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A different side of GAR in China

Posted: Sep 19, 2019 3 minute read Lucas Ho

Golden Agri-Resources (GAR) may be widely known for its agribusiness, particularly in palm oil in Indonesia, but our company also has a diverse business portfolio in China. Having visited plantations and mills in Riau to learn about our upstream operations earlier this year as part of my training in the audit department, I was looking forward to seeing how our downstream operations in China worked.

China is a major market we operate in, and we have been present there since 1994. Over this time, local consumer demographics have changed drastically along with China’s rapid development as an economy.

This change is especially significant for our food business.

Shanghai corporate office
The entrance to our Shanghai corporate office.

Catering to consumers’ changing tastes

China Food Chief Executive Officer, Jerry Zhou, and Chief Financial Officer, Henry Jin, explained developments in the consumer food segment of our business. As China develops and consumers become wealthier, their preferences for food and snack products are changing. In order to keep up with these market changes, Sinar Mas Agribusiness and Food China is exploring new products to complement our existing noodle business.

products sold in China
Our range of products sold in China.

Jerry explained that nutrition-focused products are gaining popularity in light of Chinese consumers becoming more health-conscious like their Western counterparts. With this becoming a key trend in China, the team has introduced new products to tap into that segment, including healthy protein bars and meal replacement shakes.

With the huge advancements being made in e-commerce in China, we are also bolstering our presence online, and this has helped improve our reach to younger consumers.

Technologically advanced food production

We departed the hustle and bustle of Shanghai and travelled to Dong’e city, where one of our instant and snack noodles manufacturing plants is located. Not having been to a food production plant before, I was impressed by the high hygiene standards required for visitors and staff. Before entering the production area, we had to wear protective gear and be thoroughly sanitised. From flour storage to compacting, slicing, deep frying, drying, flavouring and finally, packaging – it was a very automated process with staff ensuring quality along various sections of the line. Packaging is one of the most labor-intensive processes in the plant. While I was visiting I got to watch a new piece of equipment that automates this process be implemented. Adopting new technology like this, that increases operational efficiency, is key in the company’s overall strategy from plantation to factory.

production lines
There were several production lines to cater to the different types and flavours of noodles.

The plant’s General Manager also gave us some insight into the impact local and state regulations have on operations. For example, when the national government mandated the cessation of coal-powered generators, the plant’s management had to work closely with the local government to upgrade our power generators.

Being from the audit department, the primary purpose of the trip was to meet and discuss audit findings with the local team and provide our Chinese colleagues with guiding audit principles and approaches. Our visit coincided with the conclusion of the China team’s audit of Dong’e, giving us the opportunity to discuss best practice linked to a real-life example.

Soybean – another side of our business

Our last stop was Ningbo, to meet with the Head of Agri Division, Dennis Lui, and his team. Our Ningbo plant operates a deep-sea port and a soybean crushing plant.

Hosted in Ningbo by colleagues with a wealth of experience.

The operation of the plant was similar to what I had seen on my visit to Libo Mill’s Kernel Crushing Plant in Riau and the Marunda Refinery near Jakarta. Soybeans are primarily imported from the US and South America for crushing. After which, the soybean meal and soybean oil are sold in bulk. A portion of the soybean oil is further refined into cooking oil for the domestic market.

Ningbo Refinery
Soybean oil refined into cooking oil at our Ningbo Refinery.

GAR is a globally known as a palm oil leader, but our business spans plantations to products and we are a more diverse agribusiness player than many people might expect. Our business in China is a testament to that, with its range of snack noodles, soybean products, and up-and-coming nutrition-focused food range. To learn more about our product offerings in China here.

For more on careers in our China business, visit the Sinar Mas Agribusiness and Food LinkedIn page.

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