---
title: "Uncovering the Inner Workings of Giants in China's Edible Oil Industry"
description: "This article explores the major players in China's edible oil industry, categorizing them into three groups: the 'Five Overlords' (COFCO, Sinograin, Yihai Kerry, Luhua, and Chinatex), the 'Four Foreign Powers' (ADM, Bunge, Cargill, DuPont), and 'Specialists' like Julong (palm oil), Jinhao (tea oil), Dingzhi (sesame oil), and Jiusan (private). It details the operations and market positions of these 'Specialists', highlighting their unique contributions and challenges."
author: "扑克投资家"
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published: "2015-10-23"
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# Uncovering the Inner Workings of Giants in China's Edible Oil Industry

> This article explores the major players in China's edible oil industry, categorizing them into three groups: the 'Five Overlords' (COFCO, Sinograin, Yihai Kerry, Luhua, and Chinatex), the 'Four Foreign Powers' (ADM, Bunge, Cargill, DuPont), and 'Specialists' like Julong (palm oil), Jinhao (tea oil), Dingzhi (sesame oil), and Jiusan (private). It details the operations and market positions of these 'Specialists', highlighting their unique contributions and challenges.

**Introduction:** Where there are people, there are rivalries; similarly, in the oil and fat sector, there are special factions that cannot be simply divided into domestic and foreign. After more than 20 years of integration and competition, some giants have gradually emerged with the power to influence the market. Additionally, there are many specialized enterprises that dominate their sub-sectors and cannot be underestimated. Based on influence, these giants are divided into three major groups:
1. The Five Overlords of Entity Enterprises: Sinograin, COFCO, Yihai Kerry, Luhua, and Chinatex
2. The Four Foreign Powers: ABCD (ADM, Bunge, Cargill, DuPont)
3. Specialists: Longwei (palm oil), Jinhao (tea oil), Dingzhi (sesame oil), Jiusan (private), etc.
In previous issues of our 'Grain and Oil' series, we have analyzed the 'Five Overlords' and 'Four Foreign Powers' in detail. (You can view them by replying with keywords '31, 28, 25, 22, 17, 8'.) Now, let's start examining the 'Specialists' one by one. Interested friends can leave us messages to discuss.

**This article is from: Tianya | Compiled by Poker Investor**

**Specialist One: Longwei**
Tianjin Julong Jia Hua Investment Group Co., Ltd. (referred to as Tianjin Julong Group) is a full-chain oil enterprise integrating oil crop planting, oil processing, port logistics, grain and oil trade, oil product R&D, branded packaged oil promotion, and financial services for the grain and oil industry. It is one of the earliest, largest, and most influential palm oil enterprises in China.
Julong Group is headquartered in Tianjin Port Free Trade Zone, the core area of Tianjin Binhai New Area. It has five member enterprises: Tianjin Longwei Grain and Oil Industry Co., Ltd., Tianjin Julong Grain and Oil Co., Ltd., Jingjiang Longwei Grain and Oil Industry Co., Ltd., Jingjiang Longwei Grain and Oil Port Co., Ltd., and PT. GRAHAINTIJAYA, located in Tianjin on the Bohai coast, Jingjiang in Jiangsu Province along the lower Yangtze River, and the Republic of Indonesia. The group focuses on palm oil production and marketing, committed to building a complete palm oil industry chain covering oil crop planting, oil processing, port logistics, grain and oil trade, oil product R&D, branded packaged oil promotion, and financial services. It is one of the earliest, largest, and most influential palm oil enterprises in China.
Julong Group is the domestic enterprise with the largest market share in China's palm oil trade. In 2011, its palm oil sales accounted for 16% of the market, with annual oil trading volume exceeding 1 million tons and total sales revenue exceeding 10 billion RMB. Importantly, to break the monopoly of international oil giants over the upstream sources of the oil industry, Julong Group built the first overseas palm plantation by a Chinese enterprise on Kalimantan Island, now covering nearly 100,000 hectares. In early 2011, it also built the first overseas palm oil mill by a Chinese enterprise, marking a significant step for Chinese companies entering the world's largest edible oil sector. Julong Group's outstanding contributions in international expansion have been recognized and affirmed by national leaders. (For a detailed article on Julong Group, reply with keyword '28'.)

**Subsidiaries:**
**North China Region**
Tianjin Longwei Grain and Oil Industry Co., Ltd.
Tianjin Julong Grain and Oil Co., Ltd.

