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An interview with Capespans China specialist Rod Hill
Capespan: a major fruitexporter in China

As a part of FreshPlaza’s ‘China Special’ today an exclusive interview with Rod Hill, Capespan's China procurement manager, about their serious activities in China. With their South African origin this company is spreading their sources to different parts of the world in order to become a powerful and year-round supplier. 

FP: Since when did Cape started connections with China?
R.H.: Over the past 15 years Capespan has become on of the leading global players in the fresh produce arena.

FP: Why .. what is the reason for Cape to deal with China production?  
R.H.:Supplying key retail customers meant taking a global approach to procurement to give a 12 month supply service.  This resulted in less reliance on South Africa as an origin, but the development of new supply origins.

FP: Cape is South African . ..  what is the deal?
R.H.:Capespan today, apart from being the leading exporter from South Africa, is also the biggest exporter from Chile and India to Europe. We are also major players in export from Egypt, Peru and Mexico. We have been exporting from China for 10 years and are the biggest exporter of Apples and Asian Pears to Europe. Our business is focussed on European retail programmes supplying customers with Chinese Fuji apples and Asian Pears.

FP: What kind of products are involved in your business with China ?
R.H.:The majority of the fruit exported is Fuji apples and Asian Pears. We have also exported Litchi, Kiwi-fruit and Mandarins. All of the fruit is exported by sea from China the main ports of Qingdao,Tianjin and Shenzhen.

FP: What brand are you packing there?
Most of the fruit is in Capespan branded cartons and supplied to key retailers in the Uk and Continental Europe.
FP: What is the added value of china products for Capespan ??
R.H.:The original interest in Chinese products was that the fruit was unique and good value. Each fruit is grown in a separate bag, reducing the need for chemical sprays.
The fruit has a limited time exposed to the sun giving a unique colouration.
Recently the combination of inflation in China and the weak exchange rate has made the fruit more expensive.

FP: Is there no fear for competition?
R.H.:Competing directly with European apples these factors alongside our economic recession has made the offer less attractive. Unlike industry, fruit production remains firmly in the hands of rural producers and Capespan's success has been to choose partners that can produce consistent quality and meet the needs of European retailers.  
Capespan has a long track record in China and we see clearly that currently producers are switching their focus to the developing local market.

FP: Will capespan -like a growing amount of companies- be taken over by Chinese investors ??
R.H.:We are currently investing in brand development to take advantage of this opportunity.
It is difficult to predict what will happen in China but we see clearly that Capespan's interest in China will increase.

FP: Is the Financial crisis influencing this kind of initiatives ??
The current economic crisis being experienced on a global basis has had an impact on all aspects of trade. 
R.H.: In the produce sector retailers are focussing on value and cheaper offers at the expense of high value offers. Chinese products are generally at the high end of the market and as a result have reduced in interest. There are several key European retailers that have important programmes in Chinese Pome fruit and while sales have decreased the impact has been less than in the wholesale sector.
At the same time, China's economy goes from strength to strength announcing a GDP growth of 8% despite much lower exports. Interestingly it looks like China might lead the world out of recession. 

Publication date: 8/5/2009
Author: Wim Geurts


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