(Yicai) Nov. 6 — Louis Dreyfus Company has the capacity to supply its Chinese customers with both imports and localized products, according to the chief executive officer of the Dutch merchant and processor of agricultural goods.
“We like all models,” Michael Gelchie told Yicai at the China International Import Expo that kicked off in Shanghai yesterday. “We like domestic development where we can see growing domestic demand, and we are also focused on international connectivity.”
LDC is a global company that strives to connect the international supply chain at all times while looking at the specificities within each country and further investing there, based on opportunities, Gelchie explained. “From our standpoint at LDC, the most important thing was to build a resilient, diversified supply chain.
“We operate in over 100 countries worldwide and we have the ability to supply our customers from multiple origins,” Gelchie noted, adding that in markets like China, LDC also invests domestically through processing and other dimensions where there are opportunities to serve customers.
About 20 percent of the food supply depends on international trade, and much of that ends up in China, Gelchie pointed out. “China is also one of the largest agricultural producers in the world and an importer,” he added. “So what I feel is that China plays a pivotal role in supporting global trade.”
Targeting End Consumers
LDC, which has been operating in China for 52 years, is working to reposition itself beyond bulk commodities trading. In 2022, it refined its strategy to not only focus on core merchandising but also move further downstream into consumer-focused products.
“With China moving more people into the middle class over the next 10 years, we are very confident that the consumer market will continue to expand exponentially,” Gelchie said. “I think over 800 million Chinese people will enter the middle class in the next decade.
“LDC is positioning itself not only as an international supplier of commodities in the Chinese market, but also positioning itself in relation to the specificities of the consumer market, both food and feed,” Gelchie noted.
In 2023, LDC established a plant-based ingredients business platform to provide Chinese customers with various plant-based products, as well as a food and feed solutions platform. Consumers’ health consciousness and environmental awareness in China are improving, with growing demand for nutritious and plant-based products.
LCD has participated in all eight editions of the CIIE. At this year’s expo, the company is showcasing its instant coffee product line for the first time, with instant coffee powder from Brazil’s Cacique factory debuting in the Chinese market.
Shanghai as China’s Hub
LDC is expanding investment in China. In 2023, it opened its second global research and development center in Sanlin, Shanghai, based on the city’s talent, education, and research advantages.
“We not only conduct our own R&D but also collaborate with upstream and downstream partners and Shanghai’s scientific research institutions to jointly develop next-generation proteins and technologies,” Chen Jiayuan, LDC’s CEO for North Asia, told Yicai.
The new products under the Soyadoc brand that LDC is displaying for the first time at the CIIE, including fermented soybean meal and yeast-based proteins, were all locally developed at the Shanghai R&D center.
Looking ahead, Zhou revealed more ambitious plans for the Shanghai headquarters. LDC will leverage Shanghai’s institutional advantages and free trade zone policies to upgrade the regional HQ there from a profit and manufacturing center to a financing and risk management center.
In July, LDC began construction on a new food technology industrial park in Qingdao. With an annual production capacity of 1.5 million tons, it is expected to be completed in 2027. Moreover, the company is building a specialty feed production line in Tianjin, which will come on stream by the end of the year.
China’s opening up has allowed LDC to further participate in the domestic market, Gelchie said. The company will continue to invest regionally both in the Guangzhou and Tianjin areas to support the growth of domestic consumption, he added.
Editor: Futura Costaglione