Zespri takes more control as 'importer of record'

Prime Minister John Key and Zespri chief executive Lain Jager at the launch in China. Photo / Supplied

Zespri has been made an "importer of record" in China - giving the kiwifruit marketer more control over its product in what is poised to become its biggest market by volume.

Prime Minister John Key officially launched the new season for Zespri in China at an event in Shanghai last night, marking a new phase for its strategy in the People's Republic.

Chief executive Lain Jager said China will soon account for around one-fifth of Zespri sales, which it expects to rise to 24 million trays this year from 18 million trays last season.

Zespri has been active in China for 10 years but the new phase will mean expanding to five representative offices, increasing staff numbers from 25 to 90 over the next three years and joining with local partners to investigate growing local varieties of kiwifruit in China.

Becoming importer of record would mean aligning its China business model with those used in its long-established Japan and European markets, Jager said.

"Ultimately this change will allow us to optimise our quality delivery in the market and offer an enhanced level of service to our distribution customers," Jager said.

Zespri has in the past relied on a number of Chinese importers to get product into the country.

As an importer of record, Zespri will retain ownership of the fruit on arrival, enabling it to keep inventory in the market, but also conferring on it responsibilities for documentaiton, quarantine and customs clearance.

"It allows us to have greater agility in the market, so we are able to respond to the market in a more timely manner," chief operating officer Simon Limmer said in a phone interview from Shanghai.

Zespri's expansion will be supported by new regional offices opening this year in Guangzhou, Xian and Chongqing. Mount Maunganui-based Zespri is wholly owned by current or past kiwifruit growers.

Zespri has indicated an after-tax profit of $25 million to $30 million for the 2017 financial year, excluding revenue from the release of 400ha of Gold3 licence being tendered next month. That additional revenue will likely be materially significant to the 2016/17 corporate profit, it told the Unlisted trading platform.

- Additional reporting: BusinessDesk