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Archives 2001

Issue #1 January 2001


The Food Ingredients Industry in Asia

The global food additives market is valued at approximately US$19.60 billion. Flavours represent the largest segment with a value of US$5 billion, followed by hydrocolloids at US$2.82 billion, flavour enhancers US$2.5 billion, acidulants US$2.16 billion, sweeteners US$1.5 billion,
and gums and thickeners US$1.41 billion.
Annual global volume growth for food additives is estimated at 2.5-4.0 percent for 1997-2002.
The largest geographic markets for food additives are Europe, the United States and Japan, accounting for US$12 billion of the total world market demand. Developing countries made up about US$3 billion.
Growth is predicted to be most robust in emerging markets in Latin America and Asia, especially China, Brazil, Mexico and India. These countries are becoming increasingly important for food additive suppliers, as demand for further processed foods in these regions is growing rapidly.
Specific ingredients such as antioxidants and preservatives are in particular demand.

A number of other key trends are also influencing the development of the food and drinks market worldwide, and they will all impact the food additives market. These include:

- an increase in healthy eating, which has boosted demand for artificial sweeteners and fat replacers;
- an increased demand for natural and organic foods, which has held back many additive categories but prompted growth in natural flavours and colours;
- increasing trend towards snacking and convenience, which has implications for a number of additive categories, such as preservatives, which are required to maintain freshness in products that are likely to be eaten on the move, and flavours, with many modern snack foods featuring novel and unusual flavours and tastes.

Consumers have become increasingly interested in improving health through the diet over the past few years. This has led to the development of several entirely new additive categories.
One main focus of healthy eating is fat and sugar reduction in the diet, which has influenced development of the fat replacers and sweeteners categories. Other additives, such as hydrocolloids, many of which can be used as fat replacers, have also benefited from consumer concerns about fat and sugar intake.
The current boom in the functional foods sector has led to the development of an entirely new set of functional foods ingredients, including products like omega-3 fatty acids and phytosterols for cholesterol control, and probiotics and prebiotics for gut health.
At the same time, established food additives like vitamins, minerals, amino acids, proteins and antioxidants are also finding more widespread use as functional food ingredients. More and more foods are being fortified with vitamins and minerals, while amino acids and proteins are being added on to sports and energy foods and drinks.
The international food additives market, which used to be dominated by major western companies, is gradually attracting more Chinese investors, as emerging markets in Asia and Latin America start to develop rapidly. In recent years, these Chinese companies have built up a particularly strong chemical and additive supply industry.
Production in these regions is much cheaper than that in Europe and the US. Consequently, some of the established additive companies have begun to invest in developing their own production sites in these countries for more effective competition.
Currently, however, real innovation in the additive industry, and particularly in areas such as functional food ingredients, will continue to come mainly from European and US companies.

Opportunities in Asia's food and beverage sector

But despite having suffered a severe financial setback, Asia remains one of the most attractive and fastest growing economies in the world. With the regional economies showing positive signs of recovery, as well as other factors like on-going industrialisation, increasing demand for processed foods, legislation changes, and a greater discernment on the part of consumers for quality products, ingredient suppliers are becoming increasingly optimistic about the future.
For instance, with the lowering of tariffs in a number of Asian countries, particularly for agricultural products, companies such as Australia-based Manildra Group, which supplies a wide range of flour, starch, sugar and wheat protein products to Asia, foresees good potential in the future.
It was developing a range of protein products from wheat that will replace milk and soy, to be released in the second half of 1998.
The companys spokesman, Peter Simpson, said that the quality requirements of clients in the region are no different from those in the American food and beverage industry. Asia, he says, is quite sophisticated and also require quality raw materials.
For another company, Defiance Milling Co., one of Australias leading miller and bakery which supplies its mixes to Cadbury Schweppes, and Kit Kat, among others, legislation changes would also mean more opportunities for them.
International manager David OBrien said that for instance, there is now a chance for them to enter the Taiwan market, which used to have a 45 percent duty on flour imports. Now, the import duty is only 25 percent. He also pointed out that there used to be only three types of flour in Taiwan or Indonesia due to regulations, but now there are more choices. And in Indonesia, local mixes are at the moment not available.
Currently, a glance at Asias food and beverage industry reveals that major areas of opportunities include Asian foods, as well as localised western products. Also, as consumption trends in the region continue to develop, segments like convenience foods, dairy, bakery, snacks, confectionery and beverages are expected to grow into the next century.
And although the level of sophistication within the food processing industry varies from country to country within the region, some common trends in Singapore and the major cities of Thailand, Malaysia and the Philippines can be observed.
The following are some fast emerging trends within the food market in Asia Pacific.

