BEIJING ENT UNIT PAYS US$12 MILLION FOR FOOD FIRM.

Beijing Enterprises Holdings Ltd said on Tuesday that its unit bought a 85-percent stake in a dairy product maker from Philip Morris Cos Inc and its subsidiary Kraft Foods for US$12.24 million.
Beijing San Yuan Foods Co Ltd, in which Beijing Enterprises holds a 72 percent stake, announced on Monday the takeover of the Beijing Kraft Food Co Ltd, but did not reveal the value of the deal.
Beijing Enterprises, a Hong Kong-listed conglomerate controlled by the Beijing city government, said in a statement that Beijing Kraft had audited net assets of 150 million yuan (US$18.12 million) at the end of September 2000.
San Yuan said on Monday that Philip Morris, the world's largest tobacco company, planned to streamline its investments in China following its takeover of Nabisco Holdings Corp. It would focus on developing core businesses such as biscuits and beverages.
San Yuan said the takeover of Beijing Kraft, set up in 1993, would boost San Yuan's daily production capacity by 200 tonnes from 560 tonnes.
Beijing San Yuan's annual operational revenue is 1.5 billion yuan and it has a 50 percent interest in Beijing McDonald's.
San Yuan is preparing to list shares on China's domestic currency A-share market, according to Chinese state media.
The remaining 15 percent in Beijing Kraft is held by a Chinese enterprise called Beijing Agriculture Industrial and Commercial United Corp.
Shares of Beijing Enterprises closed down 6.87 percent at HK$7.45 on Wednesday.

CHINA'S GREEN FOOD EXPORTS ON THE RISE.

China's green food exports are facing great chances, said Ding Xiang, deputy director of the China Green Food Development Center.
China's green food is graded A-or AA. The AA-grade green food is selling well on the international market for its reasonable price and special product mix.
The Chinese government has set up a standard system and authentication system which comply with international standards for green food. In recent ten years, China's Green Food Development Center has established relations with 500 related institutions in 90 countries.
In recent years, many companies from Europe, the United States and Japan began to import AA-grade green food from China. At present, Heilongjiang, Hebei, Shandong, Inner Mongolia, Jiangxi, Fujian and Yunnan have set up AA-grade green food export bases. Some of them were jointly set up by Chinese and foreign companies.

FOOD SECTOR TO BECOME CHINA'S LARGEST INDUSTRY.

China's food industry is expected to maintain rapid growth over the next five years to eventually become China's largest industry by 2020.
The food processing industry has become the main pillar of China's national economy.
Experts predicted that if the proportion of agricultural output value to food industrial output value reaches one to one by year 2020, the output value of food processing industry will surpass three trillion yuan; if the proportion reaches one to two, the food processing industrial output value will hit 6 trillion yuan.
Experts said that 30 per cent of the food consumed in China is produced through industrial production.

Health food market growing but limited by high costs.

In the roughly year and a half since Lin Yue-li opened the He Yang restaurant in Taipei, offering organic and vegetarian meals, there has, she said, "been a huge growth in interest among people in unadulterated and natural foods."
Over the last five to ten years, people's interest in organically grown food has expanded, catching the interest not only of restaurateurs, but also food producers, manufacturers, and retailers.
According to a report on Taiwan's food market released by the New Zealand Trade Development Board, the health food sector on the island, which includes natural and organic food as well as Chinese medicines and dietary products, "has grown at an average of 35 percent per annum during the last three years."
The growth of the island's organic and health food sector may be in keeping with a general trend towards healthy eating unfolding throughout the Asia Pacific region.
Communications company Ogilvy & Mather reported in November that people in the region are eating healthier than they were twenty years ago. The report cited growing levels of education and affluence as two of the main reasons for the change.
As eating habits change local food producers are beginning to respond to the demands of Taiwan's increasingly health conscious consumers.
Wei Chuan Food Corporation last month announced the release of its first health food products. The company cited surveys indicating that the majority of islanders had tried, and were interested, in consuming health food.
Kaohsiung based food producer Green Earth is another player in this growing market. Green Earth, which was founded in 1996 imports various organically grown foods such as beans, grains, and whole flour. The company also manufactures breads, oils, tofu, as well as other products from organically grown materials. According to Sherrie Tien, CEO of Green Earth, "as people become more educated they come to demand higher quality and safer food."
Nonetheless, despite the growing popularity of eating healthy food, the high costs of raising and manufacturing organic products stunts corporate profits and also means high prices for consumers, further limiting growth, indicated Tien.
Prices on imported foods are expected to come down following WTO entry. Under WTO regulations Taiwan will be obligated to reduce agricultural tariffs.
According to Lin, who uses mostly Taiwan raised produce, "there is really no problem when it comes to finding locally grown produce", she said. Lin added that the quality of Taiwan's organic produce is high.

HEALTH FOOD MOST COMMON CHINESE NEW YEAR GIFT - SURVEY.

