Overseas farmland investment for sustainable food systems: a systems analysis of long-term sustainability mechanisms of Chinese cross-border agribusiness

1 Introduction

With continued population growth, intensified climate change, frequent geopolitical conflicts, and increasing uncertainty in international agricultural commodity markets, global food security continues to face major challenges (Galanakis, 2024; Tariq and Willis, 2024). Dependence on food imports and international markets can expose countries to supply instability; across Belt and Road Initiative (BRI) economies, food imports are associated with economic development, population size, arable-land endowments, infrastructure, tariffs, and international food prices (Wang and Sarkar, 2022). In this context, overseas farmland investment (OFI) has become an important means for countries and enterprises to diversify agricultural sourcing, expand food supply channels, and participate in cross-border production and trade (Chen and Guo, 2017; Tortajada and Zhang, 2021). Its contribution to food security, however, depends not only on land acquisition but also on governance, local impacts, and the organization of production, processing, logistics, and markets (DuBois, 2023; Lin, 2017).

Food security remains a central national strategic objective for China. Its large population, limited arable land, and rising agricultural production costs create continuing pressures. In response, China has strengthened international agricultural cooperation through its Going Global strategy and the Belt and Road Initiative (BRI). These policies encourage agribusiness enterprises to invest overseas, establish grain-production bases abroad, develop cross-border agricultural supply chains, and facilitate the allocation of agricultural resources across countries (Gooch and Gale, 2015; Tortajada and Zhang, 2021). As more Chinese agribusiness enterprises participate in OFI, their strategies have gradually shifted from resource acquisition alone toward value-chain integration and international operations. This shift also reflects the westward extension of China's food-security strategy and deepening agricultural cooperation under the BRI (Zhang, 2019). Enterprises consequently play an increasingly important role in national food security, international agricultural cooperation, and regional economic development (Tortajada and Zhang, 2021).

Access to agricultural resources, however, does not in itself enable an enterprise to sustain its operations. Cross-border investors must navigate differences in host-country legal, market, and cultural conditions while connecting cultivation, procurement, processing, storage, and sales. A breakdown in any of these connections can prevent resource access from translating into reliable product supplies and market returns. The central challenge is therefore to maintain cooperative relationships and adjust operational linkages as external conditions change, while meeting economic, social, and environmental requirements. Capabilities for stable, long-term operations depend on institutional adaptation, organizational management, and supply-chain coordination as well as resource possession. Understanding how these capabilities develop helps explain the mechanisms through which OFI enterprises sustain their operations.

Against this background, this study focuses on sustainable enterprise operations in OFI. The unit of analysis is Aiju's investment in Kazakhstan and the associated cross-border operating network linking Kazakhstan, Alashankou, and Xi'an. Operational sustainability refers here to the ability of an enterprise to maintain business operations and make adaptive adjustments as external conditions change. It is examined primarily through operational continuity, process efficiency, and capability formation, rather than a comprehensive assessment of economic, social, and ecological performance. The research question is: How do institutional conditions, organizational capabilities, production arrangements, and supply-chain coordination jointly support continued enterprise operations in the context of local producer participation and cross-border institutional constraints? The study develops a systems-based analytical framework and uses corporate materials and public reports to examine operational continuity through procurement arrangements, processing and distribution linkages, and continuing business activities. It analyzes the roles of contract farming, technical cooperation, and value-chain coordination, with attention to how host-country institutions and local producer participation shape investment and operating arrangements. By connecting agricultural resource access with the formation of enterprise capabilities, the study explains interactions among institutions, organizations, production, and supply chains in OFI. It provides case-based insights into sustainable enterprise operations and practical guidance for agribusiness investment and cross-border management, international agricultural cooperation, and financial institutions' assessment of investment risks.

2 Literature review and analytical framework

2.1 Overseas farmland investment and enterprise sustainability

Overseas farmland investment (OFI) has become an important topic in research on global food security, agricultural resource allocation, and international agricultural cooperation (Zhao and Chen, 2023). Population growth, rising food demand, and constraints on arable land encourage countries to use OFI to diversify food supply sources and improve the global allocation of agricultural resources, thereby strengthening food security (Lu et al., 2020).

Existing studies generally identify food-security concerns as a principal driver of OFI. Land constraints, volatility in international agricultural commodity markets, energy-security concerns, and the restructuring of global agricultural value chains also encourage cross-border agricultural investment (Gooch and Gale, 2015). Recent spatial analysis of Chinese OFI projects identifies geoeconomic conditions, resource endowments, geocultural ties, and geopolitics as influences on project location (Wang et al., 2025b). As OFI expands, research attention has gradually shifted from investment drivers to investment impacts. Many studies suggest that OFI can support agricultural infrastructure, technology diffusion, rural employment, and agricultural modernization, creating opportunities for host-country agricultural development (Bräutigam and Zhang, 2013; Zhan et al., 2015). Large-scale land investment can also generate land-rights conflicts and environmental pressures (Daniel, 2011). Country-level research assesses the political, economic, social, agricultural-management, and bilateral-relations risks facing Chinese agricultural investment (Wang et al., 2025a). These issues highlight the importance of responsible investment, environmental protection, and stakeholder coordination, which are central concerns in research on transnational farmland acquisition (Lin, 2017).

As OFI shifts from resource acquisition toward the development of global agricultural value chains, enterprises have become the principal actors implementing cross-border projects (Böhme, 2021; Lin, 2023). Research on agricultural development capabilities also connects economic performance with broader social and environmental factors (Li et al., 2019). Enterprise development is shaped by external conditions, including host-country institutions, resource endowments, production and market conditions, policy support, and international cooperation (Tian and Yang, 2019; Tian et al., 2020; Wang et al., 2021), as well as internal capabilities in organizational governance, international business, resource integration, and cross-cultural management (Meyer et al., 2009; Ge and Wang, 2013). Supply-chain coordination translates enterprise capabilities into specific operating arrangements by linking procurement, production, and delivery. Matching procurement volumes to processing capacity, and aligning inventories and transport with production schedules and market demand, helps enterprises make timely adjustments to changing external conditions and reduces the risks of supply–demand mismatches and operational disruption. Supply-chain coordination is therefore an important mechanism for improving resource allocation and strengthening operational resilience (Rana et al., 2026).

