Market Entry Strategies

INTRODUCTION and GUIDELINES

OF

ENTERING CHINESE VEGETABLE OIL MARKET

Student names: Ming Zheng & Chen Zhao Student numbers: 357386 & 301897 Coach: Wim Speulman Date: 18-03-2011

PREFACE
This report is written by two Hanze IBS students, who are required to study the MES which stands for Market Entry Strategies. And furthermore, we are asked to use the theory and knowledge into the real business world. From the name of this course we can generally know the main objective of this subject. According to every groups preference and advantages, we are divided into 8 groups and assigned different business situations. We group 9 as the only one extra group that only consists of two persons, have been given an extra assignment that is seeking one or more appropriate vegetable oil suppliers for Sandostine, a Dutch local import-export company. In Mr. Wim Speulmans lecture, we learned that before you start doing business in the brand new market, you shall study the culture background of the people who you are going to deal with or at least learn their habits and customs first. But since both of our group mates are Chinese, therefore there is no culture barrier at all. Besides, one group member from south and the other from north, such combo will make the culture background more completely. As a result of this, we know quite well of the Chinese people and China. By the precious opportunity to write this report, we have gained the knowledge of market entry strategies deeply in our minds. We really appreciate this course that brings us to the interesting real business tour.

CONTENTS

EXECUTIVE SUMMARY ..........................................................................................4 1. 2. 3. 4. INTRODUCTION................................................................................................5 COURSE CONCEPTS.............................. ..................................... ......................6 METHODOLOGY...................................... .................. ............................... .........7 CHARACTERISTICS OF THE TARGET MARKET...................................... ...8 4.1 Culture background of China.............................. .............................. .8 4.2 Doing business in China..................................................................... 9 4.3 What to pay special attention to....................................... ................11 SELECTING IDEAL SUPPLIERS....................................................................12 5.1 Summary of suppliers in China..................... ................................... 12 5.2 Production scale........................................... ....................................12 5.3 The developing trend of vegetable oil in China...............................13 CONCLUSION....................................................... ................................ ............14 RECOMMENDATION.............................................. .........................................1 5 IMPLEMENTATION PLAN................. ............................. ................................16 APPENDIX................................................................................................ .........17

5.

6. 7. 8. 9.

EXECUTIVE SUMMARY
In the beginning of this report, we will give you an introduction and general information of the import and export company Sandostine. After that, a detailed procedure will be given that how we search and choose the ideal vegetable oil exporters in China for Sandostine. The principal advantage makes our group the best consultancy for Sandostine is that both the group partners from our group are Chinese. And we both can speak English; one of us can even read and speak Dutch. All these advantages lead us to a professional position in conducting business between Holland and China. In the analysis of company profile we provide you a list of 50 different vegetable oil suppliers with classifying them by different standards. In this part, you can easily find your ideal business partner by different requirements. For instance, which kind of product you want to import, sunflower oil or peanut oil, etc. The detailed information and profile of all the selected companies can be found in the appendix. There you can see their company scales, main products, locations and contact information, etc. By the end of this report, a revised and detailed recommendation and implementation plan will be given. We believe that by following the instruction and rules of this guideline a new route of business can be discovered and one after another business will be made. Thank you.

1.

INTRODUCTION

Sandostine1 is a Dutch import-export company, with offices in the Netherlands and on the Canary Islands. This company established in 1990. Their products include: frozen foods, canned products and products that don't require cooling or freezing such as: oils, flower, dairy, diverse soft-drinks, energy drinks and alcoholic beverages. All the purchase and sales are broadened to world-wide. They deliver products to wholesalers, importers and other production factories. Their main markets are Eastern Europe and Western Europe. At this moment, they are interested in Chinese vegetable oil suppliers. They hope to develop a brand new business area in the vegetable oil industry in China. This report mainly introduces the characteristics and features of the vegetable oil industry in China. After having a general glance of this industry, we will furthermore give a guideline of how to conduct a successful business in this industry with Chinese businessmen.

http://www.sandostine.nl/

2.

COURSE CONCEPTS

Many companies successfully operate in a new market without ever expanding into new markets. However, some businesses could achieve increased sales, brand awareness and business stability by entering a new market. These examples of success are not just happening by a chance. It is a special science in marketing area: Market Entry Strategies. Entering a new market which is as big as China seems like a huge project for a lot of small and medium sized companies. The size of the country, number of opportunities and sheer geographical size often leave a company wondering where to start. But there are still many companies and investors come to this land every year because they know it has a big potential. At MES we understand that it is the first step for the small to medium size companies entering this market and finding a right position to locate. How to make this first step correctly and also save as much as expenses, therefore, becomes the initial research objectives.

3.

METHODOLOGY

In order to find out dozens of alternatives for our client, we have used a few methods that we consider are helpful and useful. There is a tiny shortage that currently occurs, that is we are in Holland at this moment, so we cannot conduct some directly primary research. But regardless of this weakness, we can do some indirectly research, actually it went well and smoothly. We send out online questionnaires to our friends and acquaintances, from their replies we collect data and find out what is popular and famous in China in the vegetable oil industry. Besides, we have made phone calls regularly to the goods suppliers in China. Since the number of the suppliers is very huge, we can only pick up several companies and call them randomly. Even though the primal research is somehow limited, the result of it is still adequately. What we have done more is secondary research. Different from the last few decades, we dont really need to stay in the school library for couple of days, reading piles of books finding data. Everything nowadays can be found in the internet, no matter books or websites. This method also saves plenty of time for us. And actually we both prefer this method. Its not hard to find hundreds of online international trading websites which offer thousands of alternatives company detail and contacts information. The only thing a bit time consuming is reading the information of every company. But we know this is necessary and useful. The methods we have used are recommended in the text book of Business Research Method 2. All the references will be put in the appendix.

