immediate priorities for the business will be on recruiting market and country managers to establish the processes and procedures to ensure that PCNZ SHG is compliant and effective in delivering its services. This includes the engagement of a range of service providers including payroll, accounting and travel.
A key focus for the future will also be to look at how clients can collaborate to leverage their individual capability to achieve results beyond what they would have achieved individually.
As it is the clients who decide what services best suit their needs, these services will evolve over the next few years. The structure of the entity has been created to allow clients to enter PCNZ SHG and then if required graduate to establish their own Chinese entities – effectively using PCNZ SHG as a springboard into the Chinese market and fulfilling the ultimate goal of facilitating easier access into China and thereby unlocking the value of New Zealand’s primary sector.
Actions - 2017
ANZCO joined the PCNZ initiative in Shanghai. "Being part of PCNZ gives us quick and proven access into the China market. In addition, collaborating and sharing information with other like-minded New Zealand businesses will be extremely valuable,” says Peter Conley, CE, ANZCO Foods.
K9 Natural has partnered with PCNZ to take on the pet food category in China. "Our K9 & Feline Natural brands have already developed strong reputations amongst Chinese pet owners largely from the work we have done in markets outside China. Joining PCNZ gives us a great platform to build on this inside China with an in-market presence making us much more responsive to the opportunities presented," says Neil Hinton, CEO, Natural Food Group.
The business has continued to grow and prosper, and most importantly the constituent shareholders’ and members business continue to grow.
New members joined PCNZ (SH) including Rockit Apple, Douglas Pharmaceuticals, NZ King Salmon, and Taharoa Ironsands.
Two shareholders, Silver Fern Farms and Synlait, ‘graduated’ from the PCNZ offices to establish their own standalone businesses (Wholly Owned Foreign Entities) in China. They grew from one staff member each in 2015 to four (SFF) and five staff (Synlait) respectively, and have grown their China revenues into the hundreds of millions of New Zealand dollars.
Rockit Apple further endorsed the PCNZ model by buying Kono’s shares in the business. After four years of successful leadership of PCNZ from its founding moments, Kevin Parish chose to re-patriate to New Zealand, and David Boyle was appointed as CEO. David’s previous experience with assisting PCNZ’s HR processes in Shanghai, assisted an easy transition.
The PCNZ Board and CEO went through a Strategy Review of PCNZ’s work to date, and future directions. It was agreed after review, that PCNZ’s core directions would continue to centre on the successful introduction, development and growth of New Zealand companies to China (‘Bigger, Better, Faster’) and secondly to reduce risk and cost of China entry for our businesses, by ‘Growing Knowledge’ of the China business landscape. These two core strategies remain true to the founding ideas discussed in the Te Hono workshops at Stanford University in 2012, further proving the worth of the Te Hono programme.
Whilst this year has been highly turbulent for everyone, PCNZ has been fortunate to be operational throughout the first six months of 2020, albeit with work-at-home regime in February and March. Working in the China-New Zealand nexus, inside which both countries have adopted strong health protection systems, PCNZ’s market manager and country managers have continued working hard to keep New Zealand’s produce flowing across the borders into China.
Indeed, PCNZ’s shareholders and members in New Zealand have been effusive in their praise of their staff representatives in China, who have been ‘on-the-ground’, redirecting products across channels, lowering barriers, and staying in close contact with Chinese customers. It might be said that this year has been a glowing endorsement of the PCNZ model, of collaboration, and local knowledge.