November 1, 2006

 

China unveils plan to boost food industry profits

 

 

The Chinese government has announced a five-year plan to make its food industry more profitable and address efficiency, small scale processing, technology and infrastructure issues.

 

China's food industry has been rapidly expanding as the booming economy enables more of the population to buy processed food.

 

Foreign investment has poured into the sector and more than 30 of the world's top 50 foodmakers now have a presence in China.

 

The 4000 food businesses in China receiving foreign investment now account for 27 percent of the industry's revenue.

 

However, the government is pushing for more value-added processing and a bigger presence on the global market.

 

Sectors such as edible vegetable oils, fruit and vegetables, meat, marine products, dairy products, beverages and sugar are set to benefit from the five-year plan.

 

In dairy, the government is expected to invest generously to fund new farms and to research on breeding to boost milk supply.

 

Two barriers to growth in China's dairy industry are the lack of resources and limited market demand. Only half the processing capability is being utilised, Wang Dingmian, deputy chairman of Guangdong Dairy Industry Association estimates. 

 

China's consumption is currently only at one fifth of the world's average.

 

The plan would stress environmental protection for city-based food companies, while farms are encouraged to improve management and technology.