Business delegates who attended the Shanghai import expo sign farm contracts worth millions
Africa’s small and medium-sized agri-processing companies were big winners at the China International Import Expo in Shanghai, signing lucrative deals worth millions of dollars and increasing opportunities to latch on to global value chains.
With access to a $1.3 billion (1.14 billion euros; ￡1 billion) market, the companies say the deals with Chinese businesses will stabilize the price volatility experienced in their markets and boost productivity while enhancing efficiency in a bid to meet high standards set by the Chinese market.
In Rwanda, for example, Gashora Farm secured a six-month contract to supply chili oil to the Kaijiang Tasty Food Factory in Dazhou, Sichuan province. The deal, worth $2 million, starts this month and runs to the end of May.
Dieudonne Twahirwa, the managing director of the farm, says the deal will offer a real solution to the price volatility of the product in the international market. “It means we are going to give supply contracts to farmers on fixed price and amount. Farmers can use these contracts to secure loans from the bank because there will be a reliable buyer of their produce,” he says.
Gashora works with about 1,500 farmers growing crops on about 200 hectares of land in eastern Rwanda.
Irene Mumo, the managing director of Trueways Enterprise Ltd, a honey manufacturer in Kenya, says enterprises will have to inject investments toward innovation and value addition. She says the region has to audit the sector and formulate a strategy to grow local value and add capacity. “With the signing of the Sanitary and Phytosanitary Measures Agreement between China and Kenya, local producers have to enhance their efficiency.”
There isn’t much awareness of Kenyan products in China, she says. Chinese dealers know of multifloral honey products from the Scandinavian countries and were truly surprised that Kenya produces varieties that have a different taste, feel and look. Demand for organic and unique agri-processed products in China is high,” she says, adding that understanding the market will increase Africa’s ability to widen market share in Asia.
Nine Kenyan entrepreneurs participated in the event. They took part in business-to-business meetings with distributors that have reach across China, as well as e-commerce platforms and consumers who were interested in buying African products such as tea and coffee.
Steve Malonza, director of Primax Agencies Ltd, a Kenyan dealer specializing in the production and export of pulses and oil grains, says the Shanghai expo opened the Chinese market to regional agricultural products. Successful negotiations with Chinese companies means his company will begin shipping grains including soy beans, macadamia nuts and sesame seeds to China starting in December.
“Nevertheless, there is need for a sound and sustained strategy to enhance regional production to serve this emerging market,” Malonza says. “We also need financial products that will boost our capacity.”
Li Xuhang, charge d’affairs of the Chinese embassy in Kenya, says Chinese investors are eager to invest in the sector. In a media briefing, Li said that besides expanding exports to China, the event provided an excellent platform for foreign direct investment into Kenya. “Guangdong Silk-Tex Group of China, has announced its plans to set up a silk processing plant and a silk farm in Kenya that are expected to create over 300,000 jobs for Kenyans,” Li said.
“Three Chinese delegations will be visiting the country to scout for investment opportunities. They are organized respectively by the Council of Promoting South-South Cooperation and the provincial governments of Anhui and Zhejiang, and there will be altogether 200 entrepreneurs coming along. I am fully confident that China-Kenya economic and trade cooperation will be elevated to a much higher level, which will ensure a greater sense of fulfillment for people of all walks,” he said.
Rajneesh Bhuee, an economic consultant based in Kenya, says the expo presented an ideal platform to speed up trade cooperation between China and African countries and strengthened private-to-private partnership linkages. “This is an offshoot of the government-to-government cooperation that has dominated the landscape in the last decade,” she says, adding that the CIIE will be a game-changer for a continent that is working toward increasing its participation in global trade, especially in finished products.
Around $57.8 billion worth of deals were agreed upon at the expo for the year ahead. According to Li, China’s import of goods is expected to exceed $30 trillion in the next 15 years.
(China Daily European Weekly 11/23/2018 page30)