Saunders, M et al 2009 Research Methods for Business Students (5th edition) Prentice Hall, Great Britain ISBN 978-0-273-71686-0

4.

CHARACTERISTICS OF THE TARGET MARKET

China's business culture is very much different from Western business practice. If you intend to conduct business with Chinese people, it is good advice if you can learn some basic Chinese business culture before making the decision. By determining and understanding a particular group of people which is your business cooperators, you can create a stronger and better business. As a result of this, it is considered necessary to study the culture background and business habits of Chinese people. Here we conclude three different aspects that may help our client in dealing business with Chinese people.

4.1

Cultural Background of China

There are many potential hesitation and unfounded fears about doing business in China. We hope that by collecting useful information we can help our client overcome the obstacles and challenges of doing business in China while providing them with a healthy concept about what it will take for them to succeed in today's China. The number of foreign companies and individuals that seek information about both the rewards and risks of doing business in China is increasing every day. Based on the special situation, cheap material cost and labor cost, importing from China has become more and more popular for the foreign companies. \ Talk about the Chinas business culture, the first thing that must mention is Guanxi. Perhaps you have already heard of this, its not strange because this is a really famous and important element in Chinese business culture. The literal translation for Guanxi is relationship, but in China this relationship means much more. You have to build up your own relationship network which is Guanxi, the bigger you develop this network, the more benefit you get from it. In the appendix, we have prepared a beautiful article for the topic of Guanxi, there you can see how important it is throughout the whole business world in China and how to master it and let it work for you.

4.2

Doing Business in China

The Chinese business practice is quite different from the Western method that most of

us may be used to. Of course, with the Chinese economy opening up, China's joining of WTO and the Olympics in 2008, many Chinese business practice are now beginning to align with more international ways. However, China will always have their own unique business culture, given their unique history and background. Since culture differences do exist, some awkward consequences may be caused by this. To avoid similar cultural disasters, here are some tips on how you can conduct a more successful business in China. 4.2.1 Business Relationship in China Chinese business relationship usually becomes a social relationship even the business has ended after a while. Unlike Western business relationship which just remains professional and perhaps, aloof, even after a long time, Chinese business relationship becomes a social one. This is also representative of Asian business culture. The more you share your personal life, including family, hobbies, political views, aspirations, the closer you are in your business relationship. Sometimes, a lot of time is spent discussing matters outside of business, but then a lot of time, the other party is also making up his mind about your deal based on how much he sees your personal relationship with him. 4.2.2 Seniority is important in China Seniority is very important to the Chinese especially if you are dealing someone in a high position of that company or whos working in the government. They are more likely to be called Chairperson So and So or manager so and so instead of Mr. or Mrs. so and so. When giving out name cards or brochures, make sure you start with the most senior person first before any other young people. When giving out a name card or receiving one, ensure that you are stretching out with both hands with the card. Remember to face the card you are giving out in a manner. 4.2.3 Giving Face or Gei MianZi Giving face (showing respect) is a very important concept in China. You must give the appropriate respect according to rank and seniority. For example, if you are buying gifts for the first meeting, make sure you buy better gifts for the senior managers instead of buying same gifts to all the people you meet. Similarly, sitting positions in a meeting room or a dining table is accorded accordingly to rank, importance and seniority. It is good to hear some advice before attending your first meeting with Chinese. If necessary, observe others move and then reflect appropriately rather than impetuous making the wrong move.

4.2.4 Gifts and Presents Although giving gift is very common in China from the ancient time till now, gifts are always appreciated and especially in the smaller cities or towns, will continue to play an important part in your business relationship. Similarly, receiving gifts from the Chinese also shows your respect, especially Chinese art products. It is polite and wisely that not to refuse, especially if it is not of too high a monetary value. 4.2.5 Lunch/Dinner in China There is no business talk in China without at least one dinner together in a restaurant. Sometimes, your Chinese friend could have invited you to the restaurant even before any business discussion take place. Inevitably, the restaurant will always be a deluxe one and you are likely to be hosted in a private room. There is an elaborate seating arrangement for a Chinese business meal. There are fixed seating positions for the host and the guest and then they are seated again according to seniority. This is a very important aspect of a formal dinner and it is important that you follow the rules accordingly. However, it seems that the Northern Chinese are very particular to this formal seating arrangement while the Southern Chinese has loosened the formalities steadily these years. 4.2.6 Drinking with the Chinese The Chinese are big drinkers especially in Northern and Western China. It does not matter if it is lunch or dinner; as long as a meal is being hosted, alcohol is a must. Chinese wine is the favorite, followed by red wine and beer. Chinese wine is more like fuel than liquor, having an alcohol concentration as high as 60%. No matter how good a drinker you may think of yourself, never, ever challenge a Chinese into a drinking contest. Better start to say no, thanks before you still havent lost your mind. But there comes another topic: drink or not to drink. It is often seen as rude not to drink with the Chinese in a formal dinner. To maintain your sanity, either claim to be a non alcoholic or plead medical grounds as an excuse. This will let you off the hook with little or minimal drinks. Better yet, bring a partner who is a good drinker with your to the dinner. Similarly, if you are the host for the night, you are expected to pick up all bills for the night. In contrast, no need to worry about the whole expense, someone is going to pay it all.