2.2 A systems perspective on enterprise sustainability

Systems theory views a system as a set of interconnected and interacting elements. Overall performance arises from their dynamic coupling rather than from their simple aggregation (Kitto, 2014). Systems perspectives have increasingly been applied to agricultural resource management, agroecosystems, and agricultural supply chains. Existing research conceptualizes agricultural systems as open systems comprising resources, institutions, markets, technologies, and stakeholders. Their continuing interactions and feedback influence agricultural stability and sustainability (Hornidge et al., 2015; Jia et al., 2016).

Management research conceptualizes enterprises as open systems that interact continuously with their external environment, with organizational forms and business activities evolving through resource allocation and environmental interaction (Rice, 2013). International business research further examines the alignment between internal enterprise resources and host-country institutions to explain strategic choices and modes of operation (Meyer et al., 2009). Agricultural supply-chain research extends this analysis to connections among production, processing, logistics, and markets, examining how coordination across activities influences enterprise performance and agricultural-system resilience (Dong, 2021; Wu and Haasis, 2018). By focusing on relationships between enterprises and their environments and among operating activities, these studies provide a basis for analyzing how institutional conditions and organizational capabilities jointly support cross-border agricultural operations.

2.3 Research gaps

Existing research provides an important foundation for understanding OFI through land governance, benefit distribution, enterprise activities, and value-chain relationships. Further explanation is needed of how enterprises organize local cultivation, processing capacity, and cross-border markets into an operating network that can be sustained after resource access is secured. Land rights and contractual procurement entail distinct relationships: even where producers retain their land, quality requirements, procurement commitments, and market channels shape responsibilities and bargaining relations. Moreover, the effects of institutional support, organizational resources, and infrastructure depend on how these elements are connected in actual operations. An analysis that combines rights and responsibilities among actors with interdependencies across operating stages can therefore clarify how coordination arrangements emerge and the conditions under which they function.

To address these issues, this study develops a systems-based framework comprising four subsystems: institutions and the external environment, organizational governance and capabilities, sustainable production, and supply chains and markets. Using Aiju’s cross-border operations as a case, it connects specific events in contractual procurement, technical cooperation, production, and shipment to examine actors’ roles, operational obstacles, and responses. The analysis then identifies the organizational conditions supporting sustained operations.

2.4 Analytical framework

This literature indicates that sustainable enterprise operations in OFI involve institutional environments, organizational capabilities, production activities, and supply-chain relationships. The systems perspective emphasizes interconnections among elements, providing a theoretical basis for integrating these operating components within a common analytical framework (Von Bertalanffy, 1950; Rice, 2013; Biazzo, 2002). It also facilitates examination of relationships among internal coordination, interaction with the external environment, and operational feedback (Drack and Apfalter, 2007; Virapongse et al., 2016). Focusing on sustainable enterprise operations in OFI, this study develops an analytical framework comprising four subsystems: institutions and the external environment, organizational governance and capabilities, sustainable production, and supply chains and markets. Figure 1 summarizes the subsystems and their main connections.

The four subsystems capture interconnected aspects of enterprise operations. Institutions and the external environment encompass the rules, policy relationships, and local conditions affecting resource access and business activities. Organizational governance and capabilities concern enterprise management, partnerships, and the allocation of knowledge resources. Sustainable production addresses the organization of cultivation, quality requirements, technical cooperation, and responsible-production objectives, with particular attention to how these arrangements support continuing production and its alignment with procurement needs. Supply chains and markets encompass procurement, processing, storage, transport, and sales. Institutional conditions and organizational capabilities jointly shape the coordination of production and market activities, while feedback from operating practices informs subsequent decisions and adjustments (Turner et al., 2017).

The four subsystems are analytical categories for different relationships within a cross-border operating network, not four functional departments within an enterprise. Institutional arrangements primarily concern interstate rules and their local implementation; business organization reflects cooperation among the enterprise, farmers, technical partners, and transport service providers; and production activities are carried out through specific jobs and operational tasks. Systems analysis therefore needs to distinguish coordination at different levels. Internal management relies primarily on operating procedures and the division of responsibilities, whereas cooperation with external actors depends more heavily on contract fulfillment, information exchange, and negotiation. Market demand and actual operating records provide continuing feedback on business conditions and inform adjustments. The analysis thus considers both horizontal relationships among actors and their adaptation to changing operating conditions.

Within this framework, the study proposes three complementary pathways: risk absorption, capability reconfiguration, and value creation. The four subsystems describe the basic structure of enterprise operations, whereas the three pathways explain how interactions among subsystems support continued operations. These pathways can operate simultaneously through contractual arrangements, technical cooperation, and linkages between production and markets. Figure 1 presents the analytical boundary, main connections, and feedback relationships. Section 5.5 uses the case materials to further explain the connections between each pathway and the relevant subsystems and their specific roles.

3 Research design and case methods

3.1 Case selection

This study adopts a single-case design and purposively selects the investment of Xi'an Aiju Grain and Oil Industry Group (hereafter Aiju) in Kazakhstan. The case is analytically valuable because its cross-border operating processes are relatively observable. Drawing on established processing capacity and market channels, Aiju connects local cultivation through contractual procurement and links production coordination, processing, storage, logistics, and sales into a relatively complete cross-border operating network. This structure allows the process through which agricultural resources are accessed, organized, and incorporated into processing and market systems to be examined within one case. It also provides a concrete setting for analyzing how agricultural resources are translated into operating capabilities. The project is embedded in multiple institutional and organizational conditions, including host-country regulation, local producer participation, local partnerships, technical support, and cross-border product flows. It thus offers substantial insight into interactions among the external institutional environment, organizational capabilities, and specific operating arrangements. Corporate reports, written interview records, and publicly available materials from China and Kazakhstan provide a basis for tracing project development, identifying key operating events, and cross-referencing information from different sources.

The explanatory value of the case lies primarily in close observation of linkages among operating stages and the processes through which they are adjusted. Aiju is a cross-border agribusiness that uses established processing capacity and market channels to support overseas procurement. The findings therefore apply principally to enterprises with comparable resource bases, value-chain conditions, and cross-border operating characteristics. To reduce the selection bias that could arise from examining a project that has remained in operation, the analysis includes obstacles to land leasing, export barriers, transport delays, and postponed expansion alongside relatively smooth linkages among contractual procurement, processing, and logistics. These events reveal how constraints can arise at other stages even when raw materials and facilities are available. The analysis also places existing downstream assets, policy support, cooperative networks, and organizational arrangements within a common explanatory framework to identify the conditions and relationships underpinning operational continuity. The study thus seeks to identify coordination mechanisms and their conditions of applicability, using analytical generalization to consider their explanatory relevance in comparable operating settings while carefully delimiting their extension to other enterprises and host-country contexts.

