China News

Danone expects sales boost
French Danone expects sales at its beverage unit in Asia-Pacific, its largest unit in the region, to grow 10-15 per cent annually over the next five years. However, the maker of Evian water and Lu biscuits warned that Asia-Pacific profit margins this year and next would remain flat as rising oil prices drive bottling costs higher. For China, which contributes 9 per cent to group revenue and ranks as the firm?s top market behind France and Spain, Danone expects sales to grow by a similar 10-15 per cent over three to five years. Danone is competing with Chinese firms Mengniu Dairy and Beijing?s Sanyuan Food Co. Danone claims to be the leader in the region with a 20 per cent share of a 34 billion litre market.

Sea cucumber peptide
Zhifudao Ocean Biology Science & Technology Co (Yantai, Shandong) has developed a process to extract peptides from sea cucumber. The product has recently obtained official registration as a health ingredient. It is said to help lower blood cholesterol, ease hypertension and relieve fatigue.

Threat from food additives
A number of government organisations have jointly announced that food additives constitute the greatest threat to food safety in China. To address this problem, authorities will increase the number of quality specifications of food additives in line with global standards. Less than a quarter of all state quality specifications for food additives can be compared with international standards; this ratio will increase to at least a half in the next two years.

Major inulin project finished
Construction of Weide Co (Qinghai), which is to become Asia?s largest inulin production base, has been completed. The first crop of Jerusalem artichoke planted in the Qinghai region is being harvested this winter. It is hoped that 50,000 tonnes can be supplied this year. The company then intends to produce a little more than 4,500 tonnes of inulin next year. The second phase of the project is scheduled to start in the spring of 2005.

Solutions for diabetics
Some 75 per cent of all medicines and health foods for diabetics in China are based on Western medicine. However, long-term use can build resistance or cause damage to the liver or kidneys. Chinese medicine is believed to be a more promising source for ingredients with hypoglycaemic functionality. During the past 10 years, 241 hypoglycaemic health foods have been approved in China, representing only 1.6 per cent of the total market for health foods. R&D in this sector is concentrating on extracting hypoglycaemic polypeptides from vegetable sources. One company, Beisheng (Guangxi), is reporting success with bitter gourd (kugua).

IFF to boost ingredients capacity
International Flavors & Fragrances says it is planning the construction of a new speciality ingredients manufacturing plant in China. A groundbreaking ceremony was held in November for the $29 million plant that will focus on the production of aroma chemicals. The factory is expected to open in late 2006 and to reach full capacity in 2008. The new plant will be located on a 16.9 hectare site within the Hangzhou Economic and Technological Development Area (Hangzhou, Zhejiang). IFF has a long history in China, including its existing ingredients facility in Xin?anjiang.

Milk flavour
Huadi Food Ingredients Development Co (Qingdao, Shandong) is developing a new series of milk flavours. The company?s R&D is using elements from milk and butter to create flavours to enable food manufacturers to produce dairy-flavoured foods without the fat and lactose contained in milk. The technology includes enzymatic hydrolysis.

Great prospects
The market for health foods has enormous growth potential, according to the China Health Products Association. Based on the expectation that the ratio of health products in the total expenditure of Chinese consumers will eventually be comparable to that of Japan or Western countries, the total value of the market may reach $15.7 billion in 2010 and further increase to $54.37 billion by 2020. This figure was only $3.62 billion in 2003.

Extracts from Giract ChinaNews
GIRACT is the leading transnational market research organisation specialising in food ingredients, additives, related fine chemicals and technologies.
Data is generated from secondary sources, including major Chinese trade and government sources.
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