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  • Nov 23, 2014
  • Updated: 2:42pm
BusinessChina Business
AGRICULTURE

Former Lenovo VP goes from microchips to mulch

Chen Shaopeng has used skills he learned helping to run world's top computer maker to establish cutting-edge fruit brand Joyvio

PUBLISHED : Friday, 20 December, 2013, 9:39am
UPDATED : Saturday, 21 December, 2013, 3:06am

At first glance, the information technology and agriculture sectors would seem to have little in common. The former is often associated with the latest innovations in advanced technology, while the latter is a much more traditional segment geared to meeting basic needs.

Yet Chen Shaopeng, who changed careers from helping to manage computer-maker Lenovo to heading an agricultural firm, found that his work experience in IT was of great help in building an agricultural business from scratch.

Chen was a senior vice-president of Lenovo Group, the world's largest PC manufacturer and vendor, overseeing business in emerging markets including Greater China, Asia Pacific, Eastern Europe, the Middle East, Africa, and Latin America.

Two years ago, the turning point of his career came when Liu Chuanzhi, founder of Lenovo and chairman of Legend Holdings, asked if he would be interested in running a modern agriculture business and establishing a world-class food brand in China.

We’re pioneers in this sector and what we’re doing now might change the industry

"I always had the urge to start a business on my own. So when Mr Liu approached me, I thought: 'This is a good opportunity,'" Chen said. He then accepted the appointment as president of an agricultural venture run by Joyvio Group, a subsidiary of Legend Holdings, the parent of Lenovo.

That was two years ago, and Joyvio is now China's largest producer of blueberries and kiwifruit in China after acquiring farms in Shandong and Sichuan provinces, as well as in Chile, Australia, and the United States. It also introduced strong varieties of fruits, followed strict planting and processing procedures, established a product tracing system, and developed an end-to-end sales network to ensure the high quality of its produce.

Joyvio launched its own blueberry and kiwifruit labels in May and October respectively. More products, including cherries, grapes, wine and Chinese green tea are in the pipeline.

"To ensure product quality, we cover the whole industry chain, from the land to the dining table. It's just like completing a jigsaw puzzle: we fill it in piece by piece," said the 44-year-old entrepreneur.

China is one of the world's largest agricultural nations, but its level of modernisation is still low. Chen's background in IT and strong support from Legend gave him the confidence to do something different.

"Agriculture is actually a very hi-tech and demanding industry. After being in the IT industry for so long, I know very well what the world's most advanced technologies are, and which can be applied in agriculture," he said.

"It also deepened my understanding of the idea of building a whole industry chain, and enhanced my ability to understand the nature of problems and handle complex issues."

Chen worked at Lenovo for two decades. He started as a salesperson and after an outstanding performance in several regional markets, was promoted to vice-president in 2001, managing the commercial-desktop business unit and then the marketing and sales groups.

After Lenovo announced the acquisition of the PC business of its American rival IBM in 2005, Chen, then the head of the entire China market, played a key role in the integration of IBM's business.

In 2006, he was promoted to the position of president for Greater China, and three years later he was appointed as the president of Lenovo Emerging Markets Group.

Under Chen's leadership, Lenovo grew into the No1 industry player in global emerging markets.

In 2007, he was selected as the China Economic Person of the Year by state television station CCTV.

 

Lenovo's route to success was to become a strong brand in local markets before going to foreign markets. Yet Joyvio chose to be a global company from the start by acquiring farms and hiring experts from overseas.

Why the different strategies?

We had two issues to address when we started to tap the agriculture market. One was that the industry is still mainly supported by small farmers and lacks large-scale production; the other is that food safety still remains a top concern in China today, and consumers are short of confidence in local food.

So we decided to make use of global resources at the very beginning, adopting advanced technologies, realising large-scale production and growing the best fruit we could. This was necessary to establish a trustworthy brand.

 

How does Joyvio make a difference in the farms it manages?

We encourage family farms and agricultural co-operatives to work with us. This is very different from the "small farmers" model that is commonly seen in China's rural areas.

We are mulling over an original design manufacturer (ODM) model to get more individual farmers to plant fruit in line with our criteria.

High technology also plays an important role in our operation. For example, we have been using remote sensing satellites to monitor pesticide spraying, and our technicians are able to watch over the fields in real time with a smartphone.

 

How has the development of the agriculture industry in China compared with the development of the IT sector, and what is the outlook for agriculture?

 

Agriculture is a sunrise industry forever. In China, modern agriculture is still in its initial stages of development. Compared to IT, it takes longer - usually five to seven years - to see an agricultural project pay for itself, based on the crop's growth cycle.

But what's good about agriculture is that the threshold to get into this area is relatively high and the return is stable. In the IT industry, a subversive technology can deal a severe blow to a well-established company, like what Nokia and Kodak have experienced before. Yet this would not happen in agriculture.

 

What is the biggest challenge you face and how do you deal with it?

Lack of professional talent is the biggest difficulty for us. We have set up training programmes in some universities, offering students the chance to major in agriculture to work on our farms, and teaching them our technologies and management methods.

Another bottleneck is refrigerated transport. All of our products at the moment are fresh fruits, and refrigerated transport in China is underdeveloped.

We have invited US experts to help us build our own cold stores and distribution chains, and they're expected to be in place in three to five years, when our capacity grows bigger.

 

How do you feel about switching from IT to the agricultural industry?

There's pain and pleasure at the same time. The workload is huge, since we do everything from scratch. Sometimes we need to work 24 hours daily and seven days a week.

But there's also a strong sense of achievement when we break through a technology bottleneck or find a solution for a problem.

Joyvio is a much smaller company than Lenovo. But we actually think bigger, as we are pioneers in this sector and what we are doing now might change the industry.

This gives me a strong sense of mission, and my passion for this business grows greater every day.

 

What investment has Joyvio put into its projects, and what are your expansion plans for the future?

Legend Holdings has invested around one billion yuan (HK$1.27 billion) in our business and the investment may climb to two to three billion yuan in the next few years. Joyvio will be part of the assets of Legend Holdings, which is expected to go public in 2015.

This year, Joyvio produced around 2,000 tonnes of blueberries and 4,000 tonnes of kiwifruit. This is still a small quantity for a big market like China. We plan to expand our kiwi planting area in Shaanxi and Hubei provinces over the next few years.

 

Do you have any advice for anyone who is interested in joining China's modern agricultural sector?

First, I'd tell them the agricultural industry is still at a very early stage in China. Second, that there's no fast money to be made in this industry.

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