3.2 Data sources and research scope

The study combines corporate reports, interview records, and relevant publicly available materials to examine Aiju’s investment development and cross-border operations in Kazakhstan. The corporate case report (S1) and written interview record (S2) are used primarily to reconstruct procurement arrangements, technical cooperation, and operating decisions. Route-related materials (S3) provide supporting logistical context. Public sources (P1–P9) include media reports from China and Kazakhstan, information from education authorities, and an investment promotion agency’s project profile. They add information on project progress, processing and shipment outcomes, and the experiences of local producers and employees recorded in the reports. Kazakhstan’s 2021 land-law amendment (L1) is used to analyze the institutional context of subsequent operations. Table 1 summarizes the sources and their analytical uses.

Table 1. Case materials and analytical uses.

The project events examined begin in 2015, and subsequent public reporting extends the available operating information to January 2026. Data compilation records the source, event date, reporting date, and definition of each indicator separately. Actual output, design capacity, construction plans, and participants’ expectations are distinguished to avoid conflating different types of information. Public reports are further examined to distinguish journalists’ accounts, corporate statements, institutional summaries, and participants’ statements. Reports reproduced from the same original source are treated as a single source rather than counted as independent evidence. The materials primarily complement one another and allow cross-referencing: corporate and institutional sources document project construction and operating arrangements, while media reports add process information on actual production, expansion, employee training, and local producer participation. Interviews contained in media reports are identified separately from the written interview record used in this study (S2), preserving the distinction between these sources and their evidential characteristics. This approach traces project development while differentiating factual records, actors’ statements, and subsequent interpretation as clearly as possible, providing a consistent evidential basis for identifying operating activities and changes.

3.3 Analytical procedure

The study employs a case-analysis approach guided by the systems framework, organizing and analyzing corporate materials and public sources concerning Aiju's investment in Kazakhstan and associated cross-border activities. First, temporal information in the materials is used to reconstruct key activities in project construction, procurement, technical cooperation, and cross-border logistics, examine the formation and development of the operating network, and interpret its institutional background using the relevant legal text. Second, case information is organized through the four subsystems of institutions and the external environment, organizational governance and capabilities, sustainable production, and supply chains and markets. The analysis examines how institutional conditions, enterprise resources, partners, and local producer participation jointly shape investment and operating arrangements.

The analysis then follows the pathways of risk absorption, capability reconfiguration, and value creation through an operating obstacle–response arrangement–observable outcome sequence. It examines connections among contractual procurement, technical cooperation, processing, logistics, and market access to explain how specific coordination arrangements across subsystems contribute to the formation of capabilities for sustained operations. Accounts of the same events and practices are cross-referenced across sources, and operating arrangements are situated within host-country institutions, the enterprise's resource base, and market conditions to identify their origins, functioning, and outcomes. For example, restrictions on the sale of oilseed cake and meal are linked to changes in phytosanitary market access to examine institutional effects on processing and sales. Adjustments to customs declaration procedures are connected to changes in clearance costs for a particular shipment to examine the business outcomes of coordination across actors. The analysis also incorporates transport delays and postponed expansion as events that depart from a smooth development trajectory. Existing processing and market capabilities, public-sector support, and demand conditions are considered alongside coordination arrangements to assess their respective roles in operational continuity and identify the conditions and boundaries of the mechanisms. Case facts, participants’ interpretations, and the study’s inferences about mechanisms are presented separately, with relationships across subsystems progressively inferred from specific operating events to enhance analytical transparency and traceability.

4 Case background and operating network

4.1 Enterprise and project background

Aiju developed from a grain-processing enterprise founded in Xi'an in 1934 and subsequently underwent several ownership and organizational changes. It completed a shareholding reform in 1998 and adopted the name Xi'an Aiju Grain and Oil Industry Group in 2008. Corporate materials indicate that the group gradually developed operations covering grain and oil processing, reserves, logistics, retail, and chain-store businesses, with operating nodes in China and Kazakhstan. For the period it describes, the corporate report records nearly 1,000 outlets and more than 150 delivery vehicles in Shaanxi (S1). These sales and distribution resources provided domestic market channels for overseas procurement. Understanding the case therefore requires examining local resource access alongside existing downstream channels and situating cross-border expansion within the enterprise's established operating base.

Since 2015, Aiju has participated in agricultural cooperation in Kazakhstan under the BRI (Bitabarova, 2018; Kenderdine, 2018; Zhang, 2021). Corporate materials describe plans for an agricultural logistics and processing park covering 333.33 ha, with oil processing, grain storage, food processing, and dedicated railway facilities. The first phase of the oil-processing plant reportedly entered trial operation in 2016, and existing grain-storage and drying facilities were subsequently incorporated into the operating network. The Alashankou flour mill began production in 2017, adding a border processing node (S1). The overall plan also included agricultural cooperation, overseas grain-storage nodes, and an industrial platform to attract other enterprises. These activities progressively connected agricultural production, processing, logistics, and market access across borders. Distinguishing operating facilities from planned projects also shows how the enterprise combines existing coordination capabilities with a longer-term network development strategy. Business reporting likewise identifies Xi'an's growing role as a hub for China–Kazakhstan grain trade (Cheng, 2017). A project profile published by Kazakhstan’s investment promotion agency explicitly identifies Taiynsha Mai as a joint project involving a local project partner and Aiju (KAZAKH INVEST, n.d). This establishes the plant’s relationship to the cross-border operating network examined here and provides a basis for including it in the case. Accordingly, the subsequent analysis incorporates publicly documented production, operations, and expansion at the plant as additional evidence of Aiju’s local operating activities in Kazakhstan.

