October 12, 2007

Tetra Pak expands dairy packaging capacity to 40 billion in China

With the completion of a EUR 100 million (US$141.77 million) plant in Inner Mongolia, Tetra Pak now has a total packaging output of 40 billion containers in China.

The group announced that it has completed the third phase of an ongoing investment strategy in the country, which since 2004 has seen annual production capacity for its packaging rise from 8 billion units.

The group will further extend this focus next year with the inauguration of a new EUR 60 million (US$85.1 million) packaging plant in Hohhot, Inner Mongolia, increasing total annual output capacity by a further 8 billion packages. 

The completed plant, together with four other production plants in the country would enable the group to serve processors throughout Southern, Eastern, Nothern and North Eastern China.

The group is also working with both the Chinese government and national industry associations to push consumption growth through various industrial development prgorammes.

Demand for dairy products in China is surging and has more than doubled in the past five years, according to Rabobank.

While production of raw milk has been growing at a faster rate than demand recently, there is still much room to grow from the current average of 20kg per capita. China's current milk consumption is four times below the world average and twelve times below that for developed countries. 

However, the bank noted that consumers are becoming more sophisticated, moving from milk powder to UHT milk while being more brand conscious at the same time.

Swiss-based Tetra pak group has a global network that designs and sells equipment used to process, package, and distribution of liquid food products.