Building the great Wall's of China
Saturday 20 May 1995
Earlier this week a group of British businessmen on a trade mission was shown around Wall's joint-venture factory outside Peking. This is one of the success stories of British investment in China (well, near enough: Wall's is owned by the British-Dutch group, Unilever). Since the factory started production last June, 40 million ice- creams have come off the production line and on to the streets of Peking.
Sino-Cornetto relations are doing very nicely indeed. With summer approaching, the factory is producing about 1 million ice-creams a day to be sold by 5,000 distributors across the city, mostly from freezer cabinets, kiosks and semi-mobile tricycle units. "Our aim was to cater for the local market here in China," said Robert Smith, general manager of Wall's in China. "Some products have been tailored to local tastes. The Chinese like sweet things in general but they don't like intense sweet tastes. And therefore we have dropped the sugar level in quite a number of products."
Even for an established company like Wall's, however, China can be hard work. The company started looking at the market in early 1992, and at the end of that year opted for a joint- venture ice-cream operation with Sumstar, a division of China's National Council of Light Industry. "And then of course the next six months was getting all the various permits, and getting all the details sorted out," said Mr Smith. How many permits? "Dozens, dozens ... " Work at the factory site began in June 1993.
Wall's owns 95 per cent of the joint venture, for a total investment of pounds 35m.
Is it profitable? "It certainly will be by year three, which is totally in line with our plans," Mr Smith said.
Such has been the success that a similar factory is now under construction in Shanghai.
But China is not easy. "People coming in have got to be realistic," he said. "They have got to take time trying to understand the market, to understand how business operates here, and be patient. But providing people are prepared to do those things, I'm convinced that, yes, there are tremendous opportunities here."
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