4.2 Cross-border operating network and business connections

Within this project setting, Aiju's cross-border operations are concentrated in Kazakhstan, Alashankou, and Xi'an. Kazakhstan focuses on local production and procurement, processing, and storage; Alashankou provides border transshipment and processing connections; and Xi'an connects domestic processing, distribution, and sales. Procurement, processing, and transport link the three nodes. Table 2 summarizes these arrangements.

Table 2. Operating arrangements in Aiju's overseas farmland investment.

These arrangements connect local production and procurement, processing and storage, border transshipment, and domestic sales. Aiju engages local producers through contract farming and links them with domestic markets through processing facilities and cross-border logistics. Its OFI operations thus extend from raw-material acquisition to processing, distribution, and sales. Connections among the nodes illustrate how the enterprise combines agricultural resources with processing capabilities and market channels.

5 Case analysis

Drawing on the corporate report (S1), written interview record (S2), and relevant public sources, this section analyzes the case through the four subsystems of institutions and the external environment, organizational governance and capabilities, sustainable production, and supply chains and markets. It begins with specific operating events involving resource access, production cooperation, and cross-border product flows to examine the division of responsibilities among actors, operational obstacles, and response arrangements. Observable outcomes are then used to analyze connections among operating stages. This provides a basis for explaining how local agricultural resources are translated into operating capabilities through linkages among procurement, production, processing, storage, logistics, and market channels. Section 5.5 synthesizes the relationships among subsystems and the mechanisms through which they support the continued functioning of the cross-border network.

5.1 Institutions and the external environment

The incorporation of agricultural resources into enterprise operations depends on host-country institutional conditions and local producers' willingness to cooperate. The interview record (S2) indicates that Aiju initially attempted to lease land but encountered resistance from farmers and local residents, alongside uncertainty over investment recovery. It subsequently relied more heavily on contract farming. This change shifted cooperation with local producers from land leasing toward agricultural procurement and associated arrangements.

Explaining the division of responsibilities, the respondent states: "Contract farming simply means purchasing their agricultural products; the land still belongs to the farmers" (S2). Under this arrangement, local farmers retain agricultural land and undertake cultivation. The enterprise coordinates seed use and technical cooperation, provides advance payments in some transactions, and purchases the contracted output. This division separates enterprise procurement from farmers' landholding and cultivation responsibilities, allowing the enterprise to participate in local agricultural operations through purchasing relationships. A source published in 2017 already documents this arrangement, establishing that its adoption preceded the 2021 land-law amendment (P1).

Alongside the contractual procurement described in the interview, the internal corporate report records an investment-incentive agreement between the industrial project and Kazakhstan's investment authority. It also describes a division of responsibilities in which the local partner participates in leasing through a seed company and Aiju purchases the output (S1). These accounts further indicate that land-rights arrangements and procurement relationships need to be examined separately when interpreting enterprise resource access. Regarding subsequent institutional changes, Kazakhstan's 2021 land-law amendment prohibits foreign individuals, foreign legal entities, and Kazakh legal entities with foreign participation from holding ownership or land-use rights over agricultural land (Republic of Kazakhstan, 2021). This provision forms part of the institutional context for subsequent operations, but it does not establish that the 2021 amendment caused the earlier adoption of contract farming.

The expansion process further illustrates how investment support translated into specific operating conditions. Citing KAZAKH INVEST and the project manager, ElDala (2021) reported that expansion at Taiynsha Mai began in 2019 and was originally scheduled for completion in 2020. Progress was delayed by difficulties transporting equipment and bringing foreign personnel to the site during the pandemic. Local administrative authorities and the regional KAZAKH INVEST office subsequently helped coordinate the project, and the new workshop entered operation in 2021. The report also noted that the investment promotion agency helped the enterprise conclude an investment contract and supported duty-free imports of equipment and components under the relevant policy framework. Investment support thus entered the operating process through contractual arrangements, equipment imports, personnel mobility, and project procedures, providing institutional conditions for expanding production capacity.

Taken together, the resource-access arrangements and division of responsibilities show that Aiju adapted institutionally by organizing procurement around local production relations and connecting local cultivation to downstream operations through contracts. Producers’ choices concerning land leasing and forms of cooperation influenced entry arrangements, while the host country defined institutional boundaries through land-access and investment rules. Both therefore contributed to shaping cross-border operating relationships. This finding resonates with research on Chinese entrepreneurs in Kazakhstan and host-country agency (Abaganov and Dayuen, 2017; Tjia, 2022). As Aiju relied more heavily on contractual procurement, raw-material sourcing increasingly involved coordination through purchasing commitments, allocated responsibilities, and cooperative relationships. Contract fulfillment, trading options, and the distribution of responsibilities consequently became important conditions for connecting production with subsequent operations.

5.2 Organizational governance and capabilities

These procurement and cooperation arrangements require organizational capabilities for their implementation. To operate under host-country business conditions, Aiju employed local professionals familiar with Chinese and Kazakh commercial practices and established relationships with government agencies, universities, banks, and local agricultural actors.

Communication with government agencies provides an important channel for obtaining institutional information and communicating project needs. The enterprise reported project developments to China's Ministry of Commerce, Ministry of Agriculture, customs authorities, and embassy in Kazakhstan, as well as to Kazakhstan's Prime Minister, Ministry of Agriculture, and other government bodies. It also participated in the 2017 China–Kazakhstan Agricultural Forum, a Ministry of Commerce symposium on investment development in Kazakhstan on January 15, 2018, and the fourth meeting of the China–Kazakhstan Agricultural Products Trade and Cooperation Working Group in Astana on February 12, 2018. These activities enabled project-specific communication with government bodies at different levels, providing institutional information for operating decisions.

In addition to institutional information, the enterprise needs to apply agricultural expertise to local production. Northwest A&F University, Aiju, and local universities in North Kazakhstan jointly established an agricultural science and technology demonstration park. A division of responsibilities across research and development, field application, and procurement connects agricultural expertise with enterprise operations (Ministry of Education of China, 2023). Whereas government communication primarily provides institutional information, this cooperation brings university knowledge and technical resources into variety selection and technology application, providing a concrete organizational basis for enterprise participation in production coordination.

