Deer industry to co-operate with Korean health-food giant
The New Zealand deer industry is today signing an agreement with one of Korea’s largest health food manufacturers, the
Korea Ginseng Corporation (KGC), to help it develop more products containing NZ velvet antler.
The non-binding memorandum of understanding, to be signed by Deer Industry New Zealand (DINZ) chief executive Dan Coup
and KGC chief executive officer Kim Jun-gi, will be witnessed by Prime Minister John Key. The signing will take place in
Seoul following the signing of the Korea New Zealand Free Trade Agreement.
“For seven years our relationship with KGC has strengthened and has increasingly focused on the development of branded
consumer products that include extracts from NZ velvet. In that time, KGC has developed a children’s tonic that has
become a household name in Korea, taking around 8 per cent of NZ’s velvet production,” said DINZ chief executive Dan
He says the understanding formalises the relationship between DINZ and KGC. Each party will work with the other in good
faith, recognising they will achieve more together than by working alone.
KGC will have access to research information held by DINZ and its research partners that is not subject to intellectual
property or legal restrictions. KGC will continue to use NZ velvet in some of its products and will continue to develop
new products that feature NZ velvet as a major ingredient.
“This is a true win-win and is a pointer to where we believe the future of the velvet industry lies – with close
relationships between New Zealand suppliers and partners in markets like Korea, Taiwan and China who are embedded in the
local culture and marketplace,” says Coup.
The origins of KGC date back to 1899 when it was a monopoly managed from the palace of the Korean monarch. KGC in its
current form was established in 1999 and it remains the market leader for sales of ginseng and other traditional health
food products. It has hundreds of ‘Cheong Kwan Jang’ stores in Korea and a growing sales network across Asia and in the
“We can take pride in the fact that New Zealand’s reputation for the quality of its velvet and velvet science has been
recognised by a company that has deep roots in Korean culture and history.
Through Provelco, KGC’s supplier, our farmers and processors have access to a highly reputable customer with strong
market presence. For its part KGC has access to the world’s best velvet – natural, safe and quality-assured – as well as
our velvet science.”
As part of the relationship with DINZ, KGC researchers are in regular contact with AgResearch’s lead velvet scientist,
Coup says KGC has a 35 per cent share of the Korean herbal/traditional products market.
“One of the reasons for KGC’s success has been its commitment to research and product development. The firm has around
100 PhD-level researchers and it channels more than 2 percent of its annual sales into research and development,” he
“KGC has played a major role in the development of the market for consumer-ready health tonics in South Korea … a market
segment that was virtually non-existent 10 years ago. The rapid growth of this segment has coincided with a decline in
the market for traditional tonics made in the home.
“It is a trend that plays to New Zealand’s strengths, because consumer products companies place great important on the
integrity of their raw materials. Respected Korean health food companies like KGC see us as the ideal source of velvet.”
Coup says KGC recently launched a new product using NZ velvet and Korean red ginseng extract as key ingredients. The
event, held at Coex Hyundai department store, included more than 100 of the store’s senior executives, special guests,
as well as 50 bloggers and media reporters. The launch strongly emphasised the NZ provenance of the velvet content.