4.3

What to Pay Special Attention to

There are some controversial Issues in China which we strongly recommend to at least learn some by heart so during a meeting with your Chinese business partner you wont say something awkward. There are some bound topics areas in social conversations with the Chinese. Try to avoid these conversational topics as much as possible if you are not sure if your opinion will satisfy your Chinese friends. I have seen many nasty arguments as a result of these topics: 1. You must not mention that Taiwan is an independent state or a country. Remember that, Taiwan was, is, and always will be a part of China. 2. Youd better not praise the Japanese or be seen to be good buddies with them because Chinese have personal vendetta and regional conflicts with Japanese. 3. Never condemn some controversial history characters such as Mao Tse Tung, although a lot of people dont like him because his violent domination, but do remember that, that is Chinese peoples own business, so they dont like outsiders to judge their leaders. 4. You must not praise this area in front of natives from another area and similarly vice versa In conclusion, if you are not quite confident about your acknowledgement of Chinese history and politics, avoid those sensitive topics. Other than that, you are pretty safe to converse with the Chinese now.

5.

SELECTING IDEAL SUPPLIERS

5.1

Summary of suppliers in China

After a serious searching and filtering, we finally target on 50 companies that can be representative for all the conditions and aspects. In this part, we can get known the core of the purpose of the whole report, which is successfully entering the Chinese market and conduct business there. As shown in the company information index (see appendix), there we have gathered 5 companies for each kind of product. There are palm oil, bean oil, rapeseed oil, corn oil, tea oil, olive oil, sesame oil, peanut oil, and walnut oil. By tracking on this index, our client can simply find out which group of suppliers is there ideal trading target. Furthermore, it also provides our client a convenient access to all the other information, which includes: packaging information, production capacity, company location, and varies possible contact information such as telephone number, fax, e-mail address, etc. We have made several phone calls already. Some of them have shown a positive attitude of willing to conduct business with Dutch companies, and some of them have already been making business overseas so they have some experience in this area. The randomly choices of our interview companies, the reason is based on the prediction that we made by ourselves, which kind of product our client wants, or production capacity, etc. It is also possible that we can make phone calls to the companies in China according to our clients wish since it is much easier for us to communicate with them. In addition, we also have got some other native advantages.

5.2

Production capacity analysis

Since we have already known that our client is interested in finding vegetable oil supplier in Asia and meanwhile they are selling oil as well. We did some research of Chinese vegetable oil market and industry. Except some classical royal brands we know that most of the manufacturers are producing large amount of oil without luxury package and a famous brand. Although Sandostine is interested in the final product which is vegetable oil, we still have to prepare both kinds products: vegetable oil with famous Chinese brand and luxury packaging and

normal vegetable oil produced from huge plant and stored in big container. We also would like to know further, for instance, if they just import vegetable oil without brand, will they package it and put their own brand on it? Or they just export it or sell it to supermarket or restaurant without making any changes? After a discussion, we would like to suggest our client to contact raw vegetable oil, big capacity production manufacturers. This will both minimize the logistic cost and other cost related with brand, trademark, etc. In addition, by a further processing on such products, we can discover a much more profitability area. We recommend them to import huge amount of good quality oil but without any brand.

5.3

Developing trend of the vegetable oil in China

As we know, vegetable oil is an indispensable consumable for people. The vegetable oil industry is growing steadily these years. China, as one of the top three vegetable oil consuming countries, has also the biggest vegetable oil production in the world. It is also the hottest place for foreign companies to invest. By the technology support and investment China has got the leading producing technology already. Several famous vegetable oil brands have been built during the past years. Gold Arowana, Hu Ji Hua, Fu Ling Men and Lu Hua, etc. Nowadays, the consumers in China are more likely to care about the nutrition and healthy factors rather than the taste or kind of the oil. Recently, several large enterprises have started producing tea tree oil, walnut oil and olive oil which contain higher proportion the nutrition, etc. However, the main market of Chinese vegetable oil industry is still dominated by rapeseed oil, soybean oil, sunflower oil and peanut oil. These products also have a long history and experience in the past. So we recommend our client to keep focusing on the manufacturers whose main products are these.

6.

CONCLUSION

By the chance of learning this subject, we simulate as two real businessmen that we are going to negotiate with Chinese companies. Although it is just a trial, we also take it into consideration. Since our client Sandostine has no experience doing business with Chinese people or in China, we provide both Chinese peoples business behavior and some common senses about the business area in China. We hope that in the long term Sandostine can have a stable and healthy business relationship with some Chinese companies. When selecting the right companies, we know that a lot of Chinese companies also want to conduct business with western people. We are really glad to forward this information to our client. We really hope that by our research and guidance, Sandostine could successfully find an ideal business partner out there in China. We are highly looking forward to see its future progress.

7.