Technical cooperation also needs to be translated into on-site capabilities through workplace practice. Qyzyljar TV (2024) reported that Taiynsha Mai employed 90 people at the time while continuing to require specialist personnel. The local laboratory manager, who had worked at the plant since it began operating, had visited Xi'an for professional exchange and training. The report also documented batch-by-batch testing of products destined for China. These materials indicate that external knowledge and technical resources enter routine production through personnel training, staffing arrangements, and quality testing. Learning and application by local employees in production and testing roles gradually translate cross-border technical cooperation into operating capabilities that can be used on an ongoing basis, providing a personnel base for quality management and production coordination.

In operational terms, the resources provided by different partners are complementary. Government bodies and investment promotion agencies primarily supply institutional information and coordinate cross-border matters involving equipment, personnel, and project procedures. University cooperation introduces agricultural expertise into variety selection and technology application. Local professionals and employee training translate external experience into on-site operating, quality-testing, and day-to-day management capabilities. By organizing these resources around procurement, production, and delivery, the enterprise embeds institutional information, specialist knowledge, and local experience in established divisions of responsibility and processes of knowledge transfer. These connections form organizational capabilities for cross-border operations and support continuing coordination in production, product flows, and quality management.

5.3 Sustainable production

These organizational resources are brought into production through contract farming. Corporate and interview records indicate that Aiju uses contract farming for crops including rapeseed and wheat. Local farmers retain their land and responsibility for cultivation, while the enterprise participates in production organization through seed-use coordination, technical cooperation, and contractual procurement. Cooperation between universities and local producers across seed breeding, cultivation, and procurement links variety selection and technology application to enterprise raw-material requirements, supporting the translation of purchasing commitments into production. Variety selection must also account for local production conditions. Research on spring-wheat breeding in northern Kazakhstan provides agronomic context for understanding varietal adaptation (Babkenov et al., 2020).

Preparation for cultivation requires seasonal financing as well as technical support. The interview material indicates that the enterprise provides advance payments to producers in some transactions, connecting subsequent procurement with current production preparation. This arrangement brings cooperation between the enterprise and farmers into the pre-planting period, although their purchasing and selling responsibilities remain defined by the contract. The respondent distinguishes contracted output from surplus output: the former is purchased by the enterprise as agreed, whereas producers may sell the latter elsewhere or negotiate a sale to the enterprise (S2). Advance payments thus connect production finance with subsequent procurement, while the rules governing surplus output preserve a degree of choice over sales.

After harvest, cooperation extends from production preparation to acceptance, storage, and sales. According to the corporate report, Aiju integrates quality testing and grading, price announcements, contractual procurement, and storage and logistics within a single transaction process. The grain depot communicates testing and grading results to supplying farms; weighing and settlement follow farmers’ confirmation. Farmers may also choose to store wheat temporarily or sell at the prevailing price, depending on market conditions (S1). Quality standards, the basis for settlement, and the timing of sales are therefore incorporated into a continuous set of transaction arrangements. These arrangements secure the raw-material quality required for subsequent processing while preserving certain post-harvest trading options for producers. Related research similarly shows that smallholders’ actual benefits from large-scale agricultural investment are closely associated with contractual terms and their implementation (Makunike and Kirsten, 2018).

Public reporting adds local producers’ perspectives on these procurement arrangements. A North Kazakhstan farmer quoted in People’s Daily (2025) linked advance purchase contracts to lower uncertainty over finding buyers and emphasized the importance of transport and sales assurances. This account is consistent with the corporate and interview materials concerning contractual procurement, storage, and post-harvest services. It suggests that producers’ evaluations of cooperation depend both on technical support during production and on whether harvested products can move through procurement, transport, and sales channels. Market linkages thus connect production inputs with the continuation of cooperation.

Across preparation for cultivation, output procurement, and post-harvest handling, Aiju progressively embeds its procurement needs in local production through interconnected arrangements. Advance payments and technical services bring cooperation into the preparatory stage; contractual procurement and quality acceptance establish rules for transferring output; and storage and sales arrangements connect production with processing and markets. Farmers primarily undertake cultivation, while the enterprise handles acceptance, processing, and downstream market linkages. Disposition of non-contracted output, confirmation of quality results, and the choice between temporary storage and sale preserve some trading discretion for producers. Continued production cooperation therefore rests on alignment among cultivation responsibilities, purchasing commitments, handover standards, and sales channels, and is shaped by the transaction and service options available to producers.

Following procurement and acceptance, production coordination extends to in-plant processing. According to the corporate report (S1), oilseed processing includes intake testing, cleaning and drying, conditioning and pressing, oil separation, and storage. Treatment is adjusted to raw-material characteristics such as moisture content, and temperature and moisture are controlled before and after pressing. Quality requirements established during procurement are thus implemented through processing procedures and workplace tasks, linking raw-material acceptance to subsequent production control. Technical training and workplace learning focus on these procedures, gradually translating external knowledge into on-site operating and quality management capabilities and connecting contractual procurement, quality control, and routine production.

5.4 Supply chains and markets

Raw materials sourced locally must pass through acceptance checks, storage, and cross-border transport before entering subsequent operations. According to the internal corporate report, Aiju's historical wheat-intake procedure in Kazakhstan involved transporting harvested grain to a depot by truck or train, conducting laboratory sampling and quality testing, and then communicating the grading results to the supplying farm, with weighing taking place after the farmer raised no objections. The depot subsequently dried, cleaned, and stored the wheat according to laboratory records, with payment based on the contract price and verified quantity. In addition to intake and settlement, cross-border dispatch required certificates of origin, inspection documents, and other pre-shipment approvals. During the period described in the report, obtaining these documents took at least ten working days. The enterprise therefore needs to coordinate inspection records, settlement documentation, and shipping documents alongside the physical movement of grain. Figure 2 presents the pre-shipment workflow.

Connecting these intake procedures with the dispatch activities in Figure 2 shows how quality testing, grading, and weighing provide the basis for product acceptance and contractual settlement. Storage connects the timing of harvest, processing, and dispatch, while documentation and transport preparation affect whether products can move to subsequent nodes. The report also records daily grain-condition checks and records of incoming and outgoing quantities maintained by warehouse staff (S1). These records bring inventory quantities and quality changes into business decisions, providing information for coordinating subsequent processing and dispatch. These activities are interdependent. Once grain enters storage, inventory status and dispatch conditions must be aligned with downstream processing and sales requirements for procured raw materials to support cross-border operations.