**East China Region**
Jingjiang Longwei Grain and Oil Industry Co., Ltd.
Jingjiang Longwei Grain and Oil Port Co., Ltd.

**Indonesia Region**
PT. GRAHAINTIJAYA

**Industry Chain Involves:**
**Oil Crop Planting**
Built the first overseas palm plantation by a Chinese enterprise in Indonesia, with nearly 100,000 hectares of palm plantations. Also built the first overseas palm oil mill, marking Chinese enterprises' full entry into the palm oil sector, the world's largest edible oil industry.

**Oil Processing**
Operates the largest palm oil processing base in China at Tianjin Port Free Trade Zone;
Operates the largest million-ton edible oil processing base in East China in Jingjiang, Jiangsu Province;
Built the first overseas palm oil mill by a Chinese enterprise in early 2011;

**South China Production Base**
**Port Logistics**
Approved by the Ministry of Transport to use the Yangtze River shoreline, built a logistics park centered around a grain and oil terminal.

**Grain and Oil Trade**
Ranked first among domestic enterprises in palm oil trade market share for six consecutive years.

**Oil Product R&D**
Pioneered industrial-scale production of ultra-low melting point palm oil globally, with internationally leading fractionation technology.

**Branded Packaged Oil Promotion**
Tianjin Julong Group's Indonesian small-packaged palm oil 'OilKu';
First to introduce small-packaged palm oil to the market, filling a gap in the domestic edible oil market;
Owns the 'Holiday' brand packaged oil domestically;
Launched 'OilKu' small-packaged products in Indonesia.

Palm oil, also known as palm oil or palm peel oil, is extracted from the mesocarp of oil palm fruit and is a non-drying oil. Oil palm fruit is native to the west coast of Africa. In the 1970s, Southeast Asian countries began large-scale cultivation, and by the 1980s, the area and production of oil palm in Southeast Asia had surpassed Africa, with Malaysia accounting for over 50% of world production and Indonesia about 20%. In the 1920s, China introduced it from Malaysia to Hainan Island, and later it was planted in Taiwan, Yunnan, Guangxi, Fujian, Guangdong, and other provinces, but production was limited. Since the 1970s, palm oil has been the fastest-growing vegetable oil, becoming a major edible oil worldwide and holding an important position in the international vegetable oil market. Due to climate and other natural constraints, China's production developed slowly, and large-scale imports began in the late 1980s, accounting for over 15% of world palm oil trade volume.
Palm oil production was originally highest in Malaysia, but with the development of large tracts of land in Indonesia, production there has now surpassed Malaysia.
Many Chinese enterprises have plantations in Indonesia, such as Longwei and Yihai Kerry's parent company, Wilmar International.
Palm oil is the best frying oil. When we usually refer to palm oil, we generally mean 24-degree. The crude oil extracted from palm fruit is a mixture of oils with different melting points.
Through fractionation technology, it is processed into palm oil of different degrees, with different uses.
Generally, below 24 degrees is for direct consumption;
Between 24 and 33 degrees is for the food industry, such as instant noodles and snacks;
Above 33 degrees is generally used in the chemical industry.
Palm oil has a wide range of uses, including cooking oil, shortening, margarine, cocoa butter substitute, and puff pastry oil.
China is the largest importer and consumer of palm oil, with India second.

