Inner Mongolia News: Ms. Sun, we want to thank you for your willingness to answer a few questions about the current state of the processing tomato industry in Inner Mongolia. Could you start with a few words of presentation?
Ye Sun (Ino): I am the founder, owner and operator of Heesure Company. I hold a degree in economics and graduate degrees in International Business and Trade. I am married, with a daughter.
Inner Mongolia News: How could you describe the quality of raw material (soluble solids, grouped maturity, HMC, etc.) for the 2013 season?
Ye Sun (Ino): Overall, the quality of the Bayan Nur crop was better than average. The excellent final crop conditions. Mold and color were better than average.
Inneer Mongolia News: Ms Sun, what are your comments on the total preliminary results (shortage) for 2013?
Ye Sun (Ino): Our season in Bayan Nur resulted in a lower than expected crop of almost 0.35 million tons, as a result of a few less planting acreage than expected and a record yield. In 2013 it is hard to conclude contracts with growers due to the depressed market, low profitability and rainstorm damage of 2012.
Inner Mongolia News: Are these results likely to have an impact on the balance between the main processing regions in terms of Bayan Nur trade?
Ye Sun (Ino): Bayan Nur continues to have consistent and good quality tomatoes from which to make excellent, low cost tomato paste. Our relatively dry climate and long season also gives Bayan Nur excellent reliability for supplying quantity, as well as quality. The long season and our economies of large scale provide us low processing costs. Therefore, depending on logistics costs, plus subsidy programs and tariffs in other countries, we expect to improve our competitive position in the world based on all these factors.
Inner Mongolia News: Do you foresee any changes in the price of 2014 raw materials in China? In this connection, what is your opinion of the profitability of the tomato sector?
Ye Sun (Ino): The price of tomatoes has kept up with alternative crop profitability. The growers have had a good prices in 2013. However, profitability has not been as good as the price increases because of the significant increases in their costs. Therefore, we expect a meaningful decline in the price on tomatoes for 2014.
Inner Mongolia News: According to you, what would be the optimal conditions (quantities and prices for raw materials) for a successful season next year?
Ye Sun (Ino): Worldwide, we calculate consumption going up at a rate of 2.3% per year. I believe a crop equal to 2011 and up to 0.2 million tons higher would be in line with demand. This assumes a 15% to 20% increase in raw material price can be absorbed. Assuming Bayan Nur continues on its trend of increased exports which we are currently experiencing, our inventories going into the 2014 crop will be moderately greater than average. Even considering acontinuation, or moderate increase, in exports, anything more than a Bayan Nur crop of 2 million tons would add to these inventories. If we have a crop of between 0.19 and 2 million tons, we will approach record inventories going into 2014 and face a depressing market.
Inner Mongolia News: What is the current situation of Bayan Nur processing tomato industry, with regards to the processing capacity, the different types of products, etc.? What are the strengths or weaknesses of the processing tomato industry in the Inner Mongolia?
Ye Sun (Ino): Relative to exports, and thus world impacts, Xingjiang and Inner Mongolia (Bayan Nur) is the only two factor in China. I discussed Bayan Nur competitive points in question
Inner Mongolia News: Ms. Sun, could you say a few words more specifically about Heesure Company ?
Ye Sun (Ino): At Heesure Company, we cooperate with some factories in Bayan Nur tomato production region . Some factory is dedicated to ingredient tomato paste. The other, while it produces a significant quantity of tomato paste, specializes in cold break tomato paste, hot break tomato paste, ingredient diced tomatoes, ingredient formulated tomato products, and a full line to canned tomato products. Some factory is currently dedicated to tomato juice, however it was also designed for ingredient tomato paste.
Inner Mongolia News: Without revealing anything strategic, what plans does Heesure Company have for the future?
Ye Sun (Ino): We plan on concentrating on being the best we can at servicing our customers and utilizing our resources prudently and productively. We watch the Bayan Nur ( Inner Mongolia ) , Xiangjiang and world tomato processing scene carefully for opportunities and threats.
Inner Mongolia News: Do you intend to process new products, or focus on online marketing and get highly targeted importers to Bayan Nur?
Ye Sun (Ino): We are primarily an ingredient tomato paste supplier in Bayan Nur ( Inner Mongolia ) and expect to concentrate on this. Behind this scene is our activity on the dehydrated vegetables, sunflower oil and seeds end of the business, in which we take an active interest and dedicate significant resources.
Inner Mongolia News: Does Heesure Company plan to play a role on the export market or develop its export activity?
Ye Sun (Ino): We have always been an international trading company. We have exported to all significant importing countries at one time or another.