RE

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9.70% 8.30%
39%

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Leading production in China

soybean oil palm oil rapeseed oil peanut oil

the rest

Market division

21% 22%

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it ti

i t C i t

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Focus on Chinas expertise in vegetable oil industry

In order to enter t e C inese veget le oil market we shall let the Chinese suppliers know more about Sandostine. According to our interviews with the Chinese vegetable oil companies, we notice that none of them have ever heard of Sandostine. If Sandostine is ready to enter the new market. It should at least post its company profile on some famous trading website, just like alibaba.com, but Chinese trading websites. So in a certain period, Sandostines reputation and company identity will be known by many more companies.

Company reputation and brand identity of Sandostine

8.

IMPLEMENTATION PLAN

We draft up an initial implementation plan for Sandostine. There are some important aspects which have already been well-defined that need to be considered as following. We assume that the large-scaled manufacturers have the experience and contacts of transportation and logistics. The price is also reasonable since they have been conducting business with a lot of companies in a lot of places in China and overseas. As we know from the online interview, they usually use their own logistic line for their business. These transportation companies are well-known and with good reputation as well. Their main business objective is vegetable oil transportation. Another factor is setting annual sales or quarterly sales target. By the product information that offered by the suppliers, we should make a budget and a sales prediction, this prediction should also based on the clients information. For example, do they like the vegetable oil produced in China, or do they have the purchasing capacity of such amount? Finally, the last step of finishing the implementation plan is to execute it, while executing many constrains and obstacles are likely to come. Sometimes legal obligations and change of local or international business laws, shortage of manpower, ineffective marketing decision, and shortage of budgets... might seem to be the biggest hurdles to cross. Problems are the eventuality of any business venture, no matter how carefully you design your business implementation plan.3 The main thing of business implementation phase is to focus on your business goals and having a strong mind-set and ability to adapt in changing economic situation, certainly at the end you will find a way out to success.

www.hubpages.com Business Implementation Plan Sample

9.

APPENDIX

9.1 Article of Guanxi

Chinese Business Culture 4

Guanxi, An Important Chinese Business Element

Guanxi literally means "relationships", stands for any type of relationship. In the Chinese business world, however, it is also understood as the network of relationships among various parties that cooperate together and support one another. The Chinese businessmen mentality is very much one of "You scratch my back, Ill scratch yours." In essence, this boils down to exchanging favors, which are expected to be done regularly and voluntarily. Therefore, it is an important concept to understand if one is to function effectively in Chinese society. The importance of "Guanxi" Regardless of business experiences in ones home country, in China it is the right "Guanxi" that makes all the difference in ensuring that business will be successful. By getting the right "Guanxi", the organization minimizes the risks, frustrations, and disappointments when doing business in China. Often it is acquiring the right "Guanxi" with the relevant authorities that will determine the competitive standing of an organization in the long run in China. And moreover, the inevitable risks, barriers, and set-ups youll encounter in China will be minimized when you have the right Guanxi network working for you. That is why the correct "Guanxi" is so vital to any successful business strategy in China. Although developing and nurturing the "Guanxi" in China is very demanding on time and resources, the time and money necessary to establish a strong network is well worth the investment. What your business could get in return from the favors for your partners are often more much more valuable, especially in the long run, and when youre in need. Even domestic businesses in China establish wide networks with their suppliers, retailers, banks, and local government officials. It is very common for individuals of an organization to visit the residence of their acquaintances from other organizations, bringing gifts (such as wine, cigarettes, etc.). While this practice may seem intrusive, as you spend more time learning the Chinese culture, it will become easier to understand and take part in this practice that is so central to successful Chinese commercial activity. To start, pay close attention to your immediate Chinese network, and try to establish good "Guanxi" with them. They can indirectly link you to new acquaintances and
4

http://chinese-school.netfirms.com/guanxi.html

information resources, thus helping you to develop other right "Guanxi" you need. How business is conducted The Chinese culture is distinguished from the Western culture in many ways, including how business is conducted. For example, the Chinese prefer to deal with people they know and trust. On the surface, this does not seem to be much different from doing business in the Western world. But in reality, the heavy reliance on relationship means that western companies have to m ake themselves known to the Chinese before any business can take place. Furthermore, this relationship is not simply between companies but also between individuals at a personal level. The relationship is not just before sales take place but it is an ongoing process. The company has to maintain the relationship if it wants to do more business with the Chinese. How relationship is established First of all, it does not have to be based on money. Treating someone with decency while others treat him/her unfairly could result in a good relationship. Second, it starts with and builds on the trustworthiness of the individual or the company. If a company promised certain things and delivered as promised, the company is showing trustworthiness and the Chinese would be more inclined to deal with them again. Third, being dependable and reliable definitely strengthens the relationship. It is like being friends, and friends can count on each other in good and tough times. A good example is related to the 1989 political instability in China. Companies that stayed found their relationship with the Chinese strengthened as they were viewed by the Chinese as friends who did not abandon the Chinese when they needed friends. Fourth, frequent contacts with each other foster understanding and emotional bonds and the Chinese often feel obligated to do business with their friends first. "Guanxi" or relationship with high rank officials are still important for doing business in China, though declining to some extent. Political and administrative interference in business have declined. More and more companies have found themselves on their own surviving without government subsidiaries. If they are not getting any help from the government they are more reluctant to be influenced by government officials. So government "Guanxi" may have less influence with these companies. Since "Guanxi" and relationship could function as an information network, companies with wide "Guanxi" and relationship networks often have much higher performance than companies with little or no relationship with the Chinese. Final Words on "Guanxi" Keep in mind that "Guanxi" can take on many forms. It does not have to be based on money. It is completely legal in their culture and not regarded as bribery in any way. So, there is no need to feel uncomfortable about it. Trustworthiness of both the company and individual is an important component. Following through on promises is a good indication of this. Treating someone with courtesy while others treat him or her unfairly is another aspect. Frequent contact fosters friendship as well. Chinese feel obligated to do business with their friends first. There are risks with this system, as well. When something goes wrong, the relationships are challenged, and friendships quickly disappear. "Guanxi" can also be very one-sided. When "Guanxi" is involved,

