23 B u s i n e s s p l a n | F i s h m e a l a n d f i s h o i l p r o d u c t i o n Compet i t ion COMPANY COMPETITIVE ADVANTAGE IN THE CHINESE MARKET COMPETITION A feature of fishmeal trading in China is that nearly all its volume is imported by five largest Chinese traders. Because of the degree of monopolization, they receive a disproportionately high margins. The significant advantage of Company in compare to other fishmeal suppliers is that it managed to establish its own sales in China. The direct sale of fishmeal to agricultural companies is much more cost-effective business. The main problem in this business is to organize transportation of fishmeal in the port and logistics in China. Company has solved this challenge by creating an office in Shenzhen - Shenzhen Agro Feed Service Limited and by implementing fishmeal terminal project at the port of Shenzhen. Figure 21. Fishmeal Terminal An important factor of using Terminal is a risk reduction. Maintaining this terminal Company will be able to maintain ownership of the fishmeal until it is sold into local Chinese market. This eliminates the risk associated with Letter of Credit discrepancies and reduces cargo costs. Another meaning factor is excluding the local traders (see above) and increasing gross margins And the third terminal advantage is a price control. Fish meal inventory in terminal in China gives company a flexibility in choosing a moment of selling. Company can hold the hold inventory if prices are too low. TERMINAL ADVANTAGES
RkJQdWJsaXNoZXIy MTc0MzY4Mg==