1. Functional foods

Industry experts are foreseeing a burgeoning market for functional foods in Asia. Consumers are increasingly demanding products that are healthy, convenient and of higher quality, and manufacturers will need ingredients that can assist them in these areas.
Functional foods, usually perceived to be a niche, premium market, would be the segment to watch in the next century as Asias market gets more sophisticated.
Here, a few industry players map out some products that will become popular, with some already launching or aggressively promoting functional food ingredients to cater to them.
Shirley Ng, regional sales manager of Borregaard South East Asia said that food products which have nutraceutical ingredients or good for you benefits would be the next trend. Examples of such products include those that have anti-stress, anti-ageing or health promoting benefits, but possessing intensive flavours, tastes and aroma at the same time, she says.
Orafti is meanwhile focusing on dairy dry mixes and bakery products such as biscuits when promoting their functional ingredients in this part of the world, says Paul Coussement, Ir., its director of sales and marketing and regulatory affairs.
In Asia, the company is concentrating more on calcium rather than the low fat or low calorie claims, as was their strategy abroad. People in Asia do not have a weight problem as they do in the West, it said.
And to capture more market, companies like SKW Biosystems Asia-Pacific and Palsgaard Asia Pacific Pte Ltd had launched functional ingredients like pectin supplements and heat-stable emulsifiers, respectively. Gerald Dard, managing director of SKW Biosystems Asia-Pacific said the pectin supplements, introduced in Japan, were promoted as a cholesterol reducer.
Also, Global Palm Products Sdn.Bhds, a subsidiary of the J.C. Chang Group, has launched carotino a functional edible oil for consumers in 1998. The product, rich in natural carotene and Vitamins A and E is a cooking oil for everyday use, and can also be used as an ingredient in products such as biscuits, bread and other bakery products where fats is an essential components.
Being cholesterol-free, and also free of trans-fatty acids, preservatives or additives, carotino represents a niche market.


Meanwhile, Asian consumers are gradually accepting foods spiked with functional ingredients like probiotics. In the past few years, probiotic cultures such as acidophilus, bifidus and L-casei have generated a lot of interest in the region, especially the developing economies, due to their abilities to aid digestion, displace harmful bacteria in the colon and promote regular bowel movement. This may help to prevent colon cancer, one of the top cancer killers in developed countries.
Probiotics, which were traditionally used in fermented products like cultured milk drinks or yoghurt, are more and more being utilised in non-fermented products. For instance, Nestles new Neslac (for the one-year old onwards) now contains bifidus.
Interest in this area has also led to a possibility of incorporating probiotics in non-dairy foods, beverages, non-fermented milk and dairy supplements.
Apart from health and marketing reasons, incorporating cultures in certain products help lower production costs.

Challenges ahead

1. flavour enhancers to mask offensive smells in vitamins or minerals

Ng of Borregaard South East Asia says the challenge now is for researchers to develop technologically innovative products with new formulations to meet demands in functional products.
There will be an increase in the need for flavourings such as vanillin/ethyl vanillin, as a flavour enhancer to mask certain offensive smells that are apparent in some vitamins or minerals, or to compensate the loss in profile as a result of less sugar, cream or fat, she adds.
One market Ng says should not be ignored is the ageing segment. Food processors should constantly come up with food products that not only offer nutraceutical benefits, but also stronger tastes and aroma. The category of ageing consumers will need stronger and tastier food products, as the sweet and salty senses in elderly people tend to degrade faster.
It would thus be a challenge for ingredient companies to overcome the chemical hurdle involved in finding new replacers for common salt and sweetness, and to discover new ingredients that can produce flavours that are linked to the four taste senses.

2. Adding values to basic food staples

Jean Chew, technical expert for human nutrition and health at Roche Vitamins Asia Pacific, pointed out one way to expand the demand for functional foods - by adding value to basic food staples like rice, flour and noodles. And although manufacturers and consumers alike were suffering from the brunt of the recession in the past two years, and expansion of the functional/fortified food range has taken a back seat, things are expected to turn around when consumers start to pay more attention of vitamins intake.

3. Guidelines/legislation to regulate health or functional foods

There is also a need for guidelines or legislation to regulate the health foods or functional foods segment. Martien van den Hoven and Ben van Valkengoed, marketing and sales director of DMV International and technical sales manager of DMV Far East, respectively, said that countries like China and Japan have already done so. Another set of guidelines is expected soon in Korea.
With an increase in demand for healthy, functional foods, the implication for ingredient suppliers is that more information on functionality and efficacy of ingredients will be needed. As such, more clinical studies need to be done, or that results of FDA- or USDA-approved procedures are needed by ingredients customers, in order to make health claims on their products, they said.

2. Asian ready-to-eat foods

Many ingredient producers are especially optimistic about the regions convenience and ready-to-eat foods sector, as more and more Asians are turning to this segment of the market due to rapid urbanisation and work commitments.
Both John F Botellio, regional business manager and Lee Lai See, market development manager of Eastman Chemicals Asia Pacific (APFI October 1998) foresee a growing potential in processed and convenience foods in the region. Sadao Kokubo, senior manager for overseas marketing of Mitsubishi-Kagaku Foods too remained optimistic of the future of this segment.
As the food industry in the region becomes more industrialised, there is an increasing need to cater to the tastebuds of Asians.
Craig R Park, food and pharmaceutical division manager (Asia Pacific region) of AVEBE (Far East) Pte Ltd thought there remained a need to develop new ingredients that provide functionality to local texture and taste requirements.

