Monday, August 2, 2010

Interview: Mr. Youn Jang-bae , President, Korea Agro-Fisheries Trade Corporation

By establishing leading export groups and cultivating professionals, Korea Agro-Fisheries Trade Corporation (aT) enhances the export competitiveness of Korean agricultural and fishery products and provides consulting and marketing support.
For Enhanced Export Safety of Agricultural and Fishery Products, aT strives to maximize export safety through the adoption and equalization of internationally-accepted GAP, ID management for fresh agricultural products, and strategic safety management by inviting inspectors from overseas.
Agro-Trade is an Internet Trade Mediation System that develops and expands overseas markets for export companies. aT also plays a leading role in providing information services, such as KATI, which provides information on the export of agricultural and fishery products on the Internet.
Moreover, aT’s nine aT Centers in six countries around the world play active roles in supporting the export of Korean agricultural food products.
Excerpts of interview with Mr.Youn Jang-bae, President, Korea Agro-Fisheries Trade Corporation:

>Founded in 1967 as Agriculture & Fishery Development Corporation for balanced development of agriculture and industry, it was renamed as Agricultural and Fishery Marketing Corporation (AFMC) in 1987 for the settlement of marketing and promotional functions. In 1992 we expanded the export promotion program and suggested reinforcement of competitiveness by developing export system of agriculture and fisheries in the era of trade liberalization.
Our purpose is to stabilize the food supply by price stabilization and improve distributional system so we can improve farmers’ profit and develop national economy in balance.
We have been undertaking following four projects: 1) Export promotion: Foundation/production of base of export items, opening up the global market, commercialization of export items, and etc. 2) Marketing innovation: Operation of cyber agricultural and fisheries product exchange, activation of wholesale market, and support for local producers and retail market. 3) Price stabilization: Meet demands and supplies by buffer stock and inter-Korean agricultural cooperation. 4) Food industry support: Create new growth power of agriculture by activation of food companies, establishment of infrastructure, and globalization of Korean food.
>Export situation has not been ideal due to the drop of exchange rate lasted since the beginning of this year, bad crop caused by temperature changes, and global economic depression caused by European crisis. As of May 31st, we recorded $2.1 billion, 23% increase compare to 2009: farm products $ 1.286 billion (23%), forest products $0.075 billion (106%), fishery products $0.686 billion (18%).
For fresh products, production of vegetable and horticultural products has been inactivate due to the unusually low temperature, however, it’s per item cost have increased according to the decreased production of Japan, the main target: vegetable $69 million (15%), flower $30 million (44%), fruit $52 million (27%).
Export of mushrooms, enoki ($7 million) and king oyster ($4 million) particularly, is decreased and congested due to the inactive export situation to counties like China and Hong Kong. For fishery products (tuna $143 million, halibut $21 million, oyster $36 million) and process food such as sweets ($104 million), drinks (beverage $39 million, liquor $105 million) export rate is increased according to the economic recovery of China, Russia, and Southeast Asia as well as their attempt for opening a new market.
The export rate has been increased according to the active economic growth of main exporting countries such as China ($281 million, 55%), Russia ($98 million, 27%), Japan ($675 million, 11%), U.S.A ($204 million, 16%), EU ($130 million, 83%), Hong Kong ($91 million, 26%), Taiwan ($57 million, 29%) and ASEAN ($ 245 million, 32%).
>It took 20 years to increase the export rate of agricultural products from $3 to 4 billion, however, 2 years to raise up to $5 billion. In the past, Korea’s export was mainly on primary industry products, only dealing with so many countries like Japan and dependent on the quota. But recent export is expanded to high value added products such as process food, and our effort for opening up a new diverse export market has made a great contribution.
We strengthened the stable supply system of high quality agricultural products by scaling up and systematization of production in poor situation started from economic crises in 2008. In particular, we expanded and modernized the facilities like constructing glass houses, established 19 export-specialized organizations and 16 advisory committees to consolidate our control power in the global market.
