Poultry trader returns to his mainland roots
Mark Han Jia-huan has always recommended people eat more chicken. His reasoning is quite simple - each kilogram of chicken meat requires 1.8kg of feed, half the amount required for pork and a quarter for beef. Han, born in Taiwan, has another reason of course - he is the owner of DaChan Food (Asia), one of the largest poultry suppliers on the mainland, meaning he would be one of the first to profit. Han talks about adapting to Beijing life, his family's mainland roots and tough competition in the poultry market.
How long have you lived in Beijing?
Four years. I decided to move to Beijing with my wife, because the mainland market has grown very fast and I felt like I should be on the front line of the expansion campaign.
So you have been in Beijing long enough. Do you like the city?
Yes, very much. This is a city with great culture, variety and tolerance. I understand people complain about Beijing's air pollution and traffic jams, but sometimes that's the price you have to pay to enjoy the other pleasures. I'm a member of a club that consists of more than 100 entrepreneurs and we have decided to help grow trees in parts of Inner Mongolia to stop dust storms blowing into Beijing every spring. I think everyone in the city should realise that they are part of the reason for the pollution and do their bit to fix the problem.
Many people have complained that the temporary traffic control measures for the National Day parade have disrupted their lives.
It definitely does. But I bet many people will not mind giving up a little to make way for the big parade. It's a mixture of good and bad living in the capital city.
It sounds like you really know this city well.
Yes. My company has been doing business on the mainland for more than 20 years. We first started in Shenyang and Shenzhen, and then gradually extended our business to other cities.
Did you pick Shenyang because Liaoning is your father's home province?
Yes. My father is a native of Dalian. He left for Taiwan in 1948 and has been doing business there every since. Early immigrants from the mainland prior to 1949 were called 'people from outside the province', and my family fit well in that category.
Among them, there were huge differences between people from the north and south. For northerners, our main businesses have been mostly food-related, like raising chickens. For southerners, the major businesses have been making clothes or manufacturing. So raising chickens has always been in my family's blood.
When Taiwan eased its restrictions on investing on the mainland, your family decided to expand the chicken business across the strait?
Yes. We think there is great growth potential as the amount of chicken consumed here is very low. One thing I can tell you is that Chinese on both sides of the Taiwan Strait have the same habits, especially in diet. When Taiwanese eat 20kg of chicken meat a year while the number is only a few kilograms on the mainland, you know there must be great business opportunities.
What are the risks in raising poultry - for example with bird flu?
I think everyone knows bird flu now, but the disease may not affect your chickens if you have done enough homework on disease prevention. We have 300 contract farmers who raise chickens in accordance with standardised procedures and supervision.
We asked our contract farmers to build their chicken houses far away from any buildings, and that kind of segregation guarantees most diseases will not penetrate our bases. We send quarantine employees to inspect these chicken houses many times a year and help instruct them on how to prevent diseases.
Can you still make a good profit with all those measures?
The profits for our contract farmers have been steady, at about 1.5 yuan (HK$1.70) per chicken. Our profit has been good, too. I don't think DaChan is a company that looks for high short-term profits. We are mostly looking for a revenue model that could help the company's profits and scope grow steadily.
Food safety on the mainland is still a big problem. There are many reports of sick chickens being sold in local meat markets.
Yes. That could have happened because it is hard for food inspectors to screen every single chicken product. I think people are more aware of food safety, and that's why we are doing well by offering better transparency and quality guarantees.
Who are your competitors in the Chinese market?
You know what, it's interesting that everywhere you go [in Asia], you will probably see the same bunch of international companies competing head-to-head with you. For the mainland, US-based Tyson is our main competitor. Many smaller regional chicken producers have also grabbed certain market shares in their base cities.
For US companies, I'd say they are not honest players in the Chinese market, especially Tyson. For cultural or traditional reasons, US people like to eat chicken breasts, and US firms sell chicken breasts at a premium in the US while dumping chicken wings and thighs on the Chinese market.
On the other hand, the US has banned the import of chicken products from the Chinese market, which has allowed US companies to enjoy high profits in that relatively closed market. I honestly think it's far from a fair game.