Instant noodles

Among convenience foods, the instant noodle segment has been singled out as a potential growth sector.
Etienne Selosse, director of Rhodia Food Ingredients Asia Pacific, said that in this area, Asia leads in terms of technology, and most new developments happen in the region.
Rhodia Food, one of the worlds largest suppliers of guar gum and xanthan gum, has recently established a food laboratory in Singapore, which would work closely with its Shanghai food laboratory to carry out R&D work in instant noodles. It believed further improvements are required for this product.
Philip Ho, regional business manager for Southeast Asia, said that currently, there is a need for manufacturers to come up with a product that can withstand a longer heat treatment. Most consumers prefer the texture of instant noodle to be firm, with a good, chewy bite, but some noodles, despite their initial firm texture, become soggy in the midst of the eating period.
Another problem is oil absorption in noodles during the frying stage. Says Ho, less oil absorption not only reduces production cost, but also allows the manufacturer to have a healthier, less greasy product with a longer shelf life.
He also revealed their involvement with Singapore Polytechnic and the US Wheat Associates (where both institutions have set up the Asian Noodle Development Centre), where they hope to find out how their ingredients can improve noodles in general.
Eastman Chemicals Asia Pacific is another company that is doing more research in instant noodle products. It is conducting experiments with the customers to show them that incorporating antioxidants in their products is actually a more cost-effective strategy.
And to some western companies, the Asian customer is just as important as his western counterparts. In 1996, brand owner of Maggi Nestle created assam laksa and tom yam flavours to cater to the Asian taste buds. In 1998, German flavour house Haarmann and Reimer (SEA) introduced a brand new range of mushroom flavours for instant noodles, as it found that Asia lacks a good mushroom flavour.


Dumplings are popular items with the Chinese in Asia. While there are many such products in the market, especially China and Taiwan, AVEBE thinks that there is room for improvement where quality is concerned.
Explains the companys Park, As an example, you do not need too much functional starch nor value-added ingredients to maintain a traditional fresh (dumpling wrapper) texture. Nowadays, with industrialised production of such products, what is required is a freeze-thaw stable (wrapper). Otherwise the dumpling will split when the consumer picks it up after it has been thawed out. We believe that if the quality of Asian food is made as good as western convenience products, and is conveniently available, the demand will grow.

Ethnic sauces

Besides instant noodles, Rhodia Food is also carrying out research work on ethnic sauces. Ho explains that more ethnic sauces are being manufactured here and exported from this region to Europe.
Although oyster sauce still remains one of the most common and popular ethnic sauces in Asia, the variety of ethic sauces has expanded to include plum sauce, lemon sauce, etc.
The western world is not familiar with such products and they do not have enough know-how or information on them. We therefore need to develop our own knowledge base and concentrate on how we can better stabilise and improve the texture of Asian sauces here in Asia itself, said Ho.
Functionality of hydrocolloids in sauces (and instant noodles) includes better mouthfeel enhancement, moisture retention and longer shelf life.

3. Dairy products

As calcium becomes a vital part of the daily staple in developing countries like Thailand and the Philippines, there is good potential in the dairy sector in the region.
PH Yeoh, regional sales manager of Copenhagen Pectin, a division of Hercules Inc., said they are confident especially of Thailand, which remains a strong market, as government campaigns in recent years have successfully integrated dairy products into the peoples diets. As such, the dairy sector was relatively less affected by the regional turmoil.
Copenhagen Pectin is one of the leading suppliers of pectin to the yoghurt drink and acidified milk product sectors in the Kingdom.
Also active in the dairy industry is Danisco Ingredients, which acquired British flavour house Borthwicks in 1997. In Asia, their products are applied to acidified milk, yoghurts, dairy desserts and ice cream. Annual growth, according to the company, has been 2 digits.
Philip Ho of Rhodia Food expected the market to be even more segmented and specific in their target audience.
You have already witnessed a lot of segmentation going on in the dairy industry. Ten years ago, the market has probably one type of milk powder. Now you have several types, one for expecting moms-to-be, another for after-birth, and a whole range of follow-on formulas for children. The food processing market will be more defined in the coming years as the consumer has more spending power, becomes more educated and sophisticated, he says.
Martien van den Hoven and Ben van Valkengoed of DMV also thought there are plenty of opportunities, since dairy products like milk, yoghurt, cheese and ice cream are gaining popularity in Asia.

Calcium-enriched products

As Asians become more aware of the importance of calcium in their diet, food manufacturers in the region are offering juices, biscuits, bread, milk, milk powders, etc., food products that are fortified with calcium to their marketing advantage.
Frank Systermans, market development specialist (food) from Purac Far East Pte Ltd said that many consumers and processors are looking into what is happening in the States and Europe, and consuming enough calcium in your diet is the most important message now.
The consumption growth of calcium enriched juices in the States, according to Systermans, is 35 percent, as opposed to 3 percent in regular juices. This message is especially applicable to Asia, where demand for sports drinks, energy drinks and Asian-style soy milk are recording commendable growth.
In North Asia, such as Korea, Japan and Taiwan, there is already a big market for clear, non-carbonated calcium water.

4. Lite products

The lite segment, which used to be a purely Western concept, is now apparent in many Asian countries, albeit at different levels of acceptance.
Mike OMahony, Director of Kelco Biopolymers at Monsanto Singapore Co., said that many beverage producers in Asia are reducing sugar in their product formulations. This partial sugar replacement, he says, or what was called mainstream product improvement, is definitely the next in-thing in the region.
The Monsanto Company will be concentrating on strengthening its core gum and sweetener units as a result. It was also working on a milk beverage featuring the high intensity sweetener aspartame.
Koichiro Inoue, board director and chief representative of the Singapore office of Mitsubishi-Kagaku Foods also sees a rising demand for sugar-free food and beverage products. He cited the growing concern for diabetes in Asia as the main reason. More people are cautious about having too much sugar in their diet. In Thailand, some low-calorie foods have already been introduced, he says. The company is currently waiting for approval from authorities in Southeast Asia on the sale of its low-calorie bulk agent, erythritol.
Anne Jonkhans, managing director of Purac Far East, and Iwan Blankers, regional sales manager, are also confident about this segment of the market. For us, if people are interested in a beverage that is sugar-free, then it is clear that the lite food segment will take off. Lite beverage will be the trend indicator. This means that they are ready to consume low fat, low sugar foods (APFI Jan/Feb 1998).
Purac produces Lacty, which is a trade name for lactitol, a crystalline polyol derived from lactose. Containing 50 percent less calories than sugars, this non-hydroscopic low calorie bulk sweetener can be applied to chocolate, ice cream, candies, baked goods, chewing gum, and hard panning.
And although going lite is now the trend, most Asians are still not used to consuming low fat, low sugar products. However, Mahony expected their receptivity to functional foods to eventually translate into an interest in products with less sugar or fat.