**Specialist Two: Dingzhi**
Sesame is an oilseed crop used for both food and oil. It prefers a dry climate, is edible itself, and has an oil content of up to 60%, with a minimum of over 45%.
Sesame is roughly divided into three types: white sesame, black sesame, and mixed colors (yellow-white, brown).
Sesame is widely cultivated in tropical and subtropical regions. China has the largest production and best quality. Other major producers include Myanmar, Bangladesh, neighboring India, and African countries like Ethiopia and Mozambique.
Although China's sesame production is the world's largest, the huge demand from foodies still makes it insufficient. Moreover, we love money, so it's inevitable to exchange good things for money.
Thus, the current situation is: the high-quality white and black sesame produced in our country are basically collected layer by layer, color-sorted, peeled, beautifully packaged, and exported to South Korea and Japan to earn foreign exchange. The remaining lower-quality ones are kept for oil extraction.
Where does the sesame used in domestic food industry come from? For example, for tangyuan and sesame paste, small enterprises lack the financial strength to compete with foreign companies for high-quality sesame sources. They have to settle for second best, but fortunately, neighboring countries have it. Myanmar's black sesame, Bangladesh's brown sesame, and India's oil sesame are the best supplements. So we import large quantities of sesame every year to meet domestic demand, bringing good news to foodies.
Sesame imports mainly go through customs at coastal and border points. African and Indian sesame mainly comes by sea, concentrated in major ports like Tianjin, Shanghai, and Guangzhou. Myanmar's sesame mainly goes through border trade, which is tariff-free, so many speculators engage in this. A few years ago, there was a crackdown, and many people were jailed; now it's somewhat more regulated.
The sesame used in the sesame oil industry is undoubtedly the worst in appearance, but it doesn't affect the oil quality. Therefore, the sesame screened out domestically and the poor-quality imported sesame are all used for oil extraction.
Sesame oil is a high-quality oil, especially loved by northerners, particularly for cold dishes.
In theory, to preserve the original aroma, sesame oil processing should not use the solvent extraction method; it should be stir-fried first and then pressed. Because sesame has high oil content, free fatty acids (commonly known as acid value) are difficult to control. The stupid standard committee actually set sesame oil standards based on other oil types. This gave high-quality enterprises an excuse to openly produce solvent-extracted sesame oil. The flavor of solvent-extracted sesame oil is inferior; how to compensate? Those with conscience might blend it with pressed oil, while those without conscience use flavorings.
The undisputed leader in the sesame oil circle is Dingzhi. Other good performers include Hunan Changkang, Wuhan Fudafang, and Qingdao Jiali, but they are far behind Dingzhi.
Founded in 1958 in Changhua, Taiwan, Dingxin Oil Factory is the predecessor of Ting Hsin Group. It entered the mainland market in 1989, and has been there for twenty years. During these twenty years, Ting Hsin people have adhered to the business philosophy of 'integrity, pragmatism, and innovation', growing steadily step by step, and have fortunately developed into today's food kingdom. Today's achievements of Ting Hsin not only reflect the hard work of every Ting Hsin employee but also symbolize the rapid growth of China's market after reform and opening up.
Since 2000, Ting Hsin Group's total investment in the mainland has exceeded 11 billion RMB, with over 70 companies, over 40 factories, and more than 30,000 employees. From 1996 to 2000, cumulative taxes paid were 2.3 billion RMB, and revenue in 2000 was 10 billion RMB. In terms of product performance: 'Master Kong' instant noodles produce 5 billion packs annually, making it the world's largest instant noodle producer; 'Master Kong' purified water, tea drinks, eight-treasure porridge, '3+2' sandwich cookies, and other related products also rank among the top in domestic similar products. Besides Master Kong, it also operates Western fast food 'Dicos' and Japanese fast food 'Yuleheshi', and expands in dairy and condiments under the Wei Chuan brand.
The Grain and Oil Business Group belongs to Ting Hsin International Group's Materials Business Group. In Taiwan, it has Cheng I Foods, Ting Hsin Oil, and Shun Sheng Industrial; in the mainland, it has Dingzhi Foods and Dingsheng Foods. Its main business is to provide oil products for the group's needs, and external sales cover the catering market and end-channel oil sales. The product line ranges from livestock feed to various oils (palm oil, lard, beef tallow, animal-vegetable blended oil, sesame oil, etc.), almost vertically integrating the grain and oil production process. In addition, the business scope extends from Taiwan to mainland provinces and even exports abroad, with Ting Hsin Group's grain and oil business group having a presence.
The mainland grain and oil business group started with the formal establishment of 'Dingzhi Foods Co., Ltd.' in Beijing in 1998. In 2002, it invested 70.3 million RMB to build Zhumadian Dingzhi Foods Co., Ltd., mainly engaged in sesame oil and deep-processing sesame trade. In stable development, to meet market demand and group development, in 2007 it invested 130 million RMB in Dongguan to establish Dongguan Dingzhi Foods Co., Ltd. In terms of production equipment, Dingzhi not only introduced Japan's fully automated oil extraction equipment but also conducted technical exchanges and cooperation with Japan's renowned sesame oil manufacturer Katoya. The annual sesame oil production exceeds 25,000 tons, making Dingzhi the world's largest professional sesame oil production factory, not only in China but globally.
**The above information is from Dingzhi's official website**
Dingzhi Foods Co., Ltd. is affiliated with Ting Hsin International Group. In 1998, it invested in a factory in Zhumadian, Henan Province, a sesame production area, dedicated to the development and research of related sesame products. In 2002, in response to group development and market demand, it invested 100 million RMB to build a new factory (covering 154 mu); and as the market continued to expand, in 2007 it invested in a factory in Dongguan, Guangdong Province (covering 110 mu), becoming the largest professional producer of sesame oil, peeled sesame, and refined sesame in China.
How powerful is Dingzhi? For example, it participated in the formulation of the national standard for sesame oil.
The solvent-extracted sesame oil mentioned earlier owes much to it. Second-grade sesame oil is purely physically pressed and water-washed, with good flavor but slightly lower indicators; first-grade sesame oil fully meets national standards, but it requires solvent extraction and chemical refining, losing all flavor.
Actually, sesame oil is not a main oil; it's not consumed daily, but when it is, it's for flavor. Why make it so complicated?