These operational linkages are also constrained by cross-border transport conditions. Existing research identifies trade costs, rail capacity, border procedures, and wagon availability as potential influences on Kazakhstan's grain exports (Bimaganbetov et al., 2014). Aiju's internal report records an expected journey of 5–6 days under normal conditions from its processing park in Kazakhstan to Alashankou, whereas several reported journeys took 12–15 days. This gap indicates continuing uncertainty in cross-border transport at the time. To address practical transport problems, S1 records a strategic partnership with Kazakhstan’s railway group, under which the railway operator transported wheat, edible oils, and other products, while the North Kazakhstan regional government helped facilitate and coordinate the arrangements. This established a clearer division of responsibilities among the enterprise's shipment requirements, the railway operator’s transport services, and local government support. It illustrates the dependence of cross-border logistics on cooperation among enterprises, transport service providers, and local authorities, with multi-actor coordination strengthening connections at the transport stage. Research on the Chang'an freight train service provides additional context for cross-border transport during this period (Wang, 2019).

Interdependence between production and markets is particularly apparent in the sale of oil-processing by-products. Qyzyljar TV (2018) reported that Taiynsha Mai processed 11,000 t of raw materials and produced 3,015 t of oil in 2017. However, phytosanitary requirements restricted exports of rapeseed cake and meal to China, and accumulated stocks constrained plant operations. Reporting in May 2018 linked the signing of a China–Kazakhstan protocol on phytosanitary requirements for rapeseed meal to expanded export opportunities for by-products. The event shows that continued processing depends on market access for by-products as well as raw-material supply and sales of the main product. Easing the access barrier created conditions for fuller use of existing processing capacity. The design capacity cited in the report describes potential production capability and is therefore distinguished here from actual processing volumes and output already achieved during the same period, maintaining consistent definitions of operating outcomes.

Changes in customs procedures provide another observable example of business outcomes associated with coordination at supply-chain nodes. Xinhua News Agency (2018) reported that, following the introduction of manifest consolidation by the Xi'an International Trade and Logistics Park and Xi'an Customs, the number of customs declarations required for one Aiju shipment of 2,000 t of crude edible oil fell from 86 to 2. Clearance costs for that shipment reportedly decreased by 97%. The same report stated that, by November 29, 2018, the enterprise had transported 50,000 t of wheat, 10,000 t of flour, and 20,000 t of edible oils to China via the Chang'an train service that year. These observations capture different levels of operating outcomes. The former connects a specific procedural change with lower transaction costs, while the latter records cross-border goods flows already realized during the reporting period. The operational significance of coordination is thus reflected both in improvements to particular processes and in the actual functioning of the cross-border network.

Taken together, these events show that cross-border supply-chain coordination involves both product handovers and alignment among operating stages. Quality, quantity, and documentation standards determine whether products can be transferred smoothly among actors and nodes, while market access, transport capacity, and processing schedules jointly shape the match among raw materials, capacity, and demand. Restrictions on meal exports show how downstream market access can constrain upstream processing. Changes in customs procedures illustrate how alignment between regulatory requirements and business processes can improve efficiency at a specific transaction stage. Cross-border operating capabilities therefore rest on connections among processing facilities, market channels, regulatory procedures, and logistics nodes. Coordination across procurement, processing, storage, transport, and sales entails continually identifying and adjusting to constraints at each stage to maintain a stable connection between production and markets.

Spatially, these business connections take the form of a division of functions among Kazakhstan, Alashankou, and Xi'an. Figure 3 accordingly depicts the spatial arrangement of Aiju's cross-border operating network and the business connections among its nodes.

5.5 Pathways across subsystems and associated trade-offs

The operating relationships among the four subsystems can be synthesized into three complementary pathways: risk absorption, capability reconfiguration, and value creation. Contractual procurement, local cooperation, and access-related coordination in Section 5.1 connect host-country institutions to resource sourcing and cross-border product flows. They illustrate risk absorption through the division of responsibilities and coordination across actors to address uncertainty in resource access, investment implementation, and market entry. Recruitment of professionals, university cooperation, and workplace training in Sections 5.2–5.3 translate external knowledge, local experience, and technical resources into production organization, quality testing, and business coordination, illustrating capability reconfiguration. Linkages among procurement, processing, storage, sales of main products and by-products, and cross-border logistics in Sections 5.3–5.4 connect local raw-material supplies to downstream markets, illustrating value creation. The three pathways thus explain the functioning of the cross-border network through institutional adaptation, capability formation, and market linkages, respectively.

In practice, these pathways are interwoven and operate jointly through coordination among different operating stages. Institutional access and market channels enable the effective use of technology, equipment, and production capacity; production and quality management capabilities support reliable processing and transactions; and continuing procurement, processing, and delivery sustain cooperative relationships. Operational sustainability consequently depends on alignment among subsystems and a dynamic balance between stable cooperation, operating flexibility, and resource commitments. Table 3 summarizes the subsystems, operating logic, and principal trade-offs associated with each pathway.

Table 3. Pathways across subsystems, operating logic, and principal trade-offs.

The three pathways describe different ways in which institutional conditions, organizational resources, production arrangements, and market channels are translated into capabilities for sustained operations, each with distinct coordination requirements. Contractual procurement organizes resource access through allocated responsibilities and cooperative relationships, increasing requirements for reliable contract fulfillment, financing arrangements, and multi-actor coordination. Specialist knowledge and technical resources must be translated into on-site capabilities through appropriate job assignments, continuing training, and organizational learning. Connections among procurement, processing, and markets depend on alignment among raw-material supply, processing capacity, transport conditions, market access, and demand. Risk absorption, capability reconfiguration, and value creation therefore support one another across operating stages. Sustained operations depend on maintaining dynamic coordination among capabilities, resources, and market conditions and appropriately allocating the associated responsibilities, inputs, and returns.

6 Discussion

6.1 From land control to value-chain coordination

The Aiju case extends attention from farmland acquisition to the organizational arrangements supporting cross-border agricultural operations. The interview record describes procurement relationships between the enterprise and local producers, while the corporate report connects procurement with processing, storage, and sales. Aiju had adopted contract farming by 2017, before the 2021 land-law amendment. The case contributes by showing how contracts, technical cooperation, and downstream assets enable the enterprise to coordinate agricultural resources while local producers undertake cultivation. Host-country rules and producer participation jointly constitute the institutional conditions for this coordination. According to the enterprise respondent, local resistance to leasing influenced entry arrangements. Producer participation and host-country authority over land access are therefore both part of the case explanation; contractual coordination connects these institutional conditions with enterprise procurement and downstream capabilities. Research on China–Kazakhstan agricultural cooperation offers a comparative perspective. Tjia (2022) documents negotiations by a Kazakh partner over a joint processing project and the phased arrival of Chinese technical personnel to allow time for local capability development. Host-country actors thus shape not only access rules but also the practical organization of knowledge transfer and processing cooperation, complementing the procurement relationships examined here.

