beyondbrics

By Gregory Meyer in New York

It’s well known that a wealthier China is one that eats more protein. According to Zishen Wu, chief executive of fertiliser company Yongye International, China also wants to eat more healthfully.

Mr Wu’s company, based in Beijing, sells organic fertilisers made of fulvic acid through a network of 14,000 dealers in Inner Mongolia and elsewhere in northern China.

“Chinese consumers are becoming more picky about what they eat,” he said. “Before they just wanted to feed their stomach. Now they want better, safer, healthier food.”

This should come as no surprise after a scandal over contaminated milk powder killed at least six and sickened 300,000. It also comes after China’s per capita consumption of milk has increased tenfold and meat consumption has quadrupled since 1980, according to the UN Food and Agriculture Organisation. According to Cargill, the world’s largest agricultural trader, the financial crisis did little to smother demand for processed foods and proteins in emerging markets.

Mr Wu started Yongye in 2003 after years managing state-owned enterprises. He was introduced to fulvic acid, which is extracted from lignite, a lightweight coal, as a remedy for the herbs on his plantation in Inner Mongolia. He dropped by the FT while in New York meeting potential investors.

With profits of $2.5m last year on $98m in sales, Yongye is a far cry from fertiliser giants Mosaic and Potash. The company has patented the way they mix their liquid fertilisers, but admits fulvic acid is a commodity. To sell farmers on their product they are taking advice from a vice president who wrote a book called “Learn Marketing from Chairman Mao.” This means village walls painted with massive slogans, pictures of verdant fields and bottles of Yongye fertiliser.

“Farmers are very conservative in their mindset,” said Sam Yu, chief financial officer. “They don’t immediately trust new things.”

Related reading:
Emerging markets show appetite for western food, FT
Trading rice for hamburgers, FT beyondbrics
Agribusiness: All you can eat, FT