TCM grower takes a greener approach

With traditional Chinese medicine experiencing a revival, herbal flowers have become hot commodities on the market.

A particular plant, known as dendrobium officinale, is believed to have cancer-fighting powers and is gaining in popularity among consumers in China, Southeast Asia, South Korea and Japan. Commonly grown in greenhouses, the plant is a daily ingredient at dinner tables in Guangdong province.

One businessman, however, is finding success in producing the plant by eschewing commonly used methods. Rather than using greenhouses, Yang Shaowen is utilizing the natural habitat of longan forests near Zhangzhou, Fujian province, to grow the precious plant.

Yang is president of Zhangpu Yankee Biotech Co, a company that specializes in growing herbal flowers, including the dendrobium officinale. Born in Zhangzhou, Yang has been working in the TCM industry for more than 20 years.

Over the past three years, the wholesale price for dendrobium officinale has soared from 800 yuan ($128; 96 euros) per kilogram to 1,200 yuan. With more and more home cooks using the plant in soups and porridges and as a medicine to treat the flu, the price is climbing.

Yang is not the first to grow the herb on a large scale. In recent years, Fujian's neighboring province of Zhejiang has used greenhouses to grow it. Zhejiang is now a major base for cultivating and processing herbs in China.

In its natural environment, dendrobium officinale grows on rotting leaves and moss; if grown in soil, their roots are easily affected by bacteria. Replicating this delicate environment in a greenhouse costs millions of yuan.

But Yang has a big advantage in Zhangzhou. The average temperature here is higher compared to Zhejiang and its winters are less harsh. The city's other distinct advantage is its thick longan forests, 35 hectares of which Yang has turned into his farm to cultivate 100,000 sprouts annually.

In his natural farm, he mixes pine sawdust with soil and places the sprouts in a basket. He then hangs the baskets on branches, where the lush leaves shade the plants from sunlight. Tiered in layers of branches, this method saves space as compared to conventional flat greenhouses.

Under these conditions, a tree can generate an annual output of 30,000 yuan and every hectare of longan forest can yield plants with a total value of 4.5 million yuan, Yang says.

"By using the forest, we can save from investing on expensive equipment. We can also roll out this business pattern to the local farmers."

Yang says a listed company in Hong Kong has been negotiating with him to invest in another 30 hectares of what he calls "forest plantation".

Yang says one issue is that the supply of dendrobium officinale isn't meeting market demand, so he is telling local farmers to grow the plant under their own longan trees with the promise that he will buy their mature plants at a decent price.

He says health products made with dendrobium officinale are already popular in major cities. In five-star hotels in Fujian province, a cup of tea made from the plant's flower charges for 168 yuan.

With popularity high, he says many plantations have begun to grow the herbs using his method. "We have to be efficient because many places have turned eyes to these plants," Yang says.

To make their products more competitive, Yang is extending its industry chain to product processing and development. "Compared with our competitors in Zhejiang province, we lag behind in processing and marketing."

Yan Jianhong, deputy general manager of Zhangpu Yankee Biotech, says they are exploring the medicinal value of the herbal plants by working with pharmaceutical companies.

"In the next two to three years, we will focus on health food development," Yang says. "But in the long term, we plan to develop new medicines. By extending the industry chain, we gain a better position in the competition landscape so our company can escape the low-level price competition."