Sugar group building new trading center

Guangdong Jinling Sugar Industry Group, one of the leading sugar makers in the country, has launched construction of a three-phase trading center for agricultural products to facilitate trade between China and Southeast Asian countries.

The Beibu Gulf Agriculture Products Trading Center, located in Suixi county in Zhanjiang, in western Guangdong province, will go into operation by 2017, according to Lin Shuixi, founder and chairman of the Guangdong Jinling Sugar Industry Group.

"The trading center will help boost the efficiency of transporting agricultural products to the domestic and overseas markets, especially in Southeast Asian countries," Lin said.

In the past, Zhanjiang, a city with abundant agricultural resources, faced difficulties in transporting its agricultural products to other parts of the country, not to mention the overseas market, Lin said.

Under a strategy launched by the Zhanjiang city government to speed up transport network development for agricultural products, construction of the first phase of the trading center began in 2013.

Lin said operation of the first phase of the project began after construction was completed in early February.

The three phases will cost up to 1.6 billion yuan ($255.5 million), Lin said.

The annual throughput of the trading platform is expected to reach 3 million metric tons of agricultural products, generating more than 40 million yuan in tax revenue and creating more than 2,000 jobs, sources within the company said.

"The modernization of the traditional agriculture industry will play a part to drive the city's development in the years ahead," Lin said.

Lin, who is a deputy of the National People's Congress, was speaking to China Daily during the ongoing NPC session in Beijing.

"Zhanjiang, which enjoys a tropical climate, has the potential to develop agriculture into a major industry for the city's economic development in the near future," he said.

According to Lin, the trading center would also provide local farmers with a trustworthy wholesale market, facilitating the exchange of agricultural products between the country's southern and northern areas.

"It will develop into a transport center for agricultural products made from the Beibu Gulf area, which includes the western part of Guangdong and the eastern part of the Guangxi Zhuang autonomous region."

Lin said the trading center would help sustain business growth for the Jinling Group, which faces the challenges of rising sugar production costs and a lower domestic sugar price.

"Under the current situation, we can't use mechanized measures in raw sugarcane production, which in turn increased our sugar production costs," Lin said.

He said the rate of mechanized sugarcane production in China is currently less than 20 percent, which has resulted in rising labor costs.

"As a result, we had to import raw sugarcane from overseas countries such as Thailand, to offset the rising labor costs," Lin said.

Another factor - the low sugar price - is driven by the overproduction and oversupply of imported sugar, Lin said.

"The government should have a quota for sugar imports and buy up the surplus to keep the industry profitable," he said.

At a panel discussion during the NPC session, Lin called for more use of large-scale concentrated farming in raw sugarcane production.

"Concentrated farming and mechanized production would help reduce sugar production costs," Lin said.

The Jinling Group sold more than 400,000 tons of sugar and generated sales revenue of 3 billion yuan in 2014.

"It's been tough years for most domestic sugar producers, who failed to make profits because of the low sugar price and increased production costs," Lin said.

The company plans to invest more in technology innovations to upgrade its processing facilities in the coming years.

"We will produce high-end sugar to enter the European market," Lin said.

Jinling's exports of sugar currently represent about 10 percent of its total sales.

qiuquanlin@chinadaily.com.cn

(China Daily 03/13/2015 page7)