Samir Kumar, Director and Founder of Sino Hero Foods, explain why Hong Kong continues to be the best trade platform for China

The Chinese mainland's growing appetite for quality foods from around the world was an opportunity grasped by Indian entrepreneur Samir Kumar.

He set up his company Sino Hero Foods Ltd in 2005 and now imports and distributes a wide range of products to cities throughout the mainland.

Mr Kumar had identified the market's growth potential during his time as a director at Frontier Foods Pty Ltd in Hong Kong. He also knew he was in the right place, with Hong Kong being a simple, swift and cost effective centre for imports and re-exports to the mainland.

"Main motivation (for setting up the company) was to proactively go after the tremendous emerging opportunity for trade between China and India, commonly known as ‘Chindia'," Mr Kumar said. "We wanted to create a specialist company that focused on this market. To give you an example, trade 10 years ago between the two nations was a mere US$400 million and this year has surpassed US$20 billion, which we feel is still a drop in the bucket."

Leading brands

Sino Hero Foods is engaged in a range of business activities, representing, among others, India's largest dairy brand Amul and its largest instant curry brand, MTR Foods (no relation to Hong Kong's MTR transit system). These brands are sold through supermarket chains Park'n'Shop in Hong Kong and Macau, and Jusco, Seiyu and Carrefour in the mainland. "We think there could be tremendous potential for this range of convenient, vegetarian, preservative-free products. We are now trying to target airline catering as well as the food service industry," he said.
 
The company also imports wine from Australia under its own label 3 Roos, as well as the famous McPhersons range. Mr Kumar says the recent halving of wine duty in Hong Kong has helped tremendously in using the city as a trans-shipment port to the mainland.

Its consultancy division advises international companies on China business, among them Lowe Corp of New Zealand, a leading baking fats company.
 
Mr Kumar says Hong Kong continues to be the best place to do business, especially when exporting to the mainland.

Rule of law

"Because of the rule of law, we do all our contracts in Hong Kong," he said. "We have had a dispute in the past in the mainland but as the contract was in Hong Kong, we could get a swift court judgment that saved us the tremendous grief and cost of going to Chinese courts.
 
"As a financial centre, we are able to negotiate letters of credit, receive and make payments with ease and efficiency with no capital controls even though we are an SME with limited resources. Taxation and duty structures are very simple and administered by arguably the best and most customer friendly civil servants in the world.
 
"And finally, the tremendous efficiency and motivation levels of staff in Hong Kong are unmatched anywhere."
 
Mr Kumar believes that recent food safety issues arising from the mainland will provide further opportunity for selling good quality, imported food products there. Similarly, as mainland companies move to rapidly upgrade their own quality standards Sino Hero Foods is exploring avenues to source dairy, oils and fats products from reputed companies in the mainland for export to markets like the Philippines, India, Pakistan and Middle East. 

Eye on expansion

"We are currently talking to potential investors about Sino Hero Foods taking strategic equity stakes in some dairy and food production facilities, as well as expanding our retail product penetration to take advantage of the tremendous opportunities in this market," he said.
 
"All the investors are right here and looking for opportunities for the next big thing. We can look them in the eye and say we did it in Hong Kong once before by going from start up to becoming the largest exporter of cheese into the mainland (through Frontier Foods), and we can do it again with our new business, Sino Hero Foods."
 
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Sino Hero Foods Ltd