there is a risk of obtaining an invoice of twice the amount that you bargained for.5

9.2 Company Profiles Category- Palm oil 1Producer: china grain group Packaging information: medium packaging Total production: unknown but huge, the world 500 enterprises Export or not: yes Address information: Beijing Chaoyangmen south street number 8 china grain group building. Contact information: E-mail -xyz4565@126.com Fax- 057487283908 2Producer: Shanghai liang you hai shi you zhi group Packaging information: small packaging Total production: 180,000 tons per year Export or not: yes Address information: Shanghai city Wulong road number 2080 Contact information: fax021-54821673

Phone_13761352640 e-mail-zlyyaoyao@163.com 3Producer: Yihai(Yantai) grain industry group Packaging information: both Total production: unknown Export or not: unknown Address information: Shang dong province Contact information:e-mail-13905359320@139.com Fax- 0535-6745084 Telephone_13905359320 4Producer: Jinguang food LTD Packaging information: unknown (foreign owned company) Total production: unknown Export or not: yes Address information: Ningbo province Contact information: e-mail-coco_wwl@126.com Fax-0574-86875932 Phone-13306502660
5

Article from: Vincent Lo, the King of Guanxi - How An Outsider Succeeded in China

5Producer: Xinshili food technology LTD Packaging information: unknown Total production: 200,000 tons per year Export or not: unknown Address information: Nanjing province Contact information: Fax-025-85759210 E-mail-zhenyu_xiao@rgei.com Phone- 025-85759210 Category- Bean oil 1Producer: Sanhe Huifu grain group Packaging information: both Total production: more than 3,000,000 tons per year Export or not: unknown Address information: Beijing city Contact information: Fax-01051879393 E-mail- wqwq365@163.com Telephone-13911893305/01061595818 2Producer: Shandong Bohai vegetable oil LTD Packaging information: small packaging Total production: 5,000,000 tons per year Export or not: yes Address information: sanding province Contact information: E-mail- bh_wsj8858@163.com Fax -0543-2308027 2168680 Telephone- 0543-2126788 2303277 3Producer: Tianxiang group Packaging information: unknown Total production: 150,000 tons per year Export or not: yes Address information: Qingdao city Contact information: E-mail- txxqx@163.com Phone-13589759271 Fax-0535-6811272 4Producer: Shandong Jinfeng group Packaging information: unknown

Total production: unknown Export or not: yes Address information: Shandong Contact information: E-mail-angle_xuwenli@hotmail.com Phone- 13953915069

5Producer: Xianghai grain group Packaging information: medium and small packaging Total production: 3,000,000 tons per year Export or not: unknown Address information: Qinhuangdao city Contact information: Phone-15232383301 Fax-0335-3866822 e-mail-zgxhly@163.com Category- rapeseed oil 1Producer: Hunan Jinhao group Packaging information: small Total production: unknown Export or not: unknown Address information: Hunan province Contact information: E-mail- 307341580@qq.com fax0731-84895651

Phone- 13786189210

2Producer: Jiasheng grain group Packaging information: small packaging Total production: 300,000 tons per year Export or not: unknown Address information: Jiangxi province Jiujiang city Contact information: E-mail- wangchuanneng@126.com Fax- 07928329725 Phone- 13970216378 3Producer: Anhui Daping group Packaging information: unknown Total production: more than 300,000 tons per year

Export or not: unknown Address information: Anhui province Contact information: E-mail- sjx13615531487@163.com Fax- 0565-2391233 telephone0565-2367806

4Producer: Hubei Yuanda grain group Packaging information: unknown Total production: more than 300,000 tons per year Export or not: unknown Address information: Hubei province Xiangfan city Contact information: E-mail- 531300383@QQ.163 Fax- 07102121888 Phone- 13797997630 5Producer: Hefei Fuyongquan grain group Packaging information: unknown Total production: 120,000 tons per year Export or not: yes Address information: Hefei city Contact information: E-mail- zhucaizhi@sina.com Fax- 0551-7756888 Phone- 0551-18955108485 Category-corn oil 1Producer: Shandong Guoxin group Packaging information: unknown Total production: unknown Export or not: yes Address information: Shandong province Contact information: e-mail33895061@qq.com

Fax- 05386538008 Phone- 18653725001 2Producer: Beijing Guoliang grain group Packaging information: small Total production: 30,000 tons per year Export or not: unknown

