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Chairman makes first trip to Japan, China

Staff writer

Although Japan and China have been two of the U.S. Grains Council’s most important customers for 30 years, council chairman Terry Vinduska of Marion had yet to visit either country before Sept. 11.

Japan is the number one importer of U.S. grain.

China may not be far behind after importing 2 million metric tons of corn and 2 million metric tons of grain in 2009.

Though he was newly appointed as council president this year, he has been with the council for 17 years. Vinduska had met Japanese and Chinese representatives while they were in the U.S.

Vinduska’s whirlwind tour of boardrooms and meetings started Sept. 12 in Tokyo. They met with the U.S. embassy staff to review trade agreements.

On that Monday, Vinduska was seated in the place of honor at the table with the Japanese Free Trade Association, Starch and Sweetener industry, and that night with the federal agriculture cooperative.

“There the chairman title receives a huge level of respect,” he said. “I was seated at the place of honor. I was always offered tea first. No one would sit down before me.”

Sept. 14, Vinduska met Zen-noh, a Japanese importer of grain that has a shipping center in New Orleans and is part of the Grains Council. Vinduska talked with the Zen-noh CEO privately to discuss the quality of the imported grain. That afternoon, Vindus-
ka sat down with the Animal Safety Division to discuss toxin levels in U.S. grain.

“The Japanese standard for toxins is more stringent,” Vinduska said.

The higher Japanese standard for allowable toxin levels is an example of a culture Vinduska said value precision.

“Their way is the right way and in a lot of ways they’re right,” Vinduska said.

One of the most important signs of respect Vinduska could offer, in Japan and China, was properly executing their business card ritual. When executives greet each other in Japan and China, they hand each other their business cards with two hands. Usually for American visitors, Japanese businessmen will offer their right hand for a handshake, but Vinduska was careful never to offer his hand and only accept the gesture from his counterpart.

He said he scored points when he handed over his card with his information written in their home language.

“They were impressed,” he said.

Japan is the largest importer of U.S. grain and has been importing from the U.S. for over 30 years. Vinduska could not risk losing the council’s most important contract. The Japanese value consistency, something U.S. farmers have always been able to deliver.

“We’ve built a reliable relationship because we’re consistent,” Vinduska said. “If you sign with the U.S., we will deliver. They have a lot of people and not a lot of grain producing space. They need grain and almost everything comes from the U.S.”

In every meeting over the council’s five-day stay in Tokyo, the Japanese expressed concerns about the quality of the grain.

Japan buys No. 3 quality grain, which has more dust and cracked kernels than No. 2 quality. Most years, Japan receives No. 2 grain because the U.S. did not produce any No. 3 grain.

“They pay for No. 3 and get No. 2,” Vinduska said.

Last year, the harvest season was wet and produced more No. 3 quality grain.

Vinduska asked importers to purchase No. 2 grain if they were worried about quality. A female CEO responded by crossing her arms in a firm, steadfast response, signaling that they would do not budge.

“They can’t worry about the quantity so they worry about quality,” Vinduska said. “It was a ploy to drive the price down.”

Also in every meeting, the Japanese expressed a fear that the U.S. would not produce enough grain to satisfy Japan and China.

“I looked them in the eye and said yes we will,” Vinduska said. “One thing the U.S. farmer has been good at it is producing quality grain. The grain has to go somewhere.”

In each country, Vinduska had a free day. On Wednesday, he went to a 14-story shopping center that he said was as nice as any mall the U.S. has to offer.

In China, he went to the Great Wall.

“The engineer in me marvels at what they were able to do,” he said.

China

The reason the Japanese were worried about China is because the U.S. Grains Council experienced the perfect storm in China last year, Vinduska said.

The council has worked in China for 30 years but China had only purchased a small amount of grain and corn from the U.S. in the early 1990s. They did not buy any corn or grain from the U.S. two years ago.

Most of what the council did over their 30 years in China was working with pork producers to expand their operations.

“You talk about a long term investment,” Vinduska said. “One of the U.S. Grains Councils philosophies is to build a demographic for U.S. grain.”

