FBA Issue 5: November / December 2005
Dawn of a golden era
by SHI Tao
CHINA is the world's largest hog producer and pork consumer. In 2004, the country registered an annual live hog output at 600 million head, total pork production of 47.75 million tonnes and total pork product output of 6 million tonnes.
China produces both traditional-Chinese and non-traditional or western-styled pork products; the former dates a long way back while the latter is much more recent, having gained popularity only since 2002. In that year, traditional Chinese sausages made up 60 percent of China¡¯s total output of pork products, the remaining 40 percent comprising non-traditional products. By 2004, the proportion of traditional pork products had fallen to 20 percent, while non-traditional products took the lion's share at 80 percent.
In 2003, China¡¯s hog industry suffered a setback when a banned growth-promoting drug, clenbuterol, was found in pork meat and processed products sold in the country. Since then, consumers, particularly well-heeled city dwellers, have been reluctant to buy fresh pork and products not certified safe for consumption. This has led to falling sales and plummeting prices for fresh pork.
Where Chinese consumers previously shunned frozen pork, this trend was soon reversed. Food safety concerns propelled a shift in demand from fresh meat to frozen and processed pork products. Among the types of processed products available, western-styled products such as ham and bacon have become increasingly popular with Chinese consumers. Generally, it was heightened food safety awareness rather than a total loss of confidence in fresh meat that led to the steady growth in meat processing.
Since then, there has been no turning back. The growth in the scale and level of integration in China¡¯s pork processing industry has continued to expand by leaps and bounds.
In July this year, the Processed Meat Producers' Association announced its list of top-50 processed meat producers in China for 2004. Heading the list was Shineway, with 1.5 million tonnes. Trailing a distant second was Jinluo at 670,000 tonnes and third-placed Yurun at 190,000 tonnes. Of the 50 meat producers listed, 35 operated slaughterhouse-cum-processing facilities, with 11 of these businesses located in the eastern province of Shandong, about 100km south of Beijing, and five in neighbouring Henan province.
Processed meat products in China can be classified as either high-temperature meat products (HTMP) or low-temperature (LTMP). HTMP refers to products cooked at 120 deg C, as opposed to conventional or LTMP (such as ham, western-styled sausages and bacon) which are processed at 100 deg C. HTMP also includes high-temperature Chinese sausages. These are sausages unique to China, processed at the higher temperature of 120 deg C compared with western-styled sausages (LTMP). HT Chinese sausages, however, are not Chinese wax sausages.
Since 2000, China¡¯s production of HTMP, especially HT Chinese sausages, has been increasing at a rate of 10 percent per annum. By end-2004, China¡¯s production of HT Chinese sausages had reached 1.5 to 2 million tonnes, debunking earlier predictions that these products would not find a ready market in China.
The bulk of HTMP are produced by a handful of companies, with the top seven producers accounting for 1.78 million tonnes. The largest processor alone, Shineway, has an annual output of one million tonnes. Output of HTMP is expected to grow by 10 to 15 percent annually over the next few years.
For LTMP, production reached four million tonnes in 2004 with the seven largest producers accounting for more than 780,000 tonnes, or almost 20 percent of products in this category. Also cashing in on the boom in demand are the many foreign enterprises that have set up plants in southern China producing high quality LTMP. Some of these products have already found loyal consumers in the Chinese market.
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