6.2 Sustainable enterprise operations and supply-chain resilience

The case materials reveal three levels of operating outcomes. First, actual processing and shipment activities show that the cross-border network progressed from investment plans to operation. Taiynsha Mai’s raw-material processing and oil production in 2017, together with Aiju’s shipments to China in 2018, provide observable evidence from production and distribution, respectively (Qyzyljar TV, 2018; Xinhua News Agency, 2018). Second, changes in declaration-related costs for a specific shipment indicate that alignment between institutional arrangements and business procedures can improve efficiency in particular transactions. Third, the expanded workshop’s entry into operation in 2021 and records of export production and employee roles in 2024 indicate that the project remained active at different stages and adapted to changing external conditions (ElDala, 2021; Qyzyljar TV, 2024). Observable outcomes therefore encompass actual business activity, process improvements, and continuing adaptive capacity, connecting the organizational arrangements discussed above to operating performance.

Local participation further illustrates the human and cooperative foundations of this continuity. Alongside the staffing and testing-related training discussed above, People’s Daily (2025) describes the experience of Sailike, an employee who had worked at Aiju’s park for 8 years. Through training, he learned temperature and moisture control techniques and applied them in pressing operations. This account connects technical cooperation to workplace learning and production practice, complementing farmers’ accounts of procurement arrangements and transport and sales assurances. Taken together, operational sustainability in this case is reflected primarily in the continuation of production and product flows, responses to operating obstacles, improved process efficiency, and the gradual development of employee skills and cooperative relationships. Longer-term effects on farmers’ earnings, community development, and environmental performance require more direct and continuous micro-level data for assessment.

6.3 Comparison with existing OFI research

Land investment research has long emphasized the foundational roles of land rights, local institutions, and benefit distribution in cross-border agricultural investment (Lin, 2017; Schoneveld, 2014). Critical scholarship further argues that resource access needs to be examined alongside control over production and market relationships (Borras and Franco, 2012; White et al., 2012; McMichael, 2012). The Aiju case provides a concrete enterprise-level setting for this discussion. Local farmers retain their land and cultivation responsibilities, while the enterprise participates in production preparation and the organization of output through advance payments, contractual procurement, quality acceptance, processing, and sales channels. This creates interdependence extending from production to markets. Quality notification and confirmation and the choice between storage and sale recorded in S1, together with the option to sell surplus output elsewhere recorded in S2, show that producers retain some decision-making scope at different transaction stages. The practical value of these choices depends on access to alternative buyers, storage, and transport services. Bargaining relations therefore depend on the setting of handover standards, the allocation of production and inventory risks, and producers’ ability to access alternative trading channels, as well as land rights. By examining land control, contractual arrangements, and market access within a common framework, the study identifies more specifically how rights and responsibilities are allocated in cross-border agricultural cooperation and the conditions shaping that allocation.

Comparative research also emphasizes negotiations over investment access and differences among institutional settings (Burnod et al., 2013; Bräutigam and Zhang, 2013; Scoones et al., 2016). Research in Madagascar highlights competition over authority and access in land transactions, while work in Zambia examines direct links between investors and smallholders and their production outcomes (Makunike and Kirsten, 2018). Aiju represents a different organizational setting: local producers continue to hold land, and an enterprise with established processing and market capabilities connects local production to cross-border value chains through contractual procurement, processing, logistics, and sales. The study thus extends analysis to organizational linkages among production, processing, and markets, adding an explanation of enterprise-level cross-border operating mechanisms to OFI research. Livelihood and environmental outcomes are also shaped by local production practices, resource-use conditions, and community relations and should be distinguished from enterprise operating outcomes (Zaehringer et al., 2021). Analytical generalization therefore applies primarily to enterprises with some established processing and market capabilities, the ability to organize local procurement partnerships, and access to cross-border logistics networks. Where downstream market foundations, land-use arrangements, or customs coordination conditions differ substantially, the relationships among resource access, production organization, and value realization may take different forms.

6.4 Research contribution and theoretical implications

Building on research that jointly considers institutions and resources in explaining enterprises' overseas entry strategies (Meyer et al., 2009), this study extends the analysis to sustained operations after entry into the host country. The case shows that commercial use of agricultural resources depends on effective connections among resource access, knowledge and skills, production organization, and market channels within specific operating activities. Restrictions on meal exports and delayed expansion further show how a constraint at one stage can propagate through production, processing, and distribution relationships to other stages. Institutional coordination, staffing, and technical support can create conditions for existing resources and facilities to function effectively. The theoretical value of a systems perspective therefore lies in identifying interdependencies among operating stages and their dynamic adjustment. The four subsystems identify the basic conditions for sustained operations; the pathways of risk absorption, capability reconfiguration, and value creation explain how coordination across actors translates those conditions into stable operating capabilities.

This analysis also connects operational sustainability more closely with critical scholarship on overseas land investment. The case shows that land rights, production responsibilities, and market organization can be held or undertaken by different actors: farmers retain land and undertake cultivation, while the enterprise participates in production organization and market linkages through advance payments, contractual procurement, quality acceptance, processing, and sales channels. The resulting interdependence is shaped by producers’ willingness to cooperate, their trading choices, and alternative market conditions. Risk absorption thus involves actors adjusting risk allocation through contractual divisions of responsibility and negotiation. Value creation rests on alignment among production responsibilities, transaction conditions, and market channels. Evaluation of operating outcomes also needs to consider the responsibilities borne and benefits received by different participants, allowing a fuller understanding of the allocation of rights and responsibilities and the formation of value in cross-border agricultural cooperation.