Low interest for fat replacers

However, some ingredients for the lite segment are finding lukewarm response in Asia, one being AVEBEs range of fat replacers, which include Paselli Excel, Paselli SA2 and Paselli D-Lite.
Gerard Klein Essink, technical manager at AVEBE (Far East) said that they had introduced fat replacers for ice cream, meat and sauces in Asia, with ideas from Europe, but as was probably the case for many other producers of fat replacers, consumers are not ready yet, he said. Nevertheless, some suppliers like Kerry Ingredients was promoting their fry shield system into the Asian region, with the first sales in Malaysia.
Essink said their application work in Asia is mainly concentrated in noodles and Asian convenience foods. The low-fat concept is already applied by customers via the marketing of air-dried noodles and chilled, long-life and frozen noodles. He told APFI that noodle producers are eager to reduce the oil content in instant fried noodles, both to make their products healthier, as well as to reduce costs.
James Zallie, business director for starch in Asia Pacific, National Starch & Chemical, while admitting it to be a niche segment, says that small to medium manufacturers may still want to carry such products because of the high profit margins. The company played a big role in developing fat replacers or mimetics in the west. Their N-Lite range of fat mimetics has been used in cakes, dressings and sauces, dairy desserts, and low fat dry mixes.

The future ahead

Of the future, Edison Chan, regional director of Kerry Ingredients says his company will venture into the niche markets like low-fat ice cream. They already have milk protein isolates that allow one-third fat reduction. The other area he foresees burgeoning growth is finger foods, or fast food, where the products are deep-fried with a lot of oil. He expects their fat shield system to come into use in this aspect. Their first markets were Malaysia and the Philippines.
Although actively promoting the fat shield system, Chan says they are not specifically targeting the low fat category as such because the market is still small. The situation for High Intensity Sweeteners (HIS) is similar.
Others have identified growth occurring within certain demographic groups of a country. For instance, in the Philippines, an interest in diet soft drinks is growing in the younger age bracket, predominately among the women. But Mahony admits that, on the whole, it will take some time before there is any substantial growth in the region.

5. Beverages

Tea, coffee and alcoholic products, as well as fruit juice are some of the sub-sectors to look into in the next few years.
The Beverage Ingredients group recently opened a sales and marketing office in Singapore, supplying enzymes and yeast for this industry.

Tea beverages

An existing but nonetheless exciting segment is tea beverages, which continues to burgeon with new concepts and flavours. Silesia Flavours, a relative newcomer to the region, is banking on this segment despite manufacturers cautious approach to new product launches.
Managing director of Silesia Flavours South East Asia C. David Cribb maintains that judging from the popularity of the product, it is no time to halt investments despite the fact that many processors are now holding back on product development due to uncertain economic situation.
He deemed this industry to be very big in Asia, where there are a lot of innovations. In Singapore, there are at least five or six different companies manufacturing tea products. The shelf space for tea products is also not small.

Convenience coffee beverages

One other attractive beverage segment is convenience coffee beverages. According to Ing. Rick Kirpestein, business development manager of Kievit, specialists in spray-dried fat filled food ingredients for instant products, the proliferation of coffee chains such as Starbucks, Coffee Club, Coffee Bean and Burkes Coffee recently has created a coffee culture - and fuelled demand for coffee products in the retail outlets as well.
However, though there are several good 3-in-1, 2-in-1 or even 5-in-1 coffee products, few good instant cappuccino drinks are available on the market. Kievit wishes to bridge this gap by introducing its foaming cappuccino into the region.
The same trend in coffee products is observed by Koichiro Inoue of Mitsubishi-Kagaku Foods Corporation. Since the economy started picking up this year, consumers and manufacturers are steadily regaining their confidence. In Singapore, for instance, a number of premium products have already been introduced, he says, predicting this trend to continue.


The total Asian market for alcoholic beverages was worth approximately US$6 billion in 1997. In recent years, alcopops represents one of the most dynamic sectors of the alcoholic beverage market.
The products hit the shelves of Southeast Asia less than five years ago, amidst an uproar from concerned parents, which eventually subsided. The new segment has since grown to include other labels, such as dv8, which is brewed in Singapore.
Alcopops have also undergone remarkable changes - in profile, character as well as a new name. It is now a full-fledged mainstream beverage called FAB (or flavoured alcoholic beverages).

