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Last updated at: (Beijing Time) Monday, February 04, 2002

US Giant to Expand Potato Production in China

US-based farming giant J R Simplot plans to expand its potato production in China -- the world's largest agricultural nation -- and help the nation cope with the WTO competition.
Simplot executives said they aim to multiply potato output in China five-fold, as well as start a massive project to plant American sweet corn in the country.


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Plan to Meet Challenges of WTO

Simplot's profit-making plan is also expected to help Chinese farmers meet the challenges brought by the country's WTO entry.

R. Kent Ernest, Simplot's international sales and marketing director, said, "Simplot will strengthen co-operation with local Chinese farmers and help sharpen the competitive edge of China-produced agricultural products."

Simplot purchases potatoes from 5,000 Chinese farmers in northern areas of Beijing. With new orders from the US firm, more Chinese farmers will grow potatoes for Simplot, which is expected to considerably increase their incomes.

Fears Vs Anti-Risk Models

However, looking at the overall picture of China's agricultural industry in the future, there are fears: Chinese farmers' income will decline, due to the relatively low quality of products, high costs and poor marketing.

Ernest stressed: "Simplot's operation model in relations with local farmers may be a good method to follow in the effort to help resolve some agricultural problems arising after China's WTO entry."

The Simplot model is said to enhance the anti-risk and profit-making capability of Chinese farmers by centralizing individual growing.

About Simplot

Simplot is one of the world's largest agribusiness companies, and potatoes make up about half of the company's US$3.5 billion annual revenues.

As a major supplier of French fries for the world's two largest fast food chain stores - McDonald's and KFC - Simplot is the only foreign company to have localized potato growing in China.

All the French fries provided to McDonald's restaurants in northern China are locally produced by 5,000 Chinese farmers in areas north of Beijing and processed by Beijing Simplot Food Processing joint venture, said The-han Chow, chief representative of Simplot China.

These farmers are now working on 2,000 hectares of land, and the annual output reached 30,000 tons last year.

Details Under the Contract

Dan Cushing, general manager of the Beijing Simplot joint venture, said: "The efforts of Simplot in China has helped local Chinese growers improve their infrastructure, farming techniques and obtain continuously growing incomes."

Under the contract between growers and Simplot, growers should use designated potato seeds, chemical fertilizers, standardized irrigation facilities and adequate farming techniques to produce potatoes up to the company's requirement.



More About J.R. Simplot Company
The J.R. Simplot Company, a privately held agribusiness corporation headquartered in Boise, Idaho, is among the nation's largest and fastest-growing privately held businesses. Simplot offers a wide variety of products and services to customers around the world. Annual revenues are approximately $2.8 billion, derived principally from food processing, fertilizer manufacturing, agriculture, and related businesses.

Simplot employs about 12,000 people in the United States, Canada, Australia, and Mexico. It has operations in virtually every state and a growing number of foreign countries. Customer satisfaction is the primary goal of every Simplot product and service, and the Company is recognized as a leader in new products and production efficiency. A commitment to research and development enables Simplot to provide innovative, competitively priced products.

Simplot is organized into five major groups:

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Source: China Daily

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