**Specialist Three: Jiusan**
Jiusan's predecessor was a state-owned farm in Northeast China, and it still has its own farms for growing soybeans.
Unfortunately, our soybean costs are very high, subsidies are low, and they don't reach farmers. This has led to a situation: prices are too high, sales are difficult, and the state often has to intervene to support prices; farmers have low returns and are unwilling to plant. This creates a vicious cycle, and gradually domestic soybeans have become a food-grade soybean, with prices far exceeding imported soybeans.
Jiusan held on for about 10 years, but finally couldn't bear it anymore. Later, it built a factory in Guangxi to process imported soybeans...
Jiusan should technically be considered a collective enterprise, but I listed it as private, which is a bit of a mismatch; let me correct that.
Between 2003 and 2004, domestic soybean crushing enterprises were hit hard by imported soybeans, and almost overnight, many went bankrupt or changed hands. Jiusan persisted, almost tragically holding on to Northeast soybeans. I remember a period when Jiusan Group's general manager, Tian Renli, almost daily criticized imported soybeans and foreign capital.
At that time, neither COFCO nor the ABCD foreign companies dared to respond. For such a last guardian of domestic soybeans, people were reluctant and dared not refute or challenge.
However, in 2006, Jiusan made a stunning transformation, building a super-large imported soybean crushing plant in Fangchenggang, Guangxi, causing an uproar. Jiusan's explanation was that the Northeast factory was struggling, and they needed to use profits from imported soybeans to offset losses from domestic soybeans, which seemed reasonable.
In 2012, Ray Allen, one of the NBA Celtics' Big Three, jumped to the Miami Heat and was criticized by almost everyone. Not only fans, but even Garnett and Pierce couldn't help but curse. For a time, Allen was seen as a traitor, a typical example of a 'three-surnamed slave'.
Unexpectedly, in 2013, Pierce and Garnett went to the Nets together. This gave James a chance to counterattack and avenge Allen. One might say Garnett and Pierce left because of the Celtics' rebuilding, forced to leave, while Allen left voluntarily; perhaps that's the difference.
But the result is the same; who doesn't have reasons?
Everything has its internal factors. There's a sentimental saying among lovers: 'If you don't leave me, I will be with you in life and death.' But life is very realistic, sometimes even cruel; who can predict? When someone who constantly says they won't leave suddenly departs, the one who should reflect most is oneself. Who can guarantee they can be with you in life and death? Some words are not casually spoken; perhaps people are used to hearing nice words, but tolerance is the best choice.
Why could Jiusan hold on to Northeast soybeans initially? Because it had its own farms and started earlier than others. I remember in the 1990s, southern oil mills suffered when purchasing soybeans in the Northeast; they had to humble themselves to find sellers and beg the railway for plans. No matter how hard, as long as the soybeans arrived in the south, they could make big money.
Fortune changes; imported soybeans broke this situation and forced Jiusan to participate in imported soybean crushing. Saying it used coastal profits to offset Northeast losses is actually a beautiful excuse. If imported soybeans have problems, who would buy the soybean oil processed by coastal factories? Are only Northeast and Beijing Chinese, and not the people in the southern coastal areas?
I've digressed; I'm not criticizing Jiusan, because Jiusan deserves respect. Let's be more tolerant and understanding. I think if anyone could find a way to solve oil demand without changing existing farmland use, the state would probably give them a ton-weight gold medal. If there were a choice, the state would definitely choose the more beneficial option.