Ingredients trends for beverages

Ingredient suppliers to the beverage sector need to constantly create new flavours. Pat Yang, executive vice chairman of Chia Mei Food Industrial Corp., a provider of semi-finished vegetable and fruit juice and puree, feels that the need to constantly create new flavours for beverage products can be attributed to the basic nature of the Asian people.
Western consumers do not like their flavours to change constantly, he says, with only basic juice flavours like orange, apple and grape on the market, with some pineapple and fruit punch. In comparison, there are many flavours in Asia because of different nationalities, and also because Asians like to eat and taste new flavours, he says.
One main trend for beverage ingredients is the fusion of eastern and western influences, says
Shirley Ng of Borregaard. In her opinion, the near water concept (flavoured water made of flavourings and ingredients which give flavour direction, sweetness, acidity and body), fusion drinks and fruity soya drinks with low sugar and high protein will continue to develop.
Also, there would be a demand for ingredients for traditional Asian drinks, another drinks segment that has grown significantly in recent years. Humphreys of Givaudan Roure expected to see more commercially processed, traditional drinks on the market. He foresees a lot of opportunities in researching local fruits and traditional ingredients.
However, he says it is unlikely the processors of such drinks will make use of low sugar alternatives in their applications at this moment in time.

6. Snacks

Consumers in the snacks segment are increasingly yearning for local tastes, when in the past, they look for an international taste, like cheese-flavoured snacks.
Managing director O. Nagai of N.P. Foods (Singapore) Pte Ltd, which deals in seasonings mainly for the snacks and instant noodles industries, told APFI (June 1998) that for instance, the satay taste is starting to sell well in Malaysia. In Japan, too, while flavours like garlic or tomato performed well in the short term, 70 percent of the snacks market is still dominated by the simple salt flavour.
More than 95 percent of the companys products are for export, mainly into Asia, except Japan, and the Middle East.

7. Bakery and confectionery products

Confectionery, chocolates, cereals and soya related products would be developed along functional lines. But producers will need to pay more attention to taste and aroma. The confectionery segment will see the growth of the small bite for convenience and different flavouring profiles.
In addition, chocolates that are low in sugar or even sugar-free with low calories will continue to grow.


WITH healthy prospects predicted for the ready-to-drink Chinese tea market, bev erage companies are going the distance to get themselves an even larger wedge o f the pie. The three main players - Pokka, Heaven and Earth and Yeo Hiap Seng -
in particular, have kept a high profile. Yeo Hiap Seng, for instance, tapped i ts tea-brewing expertise and bagged an innovation award for Yeo's ice green tea
at Sial (Salon International Alimentation) 2000 in Paris. The event is one of the world's largest food and beverage exhibitions. YHS' category manager, Ms J oella Yeo, says: 'Our experience in brewing tea ... has enabled us to preserve the full tea flavour in the drink without leaving a bitter aftertaste.' The hom egrown company is credited for introducing ready-to-drink chrysanthemum and her bal teas to the Singapore market in the 1950s. These two beverages are grouped under the Asian soft drink category along with others such as winter melon tea,
lemon barley and longan red date tea. Pokka, on the other hand, has introduced
three varieties of green tea to build up a larger consumer base. Jasmine green
tea and Japanese green tea made their debut here in late 1999. Peppermint gree n tea was introduced early last year. F&N Coca-Cola is putting its money where
its mouth is. To realise its target of generating about $30 million this year from Heaven And Earth, it is investing $3 million this year to market the brand
aggressively. To keep the buzz going, it also launched a new variety, Mandarin
orange, last month. And with three more new flavours brewing this year, the co mpany hopes the brand will stay fresh in consumers' minds. Rather than focusing
on the drink alone, the company is also selling a lifestyle in its advertising
spiel with the tagline: Discover a moment of inner peace. Says Mr Darren Marsh all, F&N Coca-Cola Company's regional marketing director for Singapore and Mala ysia: 'People today are so busy and stressed, they want a moment of inner peace. The light taste and aroma of Heaven And Earth offer that by calming their sen ses.'.

Source: The Straits Times



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 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.


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 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 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.


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.



19Jan2001 F&B takings up 3.8% in Jan-Nov.

NOT only were there more visitors to Singapore last year, they also spent more on food and drink, according to a study by Hospitality Asset Advisors (HAA).
In its monthly report on local hotel trends, the hotel consultancy group says guests spent 3.8 per cent more eating and drinking in the year to November. It found F&B revenue per guest rose from $30.93 in the first 11 months of 1999 to $32.10 in the same period last year.
HAA's survey of selected hotels in Singapore also found guests spent more on food than drink. Beverage revenue as a share of total F&B revenue dipped from 19.7 per cent in the first 11 months of 1999 to 19.5 per cent in the same period last year.
The record 7.6 million visitors to Singapore in 2000 helped boost average hotel occupancy to 83.2 per cent in the year to November - a 76.9 per cent jump from the previous year.
Hotels in Chinatown and the business district saw the greatest improvement in occupancy, putting on 12.4 percentage points to 82.8 per cent. Those in the Dhoby Ghaut to Marina Bay stretch chalked up a 9.5 percentage point rise to 84.5 per cent. And Orchard and Tanglin Road hotels saw occupancy climb 4.5 percentage points to 82.4 per cent.
With better occupancy, hotels also commanded better rates. The average room rates rose 10.1 per cent, from $121.39 to $133.70. Hotels in the Orchard and Tanglin area were most expensive, followed by those in Dhoby Ghaut to Marina Bay area and finally, the Chinatown and business district.

19Jan2001 China meat producer gets in-principle nod for S'pore listing.