Address information: Beijing city Contact information: E-mail- bjglsyy@126.com Fax- 01080214432 Phone- 01080214599 3Producer: wangxiang corn oil LTD Packaging information: unknown Total production: unknown Export or not: yes Address information: Liaoning Shenyang city Contact information: E-mail- jingjing9919@163.com Fax- 04163589784 Phone- 13464640199 4Producer: Shanxi Xiwang food group Packaging information: both Total production: more than 300,000 tons per year (corn oil) Export or not: yes Address information: Shandong province Contact information: E-mail- chishui0929@163.com Fax- 05434619378 Phone- 13605431637

5Producer: Guangdong Tianlong food group Packaging information: small Total production: unknown Export or not: yes Address information: Guangdong province Contact information: E-mail- leekooo@163.com Fax- 020-82674333 Phone- 020-82672899 Category- tea oil 1Producer: Anhui Lvjian biotechnology LTD Packaging information: unknown Total production: 15,000 tons per year Export or not: unknown Address information: Anhui province

Contact information: E-mail- yuyan19821208@163.com Fax- 0563-4186168 Phone- 18956386709 2Producer: Xianghao tea oil biotechnology group Packaging information: unknown Total production: 2,000 tons per year Export or not: yes Address information: Hunan province Contact information: E-mail- laishanghui@163.com Fax- 0746521122 Phone- 15807473338 3Producer: Yunnan Guangtai biotechnology group Packaging information: normal Total production: unknown Export or not: yes Address information: Yunnan province Contact information: E-mail- oilhzy@sina.com Fax- 0878-3388533 Phone- 15125857385 13629489058

4Producer: Jianhe Jiajin Company Packaging information: normal packaging Total production: unknown Export or not: yes Address information: Hunan province Contact information: E-mail- jiajin189@163.com Fax- 0735-6635466 Phone- 13786541288 5Producer: Anhui Datuanjie edible oil company Packaging information: small and big packaging Total production: 900 tons per working day Export or not: interested Address information: Anhui province Contact information: E-mail- xuhui770715@163.com Fax- 0564-6497345

Phone- 0564

6483999

Category- sunflower oil 1Producer: Meigeer Olive oil Company (the subsidiary company of HEAL THE NET which is top 500) Packaging information: unknown Total production: unknown Export or not: yes Address information: Suzhou city Contact information: E-mail- solan.1986@163.com Fax- 0512-67028228 Phone- 13584876941 2Producer: Beijing Fudetaihe Trade Company Packaging information: unknown Total production: unknown Export or not: yes Address information: Beijing city Contact information: E-mail- junyoubai@163.com Fax- 010-83131900 Phone- 010-59797678 3Producer: Qingdao green Oliver Trade Company Packaging information: unknown Total production: unknown Export or not: yes Address information: Shandong province Qingdao city Contact information: E-mail- xujiahui0611@126.com Fax- 0532-83502987 Phone- 0532-85781231 4Producer: Shanghai Mengteweier Trade Company Packaging information: unknown Total production: unknown Export or not: yes Address information: Shanghai city Contact information: E-mail- liming860120@163.com Fax- 021-62883198 Phone- 021-62889253

5Producer: Ningbo Ningxing international trade company Packaging information: unknown Total production: unknown Export or not: yes Address information: Ningbo city Contact information: E-mail- xiaoyang_tong@hotmail.com Fax- 0574-87275930 Phone- 13805896753 Category-sesame oil 1Producer: Tianjin oriental Leige Trade Company Packaging information: unknown Total production: unknown Export or not: yes Address information: Tianjin city Contact information: E-mail- ma.yongshun@hotmail.com Fax- 022-22513336 Phone- 022-22523500 2Producer: shanghai Kailink food LTD(wholly foreign owned enterprise) Packaging information: unknown Total production: unknown Export or not: unknown Address information: shanghai Contact information: E-mail-shaohong@kailinkfoods.com Fax-0086-21-58188381 Phone-0086-21-58185731

3Producer: JORLEMOT S.L Packaging information: negotiable Total production: unknown Export or not: yes Address information: branch in Spain Contact information: E-mail-cristinaliuwang@sina.com.cn Fax-034958742243 Phone-0034665787014 4Producer: Hongda grain group Packaging information: both Total production: unknown

Export or not: yes Address information: Shandong province Contact information: E-mail-taojinhui2004@yahoo.com.cn Fax-010-61226237 Phone-13120081698 5Producer: Frazzle Olive Oil Trade Company Packaging information: Total production: 800 tons per day Export or not: yes Address information: Chengdu city Contact information: E-mail-945932781@qq.com Fax-028-84323997 Phone-028-81851960 Category- olive oil 1Producer: Abeite Packaging information: both Total production: unknown Export or not: yes Address information: shanghai city Contact information: E-mail- aceitesalbert@gmail.com Fax- 012-60831158 Phone- 021-60831155-120 2Producer: olive manor technology Trade Company Packaging information: unknown Total production: unknown Export or not: yes Address information: Tianjin city Contact information: E-mail- ganlanzhuangyuan@yeah.net Fax- 02223788788 Phone- 02223788791 3Producer: Jiangsu golden sun trade LTD Packaging information: both Total production: unknown Export or not: yes Address information: Jiangsu province Contact information: E-mail- yuanjie8368@sina.com Fax- 0513-85203535

