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BIZCHINA> Companies
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Direct-buy program benefits retail, agriculture
By Liu Jie (China Daily)
Updated: 2009-11-09 07:49 The US-headquartered supermarket behemoth started the Direct Farm Program in China in 2007. Over the past three years, the company has set up 11 direct purchasing bases in seven municipalities, provinces and autonomous regions that cover a total area of 10,000 hectares and directly benefit more than 200,000 farmers. Besides winter jujube purchased from Shandong, Wal-Mart directly buys vegetables from Nantong in Jiangsu province, Miyun in Beijing and Guiyang in Guizhou province. The company purchases apples and grapes from Wafangdian in Liaoning province and organic cereals from Jianping in Liaoning province. "Direct Farm is one of the most representative examples of our company's sustainability strategy," said Doug McMillon, president and CEO of Wal-Mart International. "This initiative gives us a chance to bring our global experience in sustainable agriculture to China's supply chain, boosting scientific farming, environmental protection and strengthening the monitoring of food safety, which eventually delivers our Chinese customers quality products at a low price," McMillon said. Sustainability The Fortune 500 company recently signed a formal Memorandum of Understanding with the Ministry of Commerce and Ministry of Agriculture to launch additional initiatives. The first was to set up Wal-Mart Fresh Food Distribution Centers to guarantee the freshness and quality of products. Wal-Mart China has set up two small-size distribution centers in Shenzhen and Guangzhou and will continue its efforts in this area, according to the company. The second initiative was to equip the fresh food distribution centers with food testing stations to ensure food safety. The first one will be located in Guangzhou.
McMillon said Wal-Mart also will establish information exchange platforms and promote international information exchanges regarding the distribution of agricultural products. "We have similar programs in other nations such as America, Europe and Brazil," he said. McMillon declined to disclose the amount of commodities Wal-Mart had purchased so far in China, but did say China is one of the retail chain's larger purchasing places. "We have seen that the quality of commodities we purchased from China has increased, and our suppliers here are considering social responsibility and sustainable development of the environment seriously," said McMillon, who first came to China as a Wal-Mart purchaser in 1993. Wal-Mart entered the Chinese market and opened its first store in Shenzhen in 1996. The company's global procurement operation has been headquartered in Shenzhen since 2002. Wal-Mart's rival in China, France-based Carrefour Group, also operates a Direct Farm Program in cooperation with commerce and agriculture ministries. Lars Olofsson, global president of the French retailing company, said during a visit to China in September that the Direct Farm Program effectively helped reduce its purchasing costs by about 20 percent. (For more biz stories, please visit Industries)
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