CHINA-BASED United Food Holdings has received in-principle approval to list on the main board of the Singapore Exchange.
The company, which operates out of Shandong, is involved mainly in the production and sale of meat and meat products, and also makes animal feed. It rears its own pigs and has an ISO 9002 certified abattoir.
"Our integrated business model ensures a reliable supply and tighter quality control of raw materials," said chairman David Yip. "This enables us to better meet market demand for high-quality products."
The group's Jiangquan brand of processed meat products is sold to food processing companies and retailers throughout China.
The focus is clearly on the domestic market, which accounts for more than 90 per cent of revenue. But products are also exported to Russia, Ukraine and Brunei.
Asked why he had chosen to list in Singapore, Mr Yip said: "We are unable to list in China because our firm has been registered in Bermuda, and is considered a foreign firm. (Also), I feel Singaporean investors have a much better understanding of the food industry."
The group plans to launch its IPO within two months. Mr Yip said of the timing: "We are in a strong financial position...we will launch whenever we are ready."
The group has no debt, so proceeds from the IPO will be used to expand the business. Net profit in 1999 came to $33.1 million on turnover of $211.4 million.
Compound annual net profit growth from 1997-99 was 44.8 per cent.

16Jan2001 Bernas takes 30% slice of Gardenia from Singapore's QAF.

Hot on the heels of its tie-up with food-based Dewina Bhd group last week, Padiberas Nasional Bhd (Bernas) has formed yet another strategic alliance with Singapore's leading food manufacturer and distributor QAF Ltd.
Bernas yesterday signed an agreement to acquire a 30% stake comprising 5.14 million shares in Gardenia Bakeries (KL) Sdn Bhd for RM54.81 million.
The shares are being bought from Ben Foods (Malaysia) Sdn Bhd, a 100% owned unit of QAF, a leading food manufacturer and distributor in Singapore, which will hold the remaining 70% stake in Gardenia.
Bernas has also signed a memorandum of understanding with QAF to explore further joint venture opportunities relating to the food industry in Malaysia as well as overseas.
Bernas group chairman Datuk Seri Mohamad Noor Abdul Rahim told reporters that potential investments may involve flour milling and the manufacture of biscuits and related confectionery.
"We are looking at developing further downstream and upstream activities in the food sector," he said after the signing of the sales and purchase agreement for the Gardenia stake yesterday.
"Such projects would capitalise on the know-how, expertise and operational structure of the two parties which would benefit the new products."
The investments and partnership with QAF are in line with the group's long-term strategy to strengthen its distribution network, Mohamad Noor added.
"Gardenia has a strong brand play and distribution network," he said.
"The alliance would enable us to move forward and be more competitive in the globalised world when the market opens up."
Bernas, which has ventured into other activities including packaging, transportation and engineering, intends to be an integrated food distributor.
Gardenia (KL), with a paid-up capital of RM17.14 million, operates four plants in Malaysia - two in Shah Alam and one each in Puchong and Johor Baru.
Its products are marketed through 12,500 distribution points and will complement Bernas' network of over 17,000 retail outlets.
QAF group managing director Tan Kong King said the existing plants are already running at full capacity and the company is in the process of constructing its fifth factory costing RM47 million at Bukit Kemuning in Shah Alam.
The new plant is expected to be operational by the third quarter.
According to Tan, Gardenia sells more than 200 million loaves of bread, cream rolls and snacks per year and commands 55% share of the bread and bakery market.
It chalked up a turnover of RM200 million in 1999.
Tan pointed out that QAF group can also tap on the expertise of its parent, Indonesia's Salim Group which is one of the largest manufacturers of flour and instant noodle in the world. Salim owns 47% of QAF.

13Jan2001 Safe to consume beef in S'pore, says minister.

IT IS safe to eat beef and beef products in Singapore. National Development Min ister Mah Bow Tan said this yesterday, in reply to a question on the danger of the mad-cow disease entering the food chain here. The Agri-food and Veterinary Authority (AVA) and the Environment Ministry's (ENV) Food Control Department ha ve taken steps to ensure that the food supply here is free of the disease known
officially as Bovine Spongiform Encephalopathy (BSE), he told NMP Goh Chong Ch ia. Only countries certified to be BSE-free for at least six years can export b eef and food containing this meat directly to Singapore or through third countr ies. The items allowed include beef sausages, instant noodles, gelatin, canned beef and beef soup stocks. The six-year ruling is based on BSE's incubation per iod of up to five years in cattle. AVA checks incoming consignments of beef and
beef products, and works closely with the Customs and Excise Department to pre vent smuggling, Mr Mah said. Regular checks on retailers by ENV ensure that pro cessed food containing beef or its ingredients are imported only from BSE-free countries, he noted. AVA and ENV will continue to monitor the situation around the world to prevent the disease from entering Singapore's food supply, he added.

12Jan2001 QAF in China joint venture.

QAF Ltd said its wholly-owned subsidiary, Singfood Investment Pte Ltd, has entered into a joint-venture agreement with East Rise Holdings Ltd to set up Fujian Dongjia Feeds Co in China. The incorporation of Fujian Dongjia was recently approved by China's Ministry of Foreign Trade & Economic Cooperation. The new company, which has a registered capital of US$2.1 million (S$3.6 million), processes and deals in various types of animal feeds (including soya-based feeds). Singfood will own 50.1 per cent of Fujian Dongjia with East Rise holding the rest. The investment in Fujian Dongjia by Singfood Investment is not expected to affect the group's earnings per share for the current financial year.

(c) 2001 ResearchBox.com Pte Ltd. All Rights Reserved.


12Jan2001 Guinness Anchor invests RM50m on new line.

