Companies collaborate to develop market in China

Three companies marketing deer velvet antler in Asia — CK Import Export, PGG Wrightson and Provelco — have formed a coalition to develop a market for New Zealand velvet as a health-food ingredient in China.

The companies were collaborating to achieve the critical mass needed to make an impact, Deer Industry New Zealand marketing manager Rhys Griffiths said.

In all other respects they would continue to compete vigorously with each other for sales and farmer supply, Mr Griffiths said.

Deer velvet and red ginseng — two of the two most highly-prized ingredients in traditional oriental medicine — had in recent years enjoyed an explosion in demand from South Korea for use in branded natural health products to combat fatigue and boost immunity.

"The aim of the coalition is to replicate this phenomenon in China, where locally-produced and imported velvet is still mainly used in traditional medicines.

"A Shanghai-based business development manager will be doing the ground work. Their role will be to identify and work with a small group of brand-name companies that are willing to develop and promote products based on velvet from New Zealand. Interviews for the position are now under way.

"The success of these products would likely give other companies the confidence to develop and market similar products, thereby expanding demand for velvet from New Zealand," he said.

The three companies would collectively provide most of the funding, with a contribution from NZ Trade and Enterprise (NZTE) and administrative support and some funding from DINZ.

The business development manager is being hired by Primary Collaboration New Zealand (PCNZ), a China-registered company the coalition has joined as a member. PCNZ represents several New Zealand food and beverage product marketers in China and works closely with NZTE.

The Shanghai-based New Zealand Trade Commissioner Richard Dunsheath, who attended the public launch of the partnership in Christchurch, said the coalition was a really exciting development.

"I look forward to working with them. Collaboration makes a huge amount of sense in a market as large and complex as China."

Mr Griffiths said China had introduced strict food safety laws in recent years.

"New Zealand is one of only two velvet-producing countries that can comply with these. "

New Zealand also has a National Velvet Standards Body that manages a strict code of welfare to ensure that velvet removal is pain-free. Velvet can be removed only by veterinarians, or by accredited farmers under veterinary supervision.

DINZ chief executive Innes Moffat was heartened when the companies approached DINZ with the proposal to form the coalition.

"Collaboration means companies can make faster progress in the market and it makes it easier to secure government and industry funding. The venison industry’s Primary Growth Partnership programme, Passion 2 Profit, operates on a similar basis."

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