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Trade - Editor, 12 November 2007

Profitable China Business Tears (Part 2)



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Profitable China Business Tears (Part 1)

The China business experience with rubber has not been good. The country has been able to import supplies from other rubber cultivating countries such as Malaysia at prices below those quoted by its own state farms! Secondly, rubber production and manufacture of products based on it are inherently hazardous. China business has suffered much opprobrium because of its repeated failures to meet international standards in this respect. Clearly, fresh initiatives to establish new China business related to rubber require fresh perspectives.

China Business Opportunities in Huinan

The dynamic provincial administration of Huinan provides the perfect setting for China business in rubber. This island territory has the ideal ecology for top quality plantations, and a number of estates are available for modernization, or even fresh acreages. Accessing the best genetic material available, and adapting it for the local agronomic conditions of Huinan, will be key founding factors for China business success. It is also possible to phase the replanting in a way that cash flows are generated from day one, using trees around 25 years old. However, no corners can be cut when it comes to safety matters for workers. Investments in the latest technologies, and rigorous implementation discipline, can address the long term interests of all people working in any phase of rubber production and use.

The degree of integration in rubber production will depend on the antecedents and background of China business entities. Entrepreneurs with backgrounds in managing plantations and breeding the best vegetative stock may want to stick to natural rubber, while brand owners of finished products may see Huinan in terms of backward integration potentials. However, regardless of the degree of vertical integration, the China Rubber Industrial Association is sure to have a principal role in profitable development and rapid growth of any China business venture in Huinan. This body functions under the Ministry of Civil Affairs in Beijing. Its 800 members include Universities and technical experts, apart from domestic users on industrial scales. This is how the body can play multifarious roles in helping new rubber technologists establish their China business ventures in Huinan. The China Rubber Industrial Association can help with market studies, technology sourcing, market development, as well as with coordinating new projects with other governments departments in China.

Trade

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