Agricultural startup Farmstaff announced on the 28th that it visited Chengdu, Sichuan Province, China and signed a LOI (Memorandum of Understanding) to strengthen strategic cooperation with Sichuan Zhongnong Yixiang Agricultural Science and Technology Co., Ltd. (hereinafter referred to as Zhongnong Yixiang). This agreement was held in the KOTRA Chengdu conference room with the support of KOTRA Chengdu Trade Center.
This LOI signing is a follow-up measure to convert the MOU signed between the two companies in March into a specific business phase, and focuses on laying the foundation for the establishment of a joint venture. The two companies plan to pursue collaboration centered on the smart farm project scheduled to be built in Zigong City, Sichuan Province.
The project will be carried out in the form of applying the premium tomato cultivation and operation technology accumulated by Farmstaff in Korea to the local system. To this end, practical discussions were held on technology transfer and implementation methods such as quality control standards and crop operation manuals.
This agreement also raised the possibility of a new business model that integrates leafy vegetable cultivation and distribution. Based on the vertical farming (VF) technology owned by Zhongnong Yixiang, the two companies are jointly developing an operational structure that closely links production and consumption, and are reviewing ways to provide high value-added agricultural products to Chinese consumers by utilizing the Korean brand experience.
During the business trip, the farm staff visited the distribution channels in the Chengdu area and investigated the tomato purchasing behavior, price range, and quality level of local consumers. In addition, they inspected the cultivation environment of nearby farms and used it as an opportunity to increase their understanding of the local agricultural structure. The survey will be used as basic data for the feasibility of future joint ventures and the establishment of local differentiation strategies.
In the future, the two companies plan to establish a joint venture to begin full-scale production and brand distribution of high-quality agricultural products based on smart farms. This joint venture will be established as a base that performs complex functions such as agricultural technology verification and development of urban agricultural consumption models, beyond simple cultivation facilities.
Kim Jeong-woo, CEO of Palmstaff, said, “Through this collaboration, we have laid the foundation for investing all-round capabilities in branding, distribution, and operations locally, beyond simple technology transfer,” and “Thanks to the practical support of KOTRA’s Chengdu Trade Center, we were able to quickly secure trust and execution capabilities between the two companies.”
KOTRA Chengdu Trade Center Director Byun Yong-seop evaluated, “Both companies each possess smart farm-related technology and business operation know-how, and this cooperation is likely to develop into a successful case of a Sino-Korean joint venture based on a mutually complementary structure.”
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