The case-based explanation developed here is that complementarity between local agricultural resources and an enterprise's established processing and market capabilities must be supported by implementable purchasing relationships, appropriate technology and personnel, and cross-border access and delivery arrangements to translate into sustained operations. The four subsystems characterize the institutional, organizational, production, and market conditions underpinning this process, while the three pathways reveal how those conditions are connected and interdependent. Compared with analyses focused primarily on investment scale, land acquisition, or individual facility investments, this study places operating obstacles, coordination activities, and observable outcomes within a common explanatory framework. It explains at the enterprise level how agricultural resources are translated into capabilities for sustained operations through value-chain coordination and specifies the conditions under which this mechanism applies across different resource bases and institutional settings.

7 Policy implications, limitations, and conclusions

7.1 Implications for enterprises

When assessing OFI projects, enterprises should consider the overall alignment of procurement arrangements, local cooperation, processing capacity, and market channels, coordinating investment in physical facilities with procurement systems, technical services, and cooperative relationships. Cooperation should specify quality standards, price formation, advance payments, and settlement procedures, supported by accessible communication, grievance, and exit mechanisms for producers. Operational management should strengthen connections among contractual commitments, processing plans, storage schedules, transport, and sales demand, aligning resources with the capabilities of individual activities to support continued cross-border operations.

7.2 Implications for home- and host-country policies

Policy cooperation between home and host countries can focus on aligning investment procedures, inspection and quarantine requirements, customs and transport processes, and technical exchanges. Local authorities and specialist service providers can support coordination on specific issues involving equipment, personnel, and transport. Public service systems should improve regulatory transparency, procedural predictability, and service accessibility, providing clear and stable institutional interfaces for enterprises and other participants. Project-level coordination experience can then inform more regular and institutionalized support mechanisms. The resource-access requirements reflected in Kazakhstan's 2021 land-law amendment highlight the importance of host-country institutional conditions in investment cooperation (Republic of Kazakhstan, 2021). Within these conditions, both sides can support transparent contractual arrangements, participation by local producers and technical actors, and processing and logistics facilities aligned with operating needs. Policy evaluation should consider contributions to trade and local economies alongside benefit distribution, producer participation, and actual producer needs, promoting coordination between enterprise operations and local development. Policy coordination should also strengthen channels for local producers to express concerns and participate in negotiations, improve dispute resolution, and evaluate cooperation in terms of their actual interests rather than project establishment or trade growth alone.

7.3 Financial and ESG implications

Financial institutions can assess the commercial viability and operating foundations of OFI projects by examining enterprise cash flow alongside the alignment of procurement, processing, delivery, and sales. Given the time lags between agricultural production, raw-material procurement, and sales receipts, financing maturities and funding arrangements should match operating cycles, with attention to advance-payment support and working-capital turnover. Project assessment can also incorporate product traceability, responsible sourcing, transparent quality standards, and stakeholder communication, translating environmental and social responsibilities into specific operating practices. These considerations provide a basis for assessing business commitments and the fulfillment of responsibilities, in line with the principles for responsible agricultural investment promoted by the Committee on World Food Security (CFS, 2014).

7.4 Limitations and future research

This single-case study develops an explanation that applies primarily to agribusinesses with some established processing and market capabilities, the ability to organize local cooperation, and access to cross-border distribution networks. Alongside relatively smooth operating arrangements, the analysis includes obstacles to land leasing, transport delays, export barriers, and postponed expansion to identify more fully the conditions and boundaries of coordination mechanisms. Purposive case selection may nevertheless be affected by survivorship bias, while corporate materials and media reports may contain socially desirable accounts, retrospective explanations, and selective disclosure. To make evidence use transparent, the study distinguishes actual operating activities, construction plans, and participants’ expectations, and identifies corporate statements, media records, and participants’ interpretations separately. Repetition of the same original account is not treated as independent verification. The available evidence primarily concerns operations in specific years, shipments, and participant accounts. It supports examination of business continuity, transaction-cost changes, skill formation, and adjustments to cooperative relationships. Longer-term outcomes, including sustained profitability, farmers’ net earnings, community impacts, and ecological performance, require more continuous and direct micro-level data.

Future research could compare enterprises, investment models, and host-country settings to examine further the coordination relationships and conditions identified here. Longitudinal operating and financial records, farmer and community surveys, employee follow-up studies, and environmental monitoring could support longer-term assessment of enterprise operations, producer benefits, local social impacts, and ecological performance. Such evidence would also enable comparison of risk absorption, capability reconfiguration, and value creation across different enterprise capabilities, resource bases, and institutional environments, deepening understanding of the relationships among sustained operations, producer participation, and local development.

7.5 Conclusion

Using a systems perspective and Aiju’s operations in Kazakhstan as a case, this study examines the organizational conditions and mechanisms supporting sustained operations in OFI enterprises. The findings indicate that local producers’ control over land and cultivation, the enterprise's procurement and processing capabilities, and public-sector coordination of investment and cross-border procedures jointly shape operating arrangements. Contract farming connects local cultivation to enterprise procurement; technical cooperation and employee training support production organization and quality management; and processing, storage, logistics, and sales channels connect raw-material supplies to downstream markets. Public records of actual processing and shipment activities, changes in clearance costs for a specific shipment, and subsequent operations provide evidence of how these arrangements function in practice.

The complementary pathways of risk absorption, capability reconfiguration, and value creation reveal relationships among institutions and the external environment, organizational governance and capabilities, sustainable production, and supply chains and markets. The case indicates that sustained operations rest on alignment among resources, capabilities, and market conditions and depend on timely adjustment and cooperation when obstacles arise. Although producers retain their land and cultivation responsibilities, contractual arrangements, quality standards, procurement commitments, and market channels continue to shape rights, responsibilities, and trading choices. By placing agricultural resource access, transaction relationships, and operational continuity within one analytical framework, the study explains how organizational coordination and value-chain linkages translate agricultural resources into capabilities for sustained operations. The findings offer an analytical reference for cross-border agribusinesses with comparable processing, procurement, and market conditions and inform improvements in business coordination, responsibility allocation, and protection of participants’ rights and interests in cross-border agricultural cooperation.

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Footnotes

Edited by: C. F. A. Van Wesenbeeck, Vrije Universiteit Amsterdam, Netherlands

Reviewed by: Anabela Santiago, Centre for International Studies (CEI-ISCTE) of ISCTE-IUL, Portugal

Yonas Derebe Derso, Injibara University, Ethiopia