The recent increase in taxes on beer may be affecting Guinness Anchor Bhd.
Even so, the brewery is going ahead with a multi-million ringgit plan to boost production capacity.
Its managing director Terry Challenor said that following the higher sales tax on beer imposed by last year's Budget, the market is "expected to be soft".
"We will have to wait until after the Chinese New Year and the end of our financial year in June 30, 2001 to measure the impact of the tax on us," he added.
"At present, Guinness Anchor commands a 54% share of the beer and stout market in Malaysia," Challenor said after the launch of its new bottling line yesterday.
Guinness Anchor is putting up a new RM50 million bottling line to boost production. This is part of the company's five-year RM100 million capital expenditure investment programme.
Challenor said the expansion would be internally funded.
The new bottling line, which was launched yesterday by the Minister of Human Resources, Datuk Fong Chan Onn, is expected to raise productivity from 3,057 hectolitres to 4,080 hectolitres per employee.
The new line has a production capacity of 50,000 pints or small bottles per hour.
Challenor said, "with the new line, we could produce a total capacity of 1.3 million hectolitres a year".
He said Guinness Anchor's total production per year, based on consumer demand, is 500,000 to 550,000 hectolitres of lager beer and 400,000 hectolitres of stout.
Guinness recorded a net profit of RM21.9 million for the first quarter ended Sept 30, 2000 compared to RM8.7 million for the corresponding first quarter in 1999.


Bernas Dominals Sdn Bhd, a wholly-owned subsidiary of Padiber as Nasional Bhd (Bernas) today signed an agreement to buy a major stake in a noodles manufacturing company, Rasayang Food Industries Sdn Bhd.
Bernas chairman Datuk Seri Mohamad Noor Abdul Rahim said Bernas Dominals will buy a 50 percent equity stake in Rasayang for nearly RM3.5 million.
In the first place, Bernas Dominals will buy a 43.45 percent equity stake in Rasayang for RM2.658 million, he said. At the same time, Bernas will pay RM800,000 to subscribe for the entire issue of 800,000 new shares in Rasayang at the nominal value of RM1.00 per share.
"In three years' time, Bernas Dominals will obtain the opportunity to buy another one percent of Rasayang shares to raise its shareholding to 51 percent," Mohamad Noor said at the agreement signing ceremony here.
He added that, under the agreement, Bernas Dominals will also supply crushed rice (beras hancur) to serve as the basic raw material for bihun (rice-noodle) production.
At the same ceremony, Bernas also signed a three-way memorandum of understanding (MOU) with Rasayang and Dewina Trading Sdn Bhd, the maker of the Brahim brand of pre-cooked food.
"This MOU is aimed at establishing a network of distribution outlets for the are more efficient and effective marketing of food-based products under the Bernas trading network," he said.
At present, the distribution network of the Bernas group consists of some 17,000 out of 37,000 retail shops, supermarkets and hypermarkets in the country.
Ahmad Fuad Abdul Wa hab, Bernas's deputy group managing director for corporate services and other business, said that Rasayang had gained a 12 percent share of domestic market for rice-noodles.
The company was expected to raise the level of its market share to 30 percent within the next one to three years through its operation under the Bernas marketing network.
He added that Rasayang was currently in the process of raising its daily production capacity from 23 tonnes to between 25 and 40 tonnes.
Rasayang w as also in the process of producing instant rice-noodles and instant wheat-noodles (mee segera dan bihun segera) in the near future for marketing and distribution in the local region. This objective was expected to be achieved by early next year.
Meanwhile, Dewina Trading's general manager, Dr Baharudin Kadir, said the company also hoped to raise its market share through its participation in the Bernas network under the newly-signed MOU.
At present, through its network of 6,000-7,000 outlets, Dewina held a 30 to 40 percent share of the domestic market for pre-cooked food.
The deputy managing director (rice trading) of Bernas, Yahya Abu Bakar, said that Bernas planned to raise its distribution network from 17,000 outlets to 20,000 outlets within the next one to two years.
Asked about the possibility of Bernas's management structure being revamped, Mohamad Noor said it was only a matter of time before changes were made "to strengthen Kumpulan Bernas".
The revamp would only inv olve a few personnel at the top management level and was expected to be implemented early next month, he added.
On Bernas's investment strategy, Ahmad Fuad said the company's investments in the past three years has been minimal compared to those of other companies.
However, he added: "What we are actually doing is that, while everyone is slowing down, we invest because we have the capabilities. We are not (investing) beyond our capabilities: it is very much within our capabilities."
Ahm ad Fuad explained that Bernas's investments in the past three years had been in its subsidiary companies and the total for the period had not exceeded RM100 million.
Asked about the corporate performance of Bernas for the financial year which ended on 31 December 2000, Ahmad Fuad said: "The profits should be normal if one looks at the post-1995 trend as a whole, taking into account that the last year (1999) produced an unusual pre-tax profit due to the tax-holiday enjoyed by all taxpayers."

11Jan2001 Bernas to partner RSY, Dewina in food ventures regulations.