Health food is the most common choice of local residents as gifts for the Chinese New Year holiday, revealed a survey published yesterday by Kimo.com and Brand's, a subsidiary of Cerebos Pacific Limited.
According to the survey, more than 60 percent of people plan to purchase health supplement gifts this year, with only 16 percent of people choosing groceries, fruit, wine and cigarettes as festival gifts, said Steven Yang, group product manager of Cerebos Taiwan Ltd.
In the survey report, Brand's found that most consumers plan to give presents to their parents or family during the festivities. "Around 40 percent of respondents, mostly company employees, said that the budget for each gift is more than NT$2,000 each for family members, relatives or close friends," said James Fang, vice president of marketing and sales with Cerebos Taiwan Ltd.
Fang also pointed out that more and more consumers have become aware of the importance of maintaining good health. Many consumers follow the trend of concern for one's health by giving a health supplement gift to family or close friends. Even with slower economic growth, more than 85 percent of consumers said that they would not abandon the tradition of gift giving during the festivities.
In addition, according to the survey, more than 60 percent of consumers hope to receive a gift of health supplements. Out of a total of 5,900 respondents, 40 percent of those aged above 25 would like to buy gifts for their parents, while only 5 percent plan to give a gift to their boss or business customers.
The survey indicated that most people maintain a close connection with their family and friends during the festivities, and 30 percent of people plan to spend more than NT$1,000 per person, while 22 percent plan to spend about NT$2000, and 23 percent will spend more than NT$3,000 on each Chinese New Year gift for their family members, relatives and closed friends.
Currently, the survey showed, consumers focus more on the practical value of their gifts. Meanwhile, the survey revealed that the majority of shoppers purchase their festival gifts at hypermarkets because of the affordable prices there and the wide variety of products on offer.

CHINA TO ENSURE ADEQUATE FOOD SUPPLY - AGRI MINISTER.

China will try to keep food supplies secure and at adequate levels in the coming five years, which is vital because of the country's huge population and also considered a precondition to raise farmers' income, said Chen Yaobang, Minister of Agriculture.
He said at the National Work Conference on Agriculture that China will face great challenges of keeping the grain output up, considering the growing population, shrinking cultivated land and water shortages.
Last year's grain output is estimated to drop by 9 per cent from 1999, which was mainly attributed to a severe drought and the government's reduction of the grain-growing acreage in an attempt to restructure the agricultural sector, he noted.
The Chinese government will first focus on preventing the acreage of grain growing areas from shrinking. Meanwhile, scientists are encouraged to develop high-yielding grain strains.
The government will continue buying grain from farmers at a higher price, which has proved an effective way to urge farmers to produce more grain, Chen said.
Also, China plans to develop some major grain planting areas into long-term bases for food supply, he added.
The Chinese government has long paid great attention to its production of food and the country has achieved good grain harvests in the past five years, with each Chinese now having 400 kilograms of grain on average,
Chen pointed out that, with sufficient storage, grain supply
met the demand last year though output has dropped.
Chen said China will also make a major bid to ensure that farmers' income be increased in the next five years.
The growth of farmers' income shrank annually in the past five years although their earnings rose a year-on-year 5.4 per cent in the first four years, the official said.
Chen noted that the growth of farmers' income will greatly affect the implementation of the government's demand-stimulating policy, as 800 million farmers form a huge rural market vital to the country's domestic demand.
The government will give priority to farmers in the central and western regions and grain-producing areas as well as those with low income, he added.
Marketing will be further introduced into the agriculture industry and farmers are encouraged to engage in the processing and service sectors so that they will enjoy more opportunities to earn money, while the government works to develop more villages into small towns.
The Chinese Government will increase investment in infrastructure projects in rural areas in an effort to improve farmers' living conditions and production environment as well as make the rural market more open to the outside.

DAIRY PRODUCTS TO BE ADDED TO CHINESE DIET.

China Consumers Association (CCA) and some 300 experts encourage the Chinese public to add dairy products to their diet in the new century, according to a report from China Environment News.
The suggestion was made in line with CCA's theme for 2001, which features "Green Consumption".
According to nutritionists, 0.5 litres of milk can provide 50 percent of the animal protein and calcium needed by an individual per day.
Meanwhile, milk consumption is also a critical factor for the World Health Organization (WHO) in evaluating a country's living standards.
However, milk is not traditionally part of the Chinese diet and occupies only a marginal segment of grocery items.
The annual per capita milk consumption in China now is only 6.4 kilogram, much less than the 105 kg world average and the 300 kg level in some developed nations.
Scientific surveys indicate that there are no differences in terms of growth between Chinese and foreign babies less than 12 months. But the growth rate of Chinese children is considerably slower after one year and is even slower during puberty, compared to their foreign counterparts.
Scientists attribute the growth differences to lesser milk consumption by Chinese children. They also warn people about the risks of concomitant rachitis, calcium shortage and osteoporosis. Milk products are recommended by the CCA as a solution to these problems.
The CAS Green Consumption activities promote the use of healthy and environmentally friendly products, to pay attention to garbage processing and to regard one's health as a life priority, according to Cao Tiandian, president of the CCA.

Last updated 22 January 2001

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