Phone- 13338823635 4Producer: Changyi Yizhu international trade company Packaging information: unknown Total production: unknown Export or not: yes Address information: Shenzhen city Contact information: E-mail- yangming88kitt@163.com Fax- 0755-29631881 Phone- 15920058669 5Producer: Xiamen Zhongsheng group Packaging information: unknown Total production: unknown Export or not: interested Address information: Xiamen city Contact information: E-mail- yfh@xmzhsh.com Fax- 0592-7018333 Phone- 13825865959 Category-peanut oil 1Producer: Fujian Jiaji food group Packaging information: both Total production: more than 100,000 tons per year Export or not: yes Address information: Fujian province Fuzhou city Contact information: E-mail- jiajif@gmail.com Fax- 0591 88081505 Phone- 0591 88306712 2Producer: Suzhou Hualun edible oil company Packaging information: unknown Total production: unknown Export or not: yes Address information: Suzhou city Contact information: E-mail- adela79111@yahoo.cn Fax- 051252122266 Phone- 051252122799 3Producer: Shandong Guoxin bionomical protein LTD Packaging information: small packaging

Total production: unknown Export or not: yes Address information-Shandong province Contact information: E-mail- hong_wei_zhao@163.com Fax- 0531-69985558 Phone- 15269121635 4Producer: Shandong golden ridge group Packaging information: unknown Total production: unknown Export or not: yes Address information: Shandong province Contact information: E-mail- jessicaxu_2009@126.com Fax- 0539-7238799 Phone- 13953915069 5Producer: Hongbao peanut oil Company Packaging information: unknown Total production: 200,000 tons per year Export or not: interested Address information: Jilin province Contact information: E-mail- hbl@hongzui.com Fax- 0434-3601222 Phone- 0434-3600977 Category-walnut oil 1Producer: Hebei golden dragon edible oil company Packaging information: unknown Total production: 1,000 tons of walnut oil per year Export or not: interested Address information: Hebei province Contact information: E-mail- huangjinlonggongsi@163.com Fax- 0310-3893103 Phone- 0310-3893103 2Producer: Yunnan Guangtai Biotechnology Company Packaging information: unknown Total production: unknown Export or not: yes Address information: Yunnan province Contact information: E-mail- oilhzy@sina.com

Fax- 0878-3388533 Phone- 15125857385 13629489058

3Producer: ANHUI green food and Beverage Company Packaging information: both Total production: unknown Export or not: yes Address information Contact information: E-mail- 245708747@qq.com Fax- 0551-3490620 Phone- 0551-3532786 4Producer: Ningbo Zhengda oil group Packaging information: small packaging Total production: unknown Export or not: interested Address information: Ningbo city Contact information: E-mail- zzjyfx@126.com Fax- 057486867292 Phone- 18606611756 5Producer: Shandong Luhua branch group Packaging information: both Total production: unknown Export or not: unknown Address information: Shenyang city Contact information: E-mail- E-mail yihe194@163.com Phone- 13909882202

9.3 Largest Oil Producers in China

1 China Grains & Oils Group Corp.

Company profile: China Grains and Oils Group Corporation (CGOG) is a large state-owned grain and oil marketing enterprise under the direct administration of the State-Owned Assets Supervision and Administration Commission of the State Council. The major business of the Company is in grain and oil. Its business activities include domestic and foreign trade, grain and oil food and feedstuff processing, storage and transportation, equipment and engineering, and futures and capital market operations. CGOG undertakes also real estate business and other business as well. The Company has 21 full, holding and overseas subsidiaries; 5 key domestic business areas, namely areas around the Pear River, the Yangtze River, the Yellow River, Northeast and Inner Mongolia, and Beijing, Tianjin and Tanggu Zone; 4 business lines, i.e. purchasing and sales network, storage and transportation, grain and oil processing, and technical development; a nationwide marketing network; the construction of 4 industry chains specialized in grain, oil and fat, feedstuff and technical engineering respectively; 5 national first-class scientific research and design institutes specialized in grain and oil related projects. CGOG has built close relations with domestic grain departments and business organizations at various levels; CGOG keeps frequent contacts with tens of specialized institutions and nation-level societies and organizations internationally. The development target of CGOG is to: give a full play of its strengths; realize an integration of grain and oil scientific research, trade, industry and agriculture business; and grow into a large international, specialized and industrialized group with international competitiveness. Website: www.cgog.cn/ehome.asp

2 COFCO

Company profile: COFCO East China Sea is the world's top 500 companies - COFCO Limited to jointly invest in the construction of Singapore KENSPOT foreign joint ventures, is the "Chinese famous brand "Fortune" series one of the main production base of edible oil, is the world's largest integrated food processing base of grain and oil, rice oil Expo 2010 only designated production enterprise. Founded in May 1993, full production in August 1997, a total investment of 228 million, covers an area of 1267 acres, mainly in soybeans, wheat, rice, oil processing and deep processing projects, with oil extraction, refining, feed, small package , flour, rice, special oil, soy lecithin, and other specialized production factory, production of "Fortune" brand cooking oil, flour and rice, "universal" brand soybean meal, "universal", "Five Lakes" brand feed grain and oil products , selling products, and exported to Korea, Japan, Vietnam, Malaysia and other countries. Since 2001, the company passed the ISO9001, ISO14001, ISO22000, HACCP, United States, AIB, OHSMS18001 other management system certification; the main product had won "China Top Brand", "Jiangsu Famous Brand" and other titles. In 2009, the company achieved sales of 17.491 billion Yuan, 2.493 billion Yuan turned over to the tax. Production since 1995 to December 2009, COFCO East China Sea has been turned over to the state total of 12.767 billion Yuan in tax revenues. COFCO East China Sea Oil has been for many years among the "Top 500 Chinese enterprises with foreign investment", "China Top 500 Enterprises", "China Top 500 Enterprises", "top ten food industry enterprises in China," the ranks; in 2007, won the " national food industry, food safety credit system excellent pilot enterprises "; 2008, won the" 2007-2008 National Food Industry outstanding leading enterprises ". Website: www.eogi.com.cn/index.php