Also, we have been implementing new marketing strategies for large sales, expanded customer range from overseas Korean markets to local markets, and concluding MOUs with major supermarkets (8 countries, 22 companies) to push ahead with the direct export. The partners who signed MOU with aT center include; Melissa’s, Titan Foods, Rhee Bros, H-mart, CGC Japan, Marche, Lotte mart, RT mart and etc.
We are also aiming to contact China and Southeast Asian market that have great potential. The export rate to China recorded the greatest increase from $336 (′06) to 565 million (′09), 68% increase. The changes of export rate in Southeast Asian countries are as follows: 1) Hong Kong- $159 (′06) to 196 million (′09), 23 % increase, 2) Taiwan- $110 (′06) to 155 million (′09), 41% increase. For ASEAN, the rate increased from $267(′06) to 521 million (′09), 95% increase.
Rapid growth of export has been considered as a result of our intensive focus on systematic export policies including establishment of strategies for accomplishing $10 billion and strengthen export support systems.
>Due to the different food cultures, it is very difficult to enter the liquor market in EU and it is limited to the Asian markets only. It takes about 6 to 10 months for the store location as well as requiring costs.
Hence, we are going to implement the following long and short-term strategies to promote Korean food products in EU region:
1) Participate in exhibitions for health and restaurants reflecting European health trend and organize promotion events in major retail stores across the Europe.
-Exhibitions: Bologna, Lyon, Cologne, Barcelona, Brussels
-Promotion events: England, Germany, France, Austria
2) Promote a co-marketing strategy with major food companies succeeded in local market-Cj and Daesang, to lead into an expansion of export.
3) Conclude MOUs and promote co-marketing system with major local retailers to take over the local market directly in a medium and long term, and help Korean agricultural products to enter into the local European markets.
-Provide product information, select promising items, organize systematic sampling promotion events for major retailers who signed MOU.
-Organize general promotion exhibitions linked with Wahnamhong (Chinese, 15 stores) in Europe
-Expand the location of Korean food store in ASDA, the major liquor retailer in England: 2 units (Nov. 2009) → 4 units (April. 2010) → 50 units (by end of 2010)
The Korean government and aT center is going to constantly push forward with the political support reflecting the food safety and health interests for the Europeans. Also, we are aiming to increase the export rate from current rate of 6 to 10 percent by 2012 eventually.
>We are going to focus on establishing infrastructure, training professional manpower, and supporting overseas expansion of Korean restaurants for this year’s Globalization of Korean project. Our useful networks, including Korean Food Foundation, Korea Tourism Organization and KOTRA will fulfill their roles to contribute to the project.
Also, we aim to activate the globalization of Korean food related to our professional function. That is to vitalizing the export of Korean food products, supporting with consultative groups for Korean restaurants using aT center in overseas, and providing promotional project such as developing manpower.
>Korean food, with excellent fermented food, is considered as high quality and healthy food. Kimchi, ginseng and citron tea are the most famous food that are healthy and low in calories. In particular, kimchi has been chosen as one of the world’s top five cuisines which is effective in preventing SARS (severe acute respiratory syndrome) and many other disease. Meanwhile, Yuichiro Miura who conquered Mt. Everest in the age of 70 revealed that he packed 30kg of kimchi and ate kimchi stew to fight with a cold weather when he climbed the mountain.
Modern people are not only sensitive to its taste, but also prefer health food. In this context, Korean food is ideal for the modern food trend. Recently, consumption of meat has dropped due to the booming in healthy, fresh and organic food. Considering that people prefer to buy more beans, fruits, and vegetables, Korean food are the most ideal food with its outstanding taste and quality.
Since western countries are paying more attention to Korean food, I would say we are going to try to discover and export our superb products that will attract more interests of not only Asians, but the whole overseas countries. aT center will also put our best effort for the effective marketing strategies to create new markets and sustainable demand.