4
Clients already
appreciate our extensive
F&A knowledge and
with this new model
we will be able to better
service them in their
specific F&A needs 9
)1 i PORK BEEF IN CHINA
Export
Gilles Boumeester:
competitors and provide clients with incisive advice, Leffelaar
believes. Using one of Rabobank's strong assets, FAR, which
produces in-depth intelligence reports on issues and trends
across the key F&A sectors, Leffelaar explains that there are two
main areas in which Rabobank can play a significant role.
'The first is in providing clients with a better understanding
of the market, which means we can offer a one-stop-service.
The second is helping clients understand, and take advantage
of, the emerging trend of coordinated supply chain that we
are now witnessing in China. Rabobank has a great deal of
experience in this area, and we can provide cooperative
structures and supply chain financing to local markets."
According to Chenjun Pan, industry takeovers increased sharply
after an infectious disease outbreak in 2007 decimated the pig
population, causing many small-scale farmers to quit, and she
expects this trend to continue. "Many smaller farmers are not
able to compete with larger sized farms in terms of economies
of scale and food safety. Additionally, there are around 20,000
designated slaughterhouses in China, but a recent policy
change means that the number of slaughter and processing
facilities will decrease, resulting in consolidation activity. We
expect to see companies from outside China showing an
interest in China's processing market."
This expected influx of western companies is particularly good
news for Rabobank, Leffelaar says, as local Chinese banks are
not especially familiar with the needs of western companies.
Jeroen Leffelaar: "I think Rabobank isn't competing for the
Standard or conventional banking products, rather, we need
to focus on the areas where we can bring value to clients,
which is in international networks, flexible fïnancial services
and knowledge." One of Rabobank's key strengths is the depth
of its intelligence reporting through FAR. A report on the pork
market in China was produced by Chenjun Pan earlier this year,
and was received very positively by clients. 'The report took
an in-depth look at pig farming in China, covering everything
from current market trends, M&A activity, sector challenges
and future opportunities. We're confident that it will develop
new business lines for us. I've spoken with clients in the United
States whose interest was sparked by the report, and we've
received a lot of positive feedback from relationship managers
across the Rabobank, who say that their clients have a better
understanding of the business openings in China because of
the intelligence we're producing."
The next step in the process will be building stronger bonds
with Chinese companies, Leffelaar says. "We have access to
Chinese pork companies, but so far we don't have in-depth
relationships with enough of them," he explains. 'There are
a number of reasons for this: firstly, we are slightly more
expensive when it comes to financing than local banks.
Secondly, the Chinese market is not ready for highly structured
solutions, and because many Chinese companies look for a
listing on the stock market, financing from banks is not such
a priority. Rabobank's current product offering in China is
limited; we currently can't offer 'flow products', such as cash
management, which allow us to get a good insight into the
client's activities. In general, our tangible relationship with
a cliënt starts with a bilateral financing or participation in
a syndicated financing. All pretty straight forward financing
rather than structured deals.
Despite the fact that these companies look for a listing on the
stock market rather than financing from a bank, our strategy is
to continue to see them. When they choose to export they'll
require international market access, and not only can we help
them on that front, we'll also be able to provide them with
additional access to F&A knowledge, which just happens to
be ourspeciality."«
i issue 24 -Y RI WORLD