China, Sanderson Farms partnership growing

Nov 22, 2008 (Laurel Leader-Call - McClatchy-Tribune Information Services via COMTEX) -- SAFM | Quote | Chart | News | PowerRating -- To many Americans, chicken "paws," and giblets may be byproducts that are thrown away after processing. But, to Sanderson Farms and the People's Republic of China, the feet, along with other parts of the chicken, are part of a multi-million dollar trade agreement that has more impact on foreign and domestic relations than many people realize.

Welcoming a group of VIPs from the People's Republic of China to the Sanderson Farms, Inc. headquarters in Laurel Friday, President and COO Lampkin Butts said open dialogue between business leaders and political leaders from other countries is quite important to the local and national economy.

"At Sanderson Farms, and in our industry, exports and trade with China are very important to our business," Butts said. "In this fiscal year, Sanderson Farms has sold 71 million pounds of chicken products to China, valued at $55 million. Those products include leg quarters, wings, giblets, and paws. Paws make up most of the volume: 51 million pounds, $40 million. We export product to China, Russia, Ukraine, Kazakhstan, Mexico, and the Caribbean. Trade with China represents 15 percent of our total exports, second only to Russia."

The relationship between the Laurel-based company and Ambassador Extraordinary and Plenipotentiary of the People's Republic of China to the United States of America Zhou Wenzhong began, Butts said, when two Sanderson Farms plants had issues with China's Administration of Quality Supervision, Inspection, and Quarantine. Citing recent political differences between the countries, Butts said Sanderson Farms was having problems exporting to China because that country's AQSIQ, which is similar to the United States' Department of Agriculture, wouldn't approve some of the imports into that country. Butts said Sanderson Farms couldn't work with that agency because of legislation that banned China's exporting of cooked processed chicken meat into the United States. A group of people from Sanderson Farms went to meet with Wenzhong in Washington, D. C. Once that all got worked out, Wenzhong expressed interest in traveling to Laurel to see the Sanderson Farms operation.

"(Sanderson Farms Manager of Export Sales) Herbie Hoover and I visited with the ambassador in Washington recently to ask his assistance in resolving a problem we had between our plants and the Chinese U. S. D. A.," Butts said. "Working through that problem gave us the opportunity to get to know the ambassador and his staff and arrange the trip to Mississippi to further enhance our relationship. We are grateful they have traveled to see us.

"We are delighted to have this visit and be able to discuss trade with China and establish open lines of communication for exchange of ideas and to have a partner to deal with problems that may arise."

Ambassador Wenzhong said the potential for trade growth is strong between not only Sanderson Farms, but other countries across the United States.

"This relationship is not only important for China and the United States, but the whole world," Wenzhong said.

Wenzhong said the partnership has both a global significance and a strategic significance, explaining that business partnerships can encourage political leaders to work together. He said political leaders should work through trade restrictions "so we can buy more from you." Citing more partnerships between China and the United States, Wenzhong said prospects are strong.

"We are making some progress," Wenzhong said. "I think it's a very important mechanism for these countries. It's very useful and we hope it will continue."

Wenzhong said China's exchange rate has increased 20 percent since July 2005.

There is also the desire for investors from China to invest in American businesses, he said.

"China entrepreneurs are looking to market overseas," he said.

As far as Wenzhong's to Laurel, the short period was packed with tours of the Lauren Rogers Museum of Art and Sanderson Farms facilities, meals, and an overnight stay at the Laurel Inn Bed and Breakfast. He was joined by his wife, Shumin Xie, Minister Counselor of Congressional Affairs Ping Zhang, Minister Counselor for Political Affairs Zongze Ruan, and Secretary to Ambassador Wenzhong Maoming Zhang.

"We had a good time," Wenzhong said. "I've never seen so many chickens. ... I really appreciate the opportunity for the stay and the opportunity for coming and talking to you."

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