China’s SkyPeople Fruit Juice Inc. announced the launch of Hedetang Kiwi Orchard through its indirectly wholly-owned subsidiary, Shaanxi Guoweimei Kiwi Deep Processing Company.
SkyPeople produces fruit juice concentrates, including apple, kiwi, and pear concentrates, fruit juice drinks, and other fruit-related products which it sells both on China’s domestic market and to international buyers in overseas markets.
Under the terms of the transaction, SkyPeople signed a 30-year lease for about 3,300 acres of farmland with the Di’erpo Committe of Jinqu Village, Mei County, Shaanxi with the goal of producing only organic kiwi at the site.
“We are pleased to announce this lease agreement for agricultural land in Mei County, a region known worldwide for its production of organic kiwi products,” said Mr. Yongke Xue, chief executive officer of SkyPeople in a company statement.
Through this project, SkyPeople is aiming to lift kiwi production from traditional methodologies to what the company calls ‘intelligence agriculture.’ Every aspect of development and production will benefit from modern technologies including cloud computing and sensor networks, precision planting, visualized management, internet marketing, and social service systems and decision-making programs.
“The Hedetang Kiwi Orchard employs the use of intelligence agricultural technology tools to optimize harvest yields, day-to-day management and product marketing,” says Xue. “This new modern approach is part of our strategic plan to create a high-tech agricultural value chain by coordinating distribution through high-tech means such as the utilization of e-commerce platforms.”
All kiwi produced at the orchards for commercial use will be distributed both offline and online through Hedetang Farm Products Trading Market Company (“HDTM”). However, all kiwi produced for non-commercial purposes, meaning it will be further processed into higher value products, will be processed through SkyPeople’s Shaanxi Guoweimei Kiwi Deep Processing Company in order to ensure the quality of raw materials and to reduce the costs of raw material sourcing.
The role of juices and juice concentrates in the beverage industry is expected to see steady and significant growth in the coming years. Consumer demand for healthier beverage options and the use of fruit concentrates as a more natural substitute for sweeteners in foods will drive the category to see a CAGR of 5.5%, reaching a value of $40 billion by 2020, according to Mordor Intelligence.
Not only is SkyPeople positioning itself to leverage this sector growth, but it is also well positioned geographically.
In 2014, Asia-Pacific was the world’s top market for fruit concentrates, with North America being second and the EU third. Asia-Pacific’s market is projected by Mordor Intelligence to see a steady CAGR of 5.7% from 2015 to 2020.
Indeed, despite China’s recent economic slowdown, (the country saw economic growth of 6.9% in 2015 – the lowest rate of growth in 25 years) the country’s demand for kiwifruit has remained strong.
Simon Limmer, chief executive of New Zealand-based kiwifruit producer, Zespri, told Fresh Plaza that the company increased its kiwi exports to China by 50% in 2015 and was expecting to repeat the increase in 2016 – making China the company’s fastest growing market.
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Lynda Kiernan
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