Over the past 30 years, the Chinese economy has boomed giving every Chinese citizen more money than they have ever had.

The average farm in China is approximately 1.5 acres. Vinduska said the cost of living is low enough that a family can subsist on a farm that size. However, most farmers are grandparents, children, and some wives because men have gone to cities because of an insatiable demand for labor.

“Their farms are like the U.S. welfare program,” Vinduska said. “We give people money to live; the communist government allows them to subsist.”

Because there is a high demand for labor, Chinese citizens have more wealth than ever before.

“The first thing people do is they buy better food,” Vinduska said. “They started buying more pork.”

In 2009, China experienced a poor corn harvest. The demand for pork combined with their inability to feed their pigs, forced the Chinese to import U.S. corn.

“Do they want to risk hundreds of millions of unhappy people or do they want to import U.S. corn?” Vinduska said of the government’s options.

Last year, China purchased 2 million metric tons of corn and another 2 million metric tons of grain.

Vinduska flew to Beijing and spent Sept. 16 through 19 meeting with the Chinese to reaffirm the relationships that allowed for that banner purchase.

“We talked to a large importer who said they will always import U.S. corn,” Vinduska said.

The most important importer Vinduska met with was China National Cereals, Oils, and Food Stuffs Corporation and its CEO Ning Gaoning. The company, abbreviated COFCO, is the communist government’s organization for importing corn and grain, although Ning has been pushing to try to make COFCO a private entity.

Vinduska was prepped before the meeting to expect tough questions from Ning. When Vinduska entered the room, Vinduska immediately knew who Ning was by the way he interacted with the other COFCO representatives. He could tell that Ning’s employees looked to him for leadership.

“He’s got the quality of a CEO; the ones that are successful,” Vinduska said. “When you see a CEO interact with other people, you know who is in charge.

“He has to express himself very clearly. They don’t have time to waste. They don’t repeat themselves. They’re always in control but a good CEO is always respectful.”

With Ning and Vinduska seated across from one another, Ning asked Vinduska in clear English, “Now tell me chairman Vinduska, will you have enough corn for us?”

Vinduska looked Ning in the eye and without hesitating answered “Yes.”

“Well, how do you know that?” Ning asked.

Vinduska explained that the council projected a 14 percent yield increase on corn.

The explanation appeased Ning and they ironed out the rest of the details in the meeting.

“I think he wanted to see if he could catch me off balance,” Vinduska said. “If I would have been unsure, he would have doubted us.”

Ning’s opposite was the CEO of Waldo-Liuma, whom Vinduska met a day later.

Waldo-Liuma is a pork producer who formed a partnership with a U.S. company in Illinois for genetic material.

Vinduska met with Waldo-Liuma representatives and the CEO was supposed to be out of town. He purposefully changed his plans so he could meet with Vinduska.

“We had heard he was larger than life,” Vinduska said.

The Waldo-Liuma CEO approached Vinduska and the rest of the council team and told them, through an interpreter, that he only knew two English phrases.

First, he tried an Elvis Presley imitation, saying “Thank you, Thank you very much.”

Then he attempted a Larry the Cable Guy impression saying, “Get Er Done.”

The CEO exploded with laughter after each impression.

When he finished his introductions, Vinduska said he was as shrewd a businessperson as Ning when talking about his swine operation.

Vinduska came away from both meetings impressed with the Chinese CEOs. He thought either of them would have been successful in the U.S.

“They had to be survivors,” Vinduska said. “They had to work to grow to that point. You have to know the right people.”

The ambition of the Chinese will keep U.S. grain flowing into the country. One pork producer, who Vinduska did not get a chance to meet, is said to be creating a large enough operation to match the output of the entire United States.

“It’s unheard of,” Vinduska said. “He probably won’t get there but he’ll probably get close.”

Vinduska added that American farmers will be ready to provide them with grain and corn.

“The one thing the U.S. farmer has been good at is producing quality grain,” he said. “The grain has to go somewhere.”

Last modified Sept. 29, 2010

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