**Specialist Four: Jinhao Tea Oil**
Tea oil is extracted from the seeds of the camellia tree and is a woody vegetable oil.
The camellia tree, also known as the oil tea tree, is different from the tea plant commonly referred to. It is widely distributed in China, almost all subtropical areas south of the Qinling-Huaihe line. Famous ones include large-scale cultivation in hilly areas of Guangxi, Hunan, Jiangxi, and Hubei provinces.
The oil content of oil tea seeds is generally 25-35%. The extracted oil tea seed oil mainly contains unsaturated fatty acids like oleic acid and linoleic acid. Its fatty acid content and ratio are very similar to olive oil, earning it the title 'Oriental Olive Oil'. Some nutritional indicators are even higher than olive oil. The reason it was less famous and valuable than olive oil in the past boils down to two factors:
1. Domestic tea oil technology needs improvement;
2. Blind following by Chinese people.
Currently, there are about 50 million mu of oil tea trees in China, with an annual production of about 1 million tons of oil tea seeds and about 250,000 tons of tea oil. This number is increasing as domestic understanding of tea oil's nutritional value deepens and as large tracts of barren hills are developed into tea gardens.
A tea tree can live for over 100 years, and after a seedling period of about 6-10 years without bearing fruit, it can be harvested for nearly a century. Therefore, investing in tea trees has become a very popular choice.
Tea oil has a history of 2,000 years in China, so the extraction technology has been passed down for a long time. However, large-scale production is just beginning, and most is still workshop-style.
Many friends probably already know the pressing process of tea oil, so I won't go into detail.
In short, after the scattered oil tea fruits are pressed in various workshops, where do the remaining tea cakes go? Many people don't care; usually someone comes to buy them, but in fact, most eventually end up in the solvent extraction workshops of large tea oil factories.
As the leading enterprise in the tea oil industry, Jinhao's position is very prominent.
In 1993, the Liu family established Jinhao Tea Oil in Qiyang, Hunan, officially entering the tea oil industry.
Let me be lazy and copy its own introduction:
Hunan Jinhao Tea Oil Co., Ltd. is a modern private enterprise integrating scientific research, planting, production, and sales of high-grade edible vegetable oils from tea seeds. It has a registered capital of 78 million RMB, total assets of 511 million RMB, and an annual output value of 1.1 billion RMB. The company has 1,180 employees, including 158 middle and senior management and technical personnel. Jinhao Tea Oil pioneered China's tea oil industry and is renowned for its 100% natural and nutritious products, becoming an international benchmark in the tea oil industry. Now, it will continue to carry the banner of China's tea oil industry and strive to promote the establishment of national quality standards for the tea oil industry.
Hunan Jinhao Tea Oil Co., Ltd. is a modern private enterprise integrating scientific research, planting, production, and sales of high-grade edible vegetable oils from tea seeds. The company has a registered capital of 150 million RMB, total assets of 750 million RMB, 600 employees, and an annual output value exceeding 1.1 billion RMB.
Since its establishment in 1993, the company has been based on Hunan's rich oil tea resources, adhering to the 'company + base + farmers' agricultural industrialization development path. It has built five production factories in Qiyang, Yiyang, Hengyang, Changde, and Pingxiang, Jiangxi Province, directly or indirectly driving nearly 20 million farmers to increase income and become prosperous. The company has been rated as 'National Economic Forest Industrialization Leading Enterprise', 'National Agricultural Industrialization Key Leading Enterprise', and 'Hunan Province Food Industry 100 Billion Industry Outstanding Contribution Enterprise'.
The company currently has advanced automated production lines for pre-pressing, solvent extraction, refining, and filling, equipped with complete precision experimental, testing, and inspection equipment. It has introduced internationally advanced oil refining and tea oil product development technology. The company's main product, 'Jinhao Tea Oil' series of high-grade edible vegetable oils, has been awarded 'China Famous Trademark', 'Green Food', 'Organic Food', 'Safe Grain and Oil', and 'National Famous Brand of Oil Tea Seed Oil', and is favored by consumers in large and medium cities and developed coastal areas. Tea oil production and sales rank first in the country.
The company has established sales branches in Hunan, Hubei, Beijing, Shanghai, Guangdong, and Jiangxi, and marketing offices in Guangxi, Fujian, Shandong, Zhejiang, Jiangsu, Hainan, Henan, and Shenzhen. It has established a multi-level intensive distribution network consisting of distributors, chain stores, KA stores, BC stores, and group purchase sales teams, forming a marketing layout with 'Hunan as the base, Beijing-Guangzhou line as the axis, Beijing-Shanghai as the strategic high ground, radiating to surrounding cities, and driving the national market'.
In 2005, Jinhao acquired Hunan Yiyang Youzhongwang Oil Factory, mainly producing blended oil;
In 2011, Jinhao built a new factory in Hengyang.
In 2009, the uproar over Jinhao Tea Oil's excessive carcinogen benzo(a)pyrene shook the country. For details, interested friends can search for 'Jinhao carcinogenic'.
Eventually, the storm subsided, and with the efforts of the NPC deputy chairman, understanding was reached, and Jinhao began a new round of expansion.
The specific reason lies in the tea cake solvent extraction process.

**-END-**

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