3 Wuhan Fuda Edible Oil Condiment Corp., Ltd

Edible spices, Wuhan Fuda Co., Ltd. is a production of sesame oil, also engage in other edible vegetable oils and edible oil processing enterprises spices. The company located in Hubei province which is rich in resources of raw materials sesame."Fuda Square, the" old tradition process, adhere to independent research and innovation, combined with the country, both inside and outside the advanced production technology, developed a "Fuda Square" brand sesame oil, edible oil, corn oil, peanut oil, walnut oil, olive oil, sunflower oil, more than 20 series 200 products, and its high quality products, strong brand affinity and the rich connotation of the brand. We formed a marketing network covering the whole country. Companies adhering to the centuries-old tradition process, adhere to independent research and innovation, under the guidance of experts, product quality and quality continue to improve. "Fuda Square" broadcasted a few sesame oil product commercials on the China Central Television which greatly improved the "Fuda Square" brand awareness, reputation and market influence. In order to strengthen and expand the city's oil companies, we implemented edible oil brand management system, management of large-scale production to meet market demand. We continue to expand company size, increase the visibility of local edible oil brand. our industrial park project began construction in March 2009, will spend two years to complete the construction of industrial park, when the project is completed, we will have annual output of 40,000 tons of sesame oil and 200 million tons mechanical press pressed high-grade non-GM edible oil production capacity. We promote local employment, promote the development of oil industry in Wuhan, the process of industrialization of agriculture, and promote regional economic development. Companies adhere to market-oriented, customer-centric, to advance the concept and actions, adhere to the talent, and take the road of scientific and technological development; insist on manufacturing quality products to customer needs, provide good service for the customer satisfaction, strengthening quality management for enterprises to survive quality goals, establish a strong quality assurance system We . passed the ISO9001 quality management system, ISO14001 environmental management system, HACCP food safety management system, occupational health

and safety management system certification. Fuda company has been sticking to our "customer-centered, continuous improvement" management principles, "the same price of our better quality, same quality at lower our prices," marketing idea, Looking ahead, we will continue to manage and technological innovation. Step by step, and gradually the company has nearly 200 different products. We promise to provide quality, comprehensive nutrition with the name of ethnic characteristics of edible oils and spices, as "Fuda Square" is the most professional group of sesame producer, and furthermore "Fuda Square" sesame oil is consumers favorite brand. Website: www.fdf8.com/index.html

4 Shandong Luhua Group Corp., Ltd

Company profile: Shandong Lu Hua Group Co., Ltd. is a large private enterprise, the Chinese national brands, agricultural industrialization leading enterprises in key state, annual production capacity of 90 million tons of peanut oil, sunflower seed oil production capacity of 10 tons. Now has more than 8,000 employees under its jurisdiction based on various regions. The company's main products are pressed a Luhua brand peanut oil, nuts, cooking oil, peel pressed sunflower seed oil, sesame oil, soy sauce, rice wine vinegar, mineral water, FD food and other products. Luhua 2002 by the "National assured oil," the honorary title; 2003 become the "Great Hall of the state banquet in oil"; 2004, by the National Center for Public Nutrition and Development, awarded the "nutrition and health advocacy products"; the same year, "Lu took" trademark by the state as "Chinese Famous Brand"; 2005, Lu spent peanut oil by the state as "Chinese famous brand" products. Our company Sells products in more than 30 provinces, municipalities and autonomous regions. In 2010, we have 8.56 billion Yuan sales income. During the development process, we always adhere to the scientific and technological innovation and the implementation of brand strategy which are very important part of our overall development strategy. Technology innovation strategy. After 6 years of technological breakthroughs, we formed 5S technique which successfully created a pressing process of pure physics. We have organized a group of experts and built partnership with those excellent science institutes as our scientific support. Brand strategy. Lu Hua Group sets China's first brand of high-quality edible oil as a goal. Lu spent massive resources to increase brand awareness, through the CCTV and other high-end media to establish a brand image of the flower Lu, formed a brand driven market. Now, the brand has been known to the public and became the first

brand of peanut oil, medium and high-end consumers first choice. Lu Hua Group's development and growth has been widespread concern at all levels of leadership. Plentiful party and state leaders have visited Lu Hua, cause we driving farmers income, to solve China's oil shortage so we are given a high degree of recognition. Next period we plan to implement the development strategy of diversification of oil to ensure the annual production capacity of 100 million tons of peanut oil, other edible oil production capacity of 100 million tons, sales income of 200 billion, and the construction of our 1000 acres peanut planting base. Website www.luhua.cn/QiYe/QiYeJianJie.asp