From the Ground Up - McCain Foods Limited

needed clean seed to do the trials, to see if it would grow
at all.” But China, like all countries, is protective of its
agriculture and reluctant to allow the import of foreign
seed. Allison McCain contacted government officials and
told them that McCain would not invest unless it was able
to test with good-quality seed. Finally, the Chinese authorities
agreed to allow McCain to import a very small
amount of Canadian high-grade seed potatoes.
The China agriculture project was the responsibility
of Tony Ford, agriculture director for McCain Australia.
The company spent seven years looking for a good location
in China to grow processing potatoes, a decision that
would in turn determine where the first factory would be
built. The south of the country was too warm. The temperatures
were better in the far north, but the soils there
were too heavy. Finally, McCain’s experts settled on the
area around Harbin, in northeast China. In 2005, a stateof-the-art
french fry factory, built at a cost of $50 million,
opened in that city of ten million people.
Since there were no potato farms near the new factory,
McCain has had to train growers, as well as rent
land to grow its own potatoes. Just as when the company
first began processing operations in New Brunswick in
1957, the quality of the potatoes in China at first was not
good. Potatoes were damaged during harvesting and
while being transported to the plant. Consequently, the
plant’s early products were not up to the standards of
KFC and McDonald’s, the major customers for french
fries in China.
As of 2007, McCain was not making money in China.
However, Kai Bockmann, managing director of the
Chinese operation, predicts that of all the start-ups in
recent company history, it will be the one to break even
the fastest. The only local competitor is the U.S. company
Simplot, which built a french fry line in a vegetable factory
as a joint venture with a Chinese company in 1990.
KFC is a huge success in China, and McDonald’s is also growing quickly. The only
other important chain is Dicos Fried Chicken, owned by a Taiwan company. “The
big problem in China is to get people to eat french fries outside of KFC, McDonald’s,
and Dicos,” says Bockmann. For example, there are more than thirty restaurants in
the food court of the Shanghai office building that has housed McCain’s Chinese
sales office since 1996 but not one of them sells french fries. Typically, the market for
french fries in countries without a french fry tradition evolves from international
quick-service chains to local chains to independent restaurants and then to the retail
stores. As of 2007 in China, however, the three major chains were still 80 percent of
the market. As always, McCain is in it for the long haul.
The people of northern China, where the McCain factory is located, are potato
eaters, but they eat their potatoes in stews and soups, not as french fries. Eventually,
McCain hopes, they will enjoy the same fries they ordered at KFC and McDonald’s
in their homes. On the package they will see the same McCain brand and logo that
is familiar in much of the world, but they will also see the Chinese letters that are as
phonetically close as the company is able to come to reproducing the word McCain in
Chinese. It’s pronounced “Mei Kang.” In Chinese, that means “perfect health.”
212 From the GrouN d up
New w orlds to CoN quer 213
ABOvE: The China team
at the new plant at Harbin,
2006. Kai Bockmann and
Ian Robinson are front row,
second and third from
the left.
FACING PAGE, tOP:
Chinese workers cutting
seed potatoes, 2004.
MIddlE: Liu Zhenbao,
McCain seed potato manager,
in Keshan, China, proudly
displaying high-class seed
potatoes, a pile of Russet
Burbank seed potatoes
behind him, 2005.
BOttOM: Traditional
harvesting of potatoes in
China, 2005.