China Grain Storage Powers Domestic Edible Oil Market

“Jinding Edible Oil's sales target for this year is 200,000 tons, and it is planned to reach 900,000 tons five years later, and it is expected to occupy 10% of the domestic small packaging edible oil market.” Liu Jianmin, general manager of China National Grain Oil Co., Ltd., told the China Securities Journal recently. .

Following the beginning of this year, soybean oil products entered the East China and North China markets, and Jinding brand first-grade rapeseed oil has now begun distribution in East China. This is another move by China Grain Reserves in the domestic small packaged edible oil market. The China Grain Reserves, which is tasked with the strategic reserve of central grain and oil, has a certain cost advantage when it comes to end-consumer markets, and its processing cost is about 6% lower than its competitors.

Planned sales of 200,000 tons this year In January 2012, China National Grains and Oils Co., Ltd. officially launched a small package of edible oil brand - Jinding, to enter the domestic edible oil market. It is understood that as of now, Jinding soybean oil has accumulated sales of more than 40,000 tons.

“Our goal is to enter the top three markets.” Wang Qingrong, deputy general manager of China National Grains & Oils Co., Ltd., said that Jinding plans to launch food this year on the basis of the introduction of Jinding soybean oil and the introduction of first-grade rapeseed oil. Blended oils, aromatic coriander oil and many other categories will be launched in the long-term planning of China Ding, Huading and other edible oil brands.

It is understood that in 2012 Jinding will use East China and North China as the main battlefield for sales. “For the time being, we will not distribute goods nationwide, and a large area will be listed in Beijing until July and August,” Wang Qingrong said.

This year, Jinding’s planned sales volume of edible oil is 200,000 tons, and effective coverage of 50,000 outlets in major regions such as East China, North China, and South China is achieved on the channel. According to reports, the five-year development plan of China National Grain and Oil Corp. is that the edible oil brands will achieve 900,000 tons of production and sales by 2016, with an average annual growth rate of more than 40%, and a market share of 10%.

With the continuous development of economic development and people’s living standards, especially with the gradual withdrawal of bulk oil, the small-packaged edible oil market has developed rapidly, with sales and sales increasing year by year.

At present, in the field of domestic small packaged edible oil, foreign-invested enterprises such as Yihai Kerry have long been leading, and Yihai Kali Department represented by “Arowana” occupies 45% of the market share of small-packaged edible oil, taking “Fulinmen” as The representative of COFCO accounted for approximately 15% of the market share, while "Luhua" occupied approximately 7%-8% of the market share.

Under the background of the initial formation of the market competition pattern, for the entry of the new brand “Jin Ding”, the relevant person in charge of the China Grain and Oil Association stated: “The challenge is whether or not the pressure is too great.”

Liu Jianmin is also frank and the Jinding brand has just started. The fierce market competition is certain, but based on the strong support of China's grain storage industry chain, he is still full of confidence in the five-year plan.

Low processing costs 6%

In fact, due to the rising costs of raw materials and labor, coupled with the state's control of the terminal edible oil market, many oil processing companies in China were in a state of marginal profit or loss last year. Dongling Grain & Oil lost 188 million yuan last year, and its gross profit margin was -0.85%. In 2012, the operation of edible oil processing companies improved slightly. Under this background, the Sino Grain Reserves, which is tasked with the strategic reserve of central grain and oil, has attracted widespread attention in the end-consumer market.

China National Grain Reserves Co., Ltd. is responsible for the management and management of central grain and oil reserves, and at the same time accepts the state's entrusted implementation of grain and oil procurement and sales adjustments and other regulatory tasks. The industry stated that the central reserve oil's rotating resources are its core resources, and its acquisition and reserve resources throughout the country can enable it to grasp the raw material market and rapidly cultivate its sales network.

"New entrants have the disadvantages of the brand and the market, but they also have technical and cost advantages." Wang Qingrong said. According to reports, with the unique advantages of China Grain Reserves, the processing cost of its edible oil products can be 6% lower than its competitors. From the overall price, “Jinding” will be 3%-5% lower than Jinlongyu and Fulinmen brands.

Liu Jianmin stated that “Jinding” is positioned in the mass consumer market, entering the market, and the channels and brands are not mature enough. Therefore, a relatively low-price strategy is adopted. “The storage of grain in the edible oil market is not a purely commercial activity. Profit is not the only measure.”

According to reports, in order to support the development of small-packaged edible oils, currently China Grain Storage has three small-packaged edible oil processing bases in Zhenjiang, Dongguan, and Tianjin, as well as four OEM processing plants. The current small-package production capacity is 600,000 tons. In addition to the soybean oil base, the company's rapeseed oil industry base is also under planning and construction. "While basing on mainstream oil products, the future of grain storage will not rule out the possibility of properly entering the woody oil market and enriching product categories."