In 1961 Peter was offered a transfer to the Auckland office with the brief to make a profit and develop the Far East. Peter, his wife Val, and 4 kids moved to Auckland. Two more children including the baby of the family Andy (current Director) would arrive later.
Peter’s first trip to the Far East was a 3-month trip from April 1962. In May 1962 while in Japan, Peter met a group of Australians’ including Reg Urquhart (of R D Urquart a household textile importer) and Mark Voyage (of A G Voyage) who had recently attended the Canton fair in China.
From this meeting a great friendship developed with Reg Urquhart. Peter subsequently received many names of contacts in China and correspondence was started directly with the China National Native Produce Import and Export Corporation, Shanghai Arts and Crafts Branch. Some Business resulted in tea towels and during 1961 and 1962 this grew and expanded to a 2nd Branch in China – China National Native Produce Import and Export Corporation, Peking Arts and Crafts Branch.
Late in the 1950’s others were also getting starts in China. Ron Howell was also establishing connections in China and was selling New Zealand Wool with some success. The Chinese however at that stage did not have too much in the way of foreign cash reserves and were looking to promote exports sales.
Ron Howell has a Son DAVid. Take the first 3 letters of David’s name, and reverse them you have the start of the name of Ron’s Company VADco Traders Ltd.
In early 1963 Ron held discussions in China where he was pressured to start reciprocal trade with China by purchasing product from China as well as selling wool. The result of this discussion resulted in Vadco Traders securing a sole agency from China National Native Produce Import and Export Corporation.
William McDonald & Co. subsequently received letters to this effect from both China National Native Produce Import and Export Corporation and Vadco Traders.
Unfortunately, Ron did not know much about textiles and could see his aspirations to develop the Chinese potential not growing. At this stage Ron approached the companies which had been trading Chinese textiles in NZ and offered them sub agencies to on sell textiles on behalf of Vadco Traders with a split commission arrangement. Most companies decided not to do anything and wait for the agency to falter. William McDonald & Co. however took a different view and looked at the potential of China as an opportunity to have a point of difference from the many other textiles agencies. William McDonald & Co. started a dialogue, which lead to an agreement to sell on behalf of Vadco Traders and split the commission 3% WMD / 2%VT. William McDonald & Co. was corresponding directly with China and Vadco Traders were copied on all correspondence.
The situation was now relatively stable with business growing, but from the Chinese point of view it looked messy. Further discussions took place between William McDonald & Co. and Vadco Traders and a new company McDonald Vadco Ltd was created solely for the promotion and sale of goods from the People’s Republic of China.
Peter McClune was appointed General Manager and the business was established in Auckland where more and more of the textile businesses were locating their buying offices.
And so, the journey begins
Peter oversaw Sales, and Ron oversaw the office.
Ron Howell was a difficult man to work alongside. He was a strong Methodist with temperate views, an Accountant, a socialist during a period in history where this could be difficult. However, he was very well organized. The filing system developed by Ron Howell for McDonald Vadco right at the start was so good that 30 years later it was used as the basis for Bounty (the in-house computer system.)
In the early years Peter was assisted by his right-hand man Alan Moyes. Alan did not travel and if my memory is correct did not drink Lion Red (he was a DB man.) McDonald Vadco was based in Elliot Street.
The Book Keeper was Dom Keys, the Office Manager Bert Rhodes, and a couple of smart Salesmen in Warren Hodge and Ron Kay.
Peter started regular travel to China. With no diplomatic relations in NZ it was necessary to travel to Hong Kong and apply for a Visa. (Today we could do this in 24 hours.) Then; Auckland – Sydney – Darwin – Manila – Hong Kong (Buggered) Recovery in Hong Kong required at least a week while waiting for a Visa to China and then it was a full day trip to cross the only entry point into China at Lowe and travel to Canton. Your passport was taken from you during your stay in China and only returned on your departure once the train had departed Canton for Lowu. Travel permits were required for travel between cities in China and many cities were off limits for foreigners.
To fly from Canton (Guangzhou) to Shanghai was an effort. Canton – Changsha – Wuhan – Hangzhou – Shanghai was about 8 hours on a good day and 3 days on a bad run. Flights were infrequent and best avoided if possible. The train was the best method of transport as it is today although there were some seriously slow trips;
- Shanghai to Peking as it was then 14 hours.
- Shanghai to Tsingtao (Qingdao) 25 Hours.
Serious eating was also required. It was not unusual for 3 banquets in a day (breakfast, lunch and dinner.) Our Chinese hosts were always with us, with one host travelling with Peter to the next city to deliver him to the next host. Serious discussions always occurred. Invariably it was the perennial problem of late delivery, never price problems and rarely quality problems.
Most of the time, it was only possible for 2 meetings each day. The morning meeting would start at 9.00am with political speeches extolling the virtues of China and the Party which might end at 10.30am followed by a brief discussion concerning textiles and NZ. At 11 am it would be off to Lunch for a 10 – 12 course banquets, then back to the Hotel for a short rest before heading off to the next appointment in the afternoon at 2 pm. Another reinforcement of the virtues of the local systems was again followed by a brief discussion on Silk fabric for NZ. At 4.30 the meeting would finish, and Peter would be off for the evening meal. This would be another 10 – 12 course meals hosted by the Manager of the afternoon appointment. (Is it any wonder Peter took a liking to smoking and drinking, as they were an excuse to stop eating!)
These meals were hugely important as it was where the real business took place. Relationships were formed, and problems were raised. Generally, at each meal there would be Peter, The Boss of the Corporation, the Head of the Department hosting the meeting, the day to day Businessman, the Interpreter, the Party Boss, the Driver and somebody the boss would be trying to impress like the local customs man or banker (wheels within wheels.)
McDonald Vadco had used the slogan “solely dealing with products from the People’s Republic of China” to great effect and had secured sole agencies for;
- China National Textiles Import Export Corporation (Chinantec)
- China National Art and Crafts import export corporation (Artex)
- China National Chemical Import Export Corporation (Some products)
Each of these corporations had a head office in Beijing and branches in Shanghai, Nanjing, Hangzhou, Tianjin, Dalian, Guangzhou, Qingdao and a few other cities.
It was a top down structure with all decisions concerning price and allocation being made in Beijing, with provincial and city structures below following head office directives to supply.
Peter’s management of these initial relationships through extremely difficult times in the early years cannot be underestimated. Trading in China during the “cultural revolution” was not an easy task and I suspect one which very few traders in the world experienced.
At this stage McDonald Vadco in the late 1960’s was doing a lot of business in Australia. Offices had been opened in Sydney and Ron Kay was the 1st Sydney Manager. Business was difficult however and the office was shut 2 years later.
Around about 1968 the New Zealand Market also started to change. Import licences on many categories of product had consolidated into the hands of a few Companies. Now, selling product not only required good relations with suppliers, but also good relations with import licence holders.
To secure the long-term future of McDonald Vadco, Peter McClune started discussions with Wales and Mackinlay with a view to bringing then on as shareholders. This resulted in new shareholding being a third each (William McDonald & Co. / Wales and Mackinlay / Vadco Traders)
The effect of this arrangement enabled stable sales and ongoing growth