Australian SMEs set to ride the Chinese economic dragon
Monday, March 24, 2014/
About six months ago, an entrepreneurial butcher from Boorowa packed his bags and headed over to China. Last week he shipped his first container load of frozen cuts of premium Angus beef to a port in Southern China.
The story of how, in less than a year, Sam Burton Taylor of Kenny’s Creek Natural Beef was able to find a market for his meat is a classic example of the kind of opportunities that exist for smaller Australian companies in the China market.
The 35 year old already demonstrated his flair for business when he purchased Sam’s Paddock, a traditional butchers shop in the farming town of Boorowa in the South West Slopes of New South Wales in 2010 and transformed it into a successful online retailer of speciality meat products that employs three people.
Burton Taylor, whose family operates an Angus stud farm employing 11 full-time staff, told SmartCompany that it was almost by chance that he decided to look into business opportunities in China.
“A friend who was living in China told me I should come over and see what’s going on.”
Last November he travelled to Shanghai to take part in an exhibition that brings together the key players in China’s meat industry. The trained butcher took advantage of the trip to meet with people on the ground and get a general understanding of the opportunities that existed. It was on this trip that Burton Taylor was also able to make initial contact with his distribution partner who had picked up a Kenny’s Creek pamphlet.
Despite what looks like a relatively smooth ride, when the entrepreneur was asked whether he would encourage other businesses to follow suit, he replied: “China is a growth market, there is no two ways about that. Contrary to what most people think, there is no easy money. Your viewpoint has to be ‘how can I help my clients make money?”
Gemtree Vineyards, a family-owned winery in South Australia with 25 employees and annual revenue of $10 million, is another example of a small Australian company that has been successful in China. The company quadrupled output after signing an agreement with a Chinese investment partner in 2012 that has also opened up an extensive distribution network in the Middle Kingdom.
Andrew Buttery, managing director of Gemtree Vineyards, told SmartCompany he first made a conscious decision in around 2007 to try and find out more about China and undertook a few visits to identify opportunities. After that he established relationships with a few different importers.
In 2010, Buttery orchestrated a meeting with Song Yuangang, the chairman of Sichuan Taifeng, via a mutual friend. “The purpose of the meeting was to show him some vineyard assets with a view that he may be interested in buying them and I manage them for him.”
However, almost three years later, after multiple trips by Song and his family to the McLaren Vale winery and the signing of a joint venture agreement, the Chinese businessman has now become a partner and investor in the company.
When quizzed about the difficulties faced, Gemtree’s managing director told SmartCompany finding the right partner was the biggest challenge. Buttery also talked about a hectic travel schedule and noted that the “legal and accounting challenges in executing a partnership were intense.”
When asked if he would encourage other businesses to follow suit, Buttery replied, “My view is that it’s not for everyone. You need to be China-ready and you need patience and persistence. It is not the solution to all problems but the opportunities are there to be grabbed with the right partner. Overall I would encourage people to seriously consider it, but do their homework first and be prepared to have your life turned upside down.”
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