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INTERFOOD BV ERIC VAN RIJN Brussel, 14 November 2007 Presentation CATSEI. MISSION. We want to be the best and most successful supplier of dairy products in the world. OUR VALUES FOR OUR CUSTOMERS AND SUPPLIERS. Full service partnership Reliability Professionalism
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INTERFOOD BVERIC VAN RIJNBrussel, 14 November 2007Presentation CATSEI
MISSION We want to be the best and most successfulsupplier of dairy products in the world
OUR VALUES FOR OUR CUSTOMERS AND SUPPLIERS • Full service partnership • Reliability • Professionalism • Delivering competitive advantage • Global sources • We care: so we take care
OUR PRODUCTS: HUMAN CONSUMPTION • Milkpowders • Butter / Butteroil • Cheese / cheesepowders • Proteins • Whey products
OUR PRODUCTS: ANIMAL CONSUMPTION • Leivita • Feedolac
Facts & Figures • More than 37 years experience • Over $ 800.000.000 turnover • 180 employees worldwide • Over 300.000 mt of products per year • High volumes / low costs
China’s dairy industry • Production volume: 32.9 mln. mt. in 2006; 6% of world total cow milk production. • Total number of cows: 14.3 mln.; fast growth in import of cow stock mainly from NZ and AUS • Feeding practice changing to feed based. • Cow yield is quite low low (approx. 2000 kg/year vs 7000/8000 kg/year global average)
China’s dairy industry • Production season: May / June / July (peak) Dec / Jan / Feb (low; 30% of peak) • Dairy surplus and deficit exists • Dairy belt responsible for 75% of total milk production. • Household farms responsible for 82% of total milk output. • Approx. 1300 dairy factories; impossible to give proper supervision by authorities.
Conclusions • EU share is relatively low except for whey. • France dominates EU whey exports to China. • FCMP, SMP, Butterfat and Cheese predominately from Aus/NZ and USA. • FCMP and Butterfats imports decreasing.
Exports • Relevant since May 2007. • Estimated volumes FCMP approx 20.000 and approx. 1000 mt of Butter. • Quality; inconsistency in quality. • Low commercial reliability.
Practical problems export to China • Minor role EU in exports to China, due to competitiveness or taste issues (fcmp). • Importance of imported milk powder is decreasing in favour of local liquid milk production. • Feed grade requires registration. • Import duties and VAT in China for all origins same. • whey 6% and FCMP / SMP / Butter 10%. All + 17% VAT. • Intransparency of official regulations; • import ban dutch feed grade without official announcement. • Example whey permeate vs whey powder, food vs feed.
Practical problems export from China to EU • Export relevant recently. • Food & Feed applications not allowed by EU; only technical applications. • Raw milk quality is generally below international levels and varies in different regions in terms of fat/protein and bacteria content. • No large scale or centralized feeding, sanitation and quality testing systems. • 50% manual milking difficult to increase quality
Export experience ex China • Lack of dairy technicians/knowledge to improve product quality consistantly risk of product claims. • Intransparent communication between China Inspection & Quarantine and local officers; high level of bureaucracy; resulting in long lead times.
Shortage of test equipment for import/export business, creating long lead times. (e.g. radio activity testing only possible in Shanghai/Beijing; delays 7-15 days normal) • Local inspectors short on basic knowledge; creating problems in getting correct documents payment risk with l/c’s from buyers. • No uniformity in documents issued by different Chinese provinces; unability / unwillingness to complete official documents; some officers are very cooperative, some are not risk.