Simplot learns where the bodies are buried - literally

Published: March 5, 2013 

China isn't the only foreign country where Simplot expects to grow. "Mexico is very important for our company," CEO Bill Whitacre says. "I could imagine it will literally grow by four or five (times) over the next decade."

Chris Butler — cbutler@idahostatesman.comBuy Photo

It's just one of the stories the agribusiness company encountered while building its export market in China.

Burial grounds. Always looking for the next big market.

Deciding to conduct business outside the country - Idaho exports totaled $6.1 billion in 2012 - carries risk and challenge.

Bill Whitacre, CEO of the J.R. Simplot Co., was one of several Boise business leaders who talked about conducting business internationally at a recent symposium by the Consortium for Undergraduate International Business Education at Boise State University.

Family-owned Simplot says it has $6 billion in annual revenues and employs 10,000 people. Here are highlights of Whitacre's remarks, edited for length and clarity.

SUCCESS IN PROCESSING POTATOES FOR McDONALD'S

"Years ago... [Simplot Co.] developed a vision for China, and they identified needs. We started by developing the raw potato base, making sure we had good quality potatoes, and moved that into a factory setting. In 1992 we decided to build a potato plant, and for all practical purposes those potatoes were going to go to McDonald's. In 1993, we took the first product out of the plant, and it has gone literally gangbusters ever since. "

COMING NEXT: A MEGAPLANT

"We had this rapidly growing opportunity in China. We know that we can produce potatoes. We know that McDonald's is going to continue to grow in China. But we know that we need to make sizeable investments to keep up with the growth. It's time for us to take the next step and build ... a megaplant that dwarfs the existing facility we currently have."

CHINESE MIDDLE CLASS WANTS GOOD STEAK

"We know that the Chinese have become very interested in a higher protein diet. As [their] middle class develops - and the middle class is larger than the whole population of the United States - that middle class has expectations for a really nice steak. So we have a portioned beef business that is growing very rapidly."

'DON'T WORRY' ABOUT THOSE ANCIENT GRAVES

Simplot worked toward collecting land-use rights to raise alfalfa and, eventually, corn in China to feed the nation's growing beef industry. But plans went awry.

"We thought we had the first farm done, and we found out we had an issue ... . The ancient burial grounds really had to do with 8,000 graves. They said, 'Oh, don't worry about it, we will just move them.' It didn't feel right to us. We didn't think it would feel right to the community.

"The funniest thing that happened to us ... wasn't the 8,000 graves. It had more to do with the fact that we asked them about starting to clear the land. ... They sent us a picture, and they were proud of the fact they were getting the land cleared. Well, the picture [showed] they cut off all these trees and left [stumps]. We didn't know how to farm that.

"The reality is, we did move onto another piece of land."

Bill Roberts: 377-6408, Twitter: @IDS_BillRoberts

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