Chesco beer in China? Phila region’s business ties with Chinese mushroom

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The Chinese might soon be sipping beer brewed in Chester County, while people in the Anhui province learn the art of cultivating a signature Chester County product – the mushroom.

Sprouting from years of building relationships between the regions, county and Chinese interests are consummating business deals. Meanwhile, the City of Philadelphia also is working to deepen its own relationship with the Chinese.

This month, county, city and state officials plan to travel to China to promote partnerships with an eye toward establishing a formal presence in one of the world’s most-fertile markets.

Harold T. Epps, director of Philadelphia’s Department of Commerce, has said the region must explore opportunities abroad to stay competitive, especially since more than 95 percent of consumers live outside the United States.

Pennsylvania exports $1.5 billion in goods to China each year, according to the commerce department, and 39 Chinese companies employ roughly 1,000 Pennsylvanians, the department said.

James Chan, a consultant and founder of Asia Marketing and Management, an independent consulting firm, said he has noticed a “significant interest in American companies wanting to export to China or to attract investment from China.”

“No matter which way politics turn, the underlying feeling is China has money,” said Chan, who has been advising U.S. firms in marketing American-made products to Asia for more than 35 years.

The United States’ share of the global economy has been decreasing and the international market is increasing, giving U.S. companies more incentive to export their products, Chan said.

Philadelphia’s commerce department is sending two employees to China on May 23 to investigate opportunities for trade in the six cities they plan to visit. A trip to South Korea will follow.

The state’s Office of International Business Development has set up more than 15 meetings with Chinese companies to persuade them to invest in Pennsylvania. The delegation from Chester County leaves for China next week.

Three years ago, county officials signed a friendship agreement with the mayor of Yongchuan District in Chongqing, China, hoping it would stimulate job creation, student exchanges, trade partnerships, and tourism. The relationship is starting to bear fruit as several businesses in the county have identified potential partners in China.

Susan Hamley, Chester County’s head of tourism, said she plans to rave about the “countryside of Philadelphia” in Chester and Montgomery Counties to 30 representatives of China’s tourism and trade industries. In five years or so, she expects most of Chester County’s foreign tourists will come from China.

“We’re after very definitive successes,” said Michael Grigalonis, chief operating officer and executive vice president of the Chester County Economic Development Council and one of several officials and business leaders who will be traveling to China next week.

In the fall, construction is scheduled to start on a new mushroom growing facility in the Anhui province, about 260 miles outside Shanghai. Chris Alonzo, president of Pietro Industries in Kennett Square, is a partner in the project and is teaching Chinese businesspeople how to design the facility and how to meet food safety standards to grow fresh mushrooms for Chinese consumers.

“They said, ‘There’s a need for this in China and rather than trying to do it on our own, let’s ask for some help from people who know it,'” said Alonzo, who said he hopes to bring to the project U.S. equipment manufacturers, laboratories and other ancillary businesses.

His farm produces about 4 percent of the 595 million pounds of mushrooms Pennsylvania farms produced in last year’s crop. Pennsylvania is the nation’s No. 1 mushroom grower.

Alonzo said the businesspeople he is working with have plans to sell their fresh mushrooms only domestically. However, James Chan of Asia Marketing and Management warned the relationship might have a negative side-effect: Chinese businesses might eventually try to sell to Americans, which could cut into U.S. farms’ profits.

Alonzo’s farm in Kennett Square has been a destination for delegations of Chinese businesspeople, who have also toured Longwood Gardens and West Chester University.

As soon as October, Chinese customers could be drinking beer from Levante Brewing Co. in West Chester, which also offers its beer in bars and restaurants in Center City and Bucks, Chester, Delaware and Montgomery Counties. Michael DeThomas, an investor in Levante, plans to travel to China next week to tour facilities in China and continue negotiations with Eternity International Trading Co. The importer is particularly interested in distributing Levante’s “Cloudy and Cumbersome” New England-style IPA.

The Chester County Economic Development Council fostered the connection.

“We’re not Victory. We’re not a huge mico-brewing company,” DeThomas said. “(Eternity) had never looked at us. And then they did.”

At least two other craft breweries also are looking into selling beer in China.

DeThomas and the rest of the Chester County delegation leave for China on Tuesday and return May 27. County Commissioner Terence Farrell, who signed the friendship agreement with the mayor of Yongchuan District three years ago, said establishing an office in Yangzhou, a city in China’s Jiangsu province, to represent greater Philadelphia is the next step.

“We need to put together an infrastructure to follow up from this trip,” he said. “We really want to sell Chester County again and again and again.”

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