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SCMP Reporter

Despite the popular belief that China has enough rice to feed the world, Hong Kong's leading rice distributor believes the mainland is hungry for imported rice and sees a market with untapped potential.

Golden Resources Development plans to bolster its foothold in the mainland after reporting strong financial results, managing director Alvin Lam Kwing-wai said after the company's annual meeting.

He said sales in the mainland already made up about 10 per cent of the group turnover.

While he declined to disclose the company's total planned investment in the mainland, he said it would focus on staff training, logistics support, distribution and marketing.

Having shut down two rice factories in Wuhan and Sichuan, Mr Lam said resources would be redeployed to Guangdong and markets in the Pearl River Delta, where more than 7.7 million tonnes of rice were consumed last year.

Consumers in more economically developed regions were becoming more discriminating in their choice of rice.

'Although the mainland could produce enough for its population, consumers from Guangdong and Pearl River Delta regions are receptive to new flavours and continue to demand high-quality rice. There's huge potential for imported rice,' he said.

Golden Resources is perhaps best known for its Kangaroo Brand rice, which is imported from Australia and features a kangaroo on the packaging.

Australian rice poses a surprising challenge to rice imported from other countries, making up about 10 per cent of the Hong Kong market.

Mr Lam said that while Australian-imported rice had proved popular in Hong Kong, the company's attempts to export it to the mainland had been less successful because of a lack of support from Australian authorities.

Australia was yet to realise the potential for its home-grown rice in China.

'Australian rice production has experienced very good harvest years lately, but the Australian government needs to push harder to enter the mainland market,' he said.

He said negotiations had begun with mainland agricultural authorities for import permits for Kangaroo Brand rice once China entered the World Trade Organisation.

Marketing the group's brand names would be a core part of its corporate strategy in the mainland.

'For a distributor like us, it is essential to maintain stable rice quality and pricing over time. But the out-sourcing system in the mainland is often not organised enough,' Mr Lam said.

He said Golden Resouces would consider expanding its market share in the mainland by acquiring local distributors.

The group, which has total assets of about HK$1.2 billion, reported a net profit of HK$110.3 million in the year to March 31, an increase of 2.8 per cent over last year.



Mainland viewed as big importer of rice