LDC in China
China is a key market for LDC, both in the merchandizing role that made our company a global force, and in our new strategy to move downstream in the value chain, closer to end consumers
With a population of over one billion people, China is the world’s most populous nation and accounts for approximately 30% of global agricultural imports.
40 years of reform and opening up have driven remarkable and rapid economic growth and social development in China.
As the world’s second largest economy, China plays a crucial role as an engine of global economic growth, including for a host of developing countries.
China has also made great progress in improving its people’s living standards and livelihoods, which in turn has driven growing demand for agricultural products as Chinese consumers pursue a more diverse range of dietary choices and are increasingly concerned about food safety and quality.
While bulk commodities such as soybeans and cotton remain predominant in China’s agricultural imports, urbanization, changing consumer preferences and increased purchasing power have broadened the scope of these imports.
As a result, demand for consumer products like meat and coffee is growing rapidly in the Chinese market.
Given China’s importance in global commodity flows, our operations in the country represent a large proportion of LDC’s global activities. China is currently the world’s largest importer of soybeans, and we are involved in a significant proportion of its soybean import flows.
China is also a destination for many other agricultural commodities that LDC merchandizes: cotton, raw and white sugar, wheat, corn, sorghum, barley, dried distillers grains with solubles (DDGS), rapeseed, vegetable oils (soy, rapeseed, canola, palm), green coffee, orange juice, grapefruit juice, orange oil and other products.
Combining our international origination network with our capabilities in China, we offer our customers tailored supply chain and risk management solutions to secure supply and ensure product quality.
We are active in all domestic commodity exchanges in China, and are members of the Dalian Commodity Exchange (DCE) and the Zhengzhou Commodity Exchange (ZCE).
LDC’s recent activity in China exemplifies our strategy to partner with key players in the feed, food and nutrition value chain as we move further downstream toward consumers, diversifying revenue through value-added products.
In 2018, we entered a joint venture with Guangdong HAID Group to build and run a high-end aqua feed mill in Tianjin, combining soy crushing and aqua feed production in one location.
In April 2019, we agreed to build a coffee roasting plant with Luckin Coffee in Xiamen, Fujian province, and in September 2019, signed another agreement with them to establish a joint venture Luckin Juice business in China. The juice business will focus on Not From Concentrate (NFC) orange, lemon and apple juices, a business line where we already master the value chain from farms to customers, with plans to extend our control further by building our own bottling plant.
Also in 2019, we introduced three cooking oil brands to the Chinese business to business (B2B) market: Chef Fu, Fu Bai Xiang and Hong Fu Le.
To complement our B2B brands, we also launched our first high-end consumer cooking oil brand in China, Mastergold, leveraging our oilseeds know-how to address growing domestic demand for high-end oil.
In addition to our three main offices in China, strategically located in Beijing, Shanghai and Xinjiang, our industrial footprint continues to grow as we invest in facilities to deliver products that meet the growing needs of our customers.
- Four oilseeds crushing plants, located in Tianjin, North China, the Yangtze River area in East China, and the Pearl Delta Region in South China. These serve the needs of feed milling customers and vegetable oil consumers.
- An apple juice crushing plant, located at the heart of China’s apple-growing Shaanxi province, which provides top quality apple juice products to customers in China and around the world.
- A sugar refinery in Fujian province, capable of reaching the high standards of local and multinational customers in China, and helping us meet the country’s growing need for high quality refined sugar.