Padiberas Nasional Bhd (Bernas) has entered into a joint venture with R.S.Y. Sdn Bhd to manufacture beehoon and beehoon laksa products.
Announcing the deal this evening, Bernas said its unit Bernas Dominals Sdn Bhd (Dominals) would acquire 50 per cent, comprising 3.45 million shares, of RSY's wholly owned subsidiary, Rasayang Food Industries Sdn Bhd.
Dominals would initially purchase 2.65 million shares in Rasayang from RSY for RM2.65 million, and subscribe for another 800,000 shares in a capital expansion plan that would increase Rasayang paid-up capital to 6.91 million shares.
Bernas said the joint venture would allow Dominals to have access to Rasayang's product knowledge while benefiting from Bernas' distribution network.
Meanwhile, in separate announcements to the KLSE today, Bernas has agreed to distribute and market Rasayang and Dewina Trading Sdn Bhd's products locally and internationally.
The strategic alliance would allow Bernas to leverage its network of 17,000 retail outlets and become a fully integrated food distributor on top of being the major player in the rice supply chain.
Rasayang manufactures food products, while Dewina Trading is the sales and marketing arm of convenience food manufacturer Dewina Bhd.

(c) 2001 ResearchBox.com Pte Ltd. All Rights Reserved.


22Jan2001 Chang's rival fizzes at soda sales tactics...

After trouncing Boon Rawd Brewery in beer sales, Beer Thai (1991), the maker of Chang beer, is attacking its arch-rival on a new front - soda water.
Beer Thai wants 20% of the soda water market this year, breaking Boon Rawd's 97% hold. The market is worth about 3.6 billion baht a year, with Chang now having only 1.3%.
Beer Thai's strategy, as confirmed by its distributors, will be to "package" sales of Chang (elephant) soda water with Chang beer and other alcoholic drinks produced by the group - a move that has angered Boon Rawd.
The rival company claims that Beer Thai's marketing strategy is another blatant example of unfair trade, as Chang beer and liquor sales agents are allegedly forced to buy Chang soda water.
Boon Rawd, the brewer of Singha beer which once had a 90% share of the domestic beer market, has repeatedly accused Beer Thai of unfair trading. It says its rivals' agents are forced to buy Chang beer if they want popular white spirits and Mekhong whisky from the company.
The strategy has been so successful that Chang now claims 60% of the local beer market, while Singha beer's share has fallen to about 30% from 90%.
Boon Rawd complained to the Trade Competition Committee, which ruled in favour of Beer Thai, as there was no clear evidence that the company had forced others to take its products. Beer Thai adviser Thanit Thammasukati said the firm would start increasing sales of Chang soda water by doubling the number of agents in Bangkok.
Chatchai Wiratyosin, deputy managing director of Boon Rawd, complained that agents for rival Chang beer had to buy eight cases, up from five, of beer for every 32 bottles of white liquor they purchased. Some 10% of the total purchase had to be of Chang bottled water and 5% of soda water. But most agents threw away the water and soda water as there was no room to carry the products, he said. Some resold it to restaurants at one baht per bottle, damaging the businesses of other water producers, he said.
An agent for Chang beer in Bang Yai confirmed the percentage figures for water and soda water purchases, but added: "The company doesn't really force us [to buy them] but the products come with the beer and liquor, so it could be called forced, couldn't it?" Most Chang water and soda water could not be sold because there was an oversupply and the brand was not as popular as Singha. However, revenue from sales of Chang beer and spirits more than covered any losses.

16Jan2001 Thailand's Minor Food bullish on 2001 growth.

Thai fast food operator Minor Food Group said on Tuesday it expected revenue growth of 10 percent in 2001 versus about three percent in 2000 despite having to shut down all of its pizza outlets for a 45-day rebranding.
Minor Food will discontinue operating the Pizza Hut franchise and in place would launch its own brand, "The Pizza Company", Group Chief Executive Bill Heinecke told Reuters in an interview.
"All the 116 pizza outlets are going to be closed down from February 1 to March 17. Pizza sales, except for the 45-day period, are expected to be the same or marginally less for the year," he said.
Minor Food recently changed its name from The Pizza Company Plc. It has a slice of about 90 percent of the Thai pizza market and revenues from pizza account for a third of the group's earnings.
Minor Food settled a dispute over Pizza Hut franchise rights in Thailand with U.S. chain Tricon Global Restaurants last year.
"The new brand would be more up-market and less like a quick-serve restaurant," Heinecke said.
Minor Foods acquired two new franchises in 2000 - Burger King and Australian chain Chicken Treat, Heinecke said.
"Thailand's quick-serve restaurant market usually grows about twice the economic growth (rate). We expect the market to grow by about 10 percent," he said.
Minor Food is in the process of issuing two billion baht of bonds with a maturity of up to six years.
The company's shares were down one baht at 38.50 at 0500 GMT.



The price of Indonesian tea is likely to increase to US$2 per kg this year from an average of US$1.17 in 2000, according to a new report.
Suwadji Munawar, the president of the state-owned plantation company PTPTN VIII, said demand for Indonesian tea was growing from Europe, Australia, Middle East and Malaysia.
Munawar attributed the increase in demand partly to call from the Food and Agriculture Organization to drink more tea.
In addition, stocks owned by buyers are dwindling as auction had been stopped for the two weeks because of the year end celebrations, he said.
He said the quality of Indonesian tea mainly black tea is good.
In the first auction this year, the tea price averaged 120 cents per kg. The price even reached 190 cents for certain types like BP1 from the Arumsari plantation in West Java.
Munawar said the prices are expected to continue to pick up this year.
Indonesia with production totaling 165,000 tons a year, is the fifth largest tea producer in the world after Kenya, India, China and Srilanka.


16Jan2001 Soc Trang - $163 Mln from Seafood Exports.

The southern Soc Trang province exported 11,700 tons of frozen shrimp last year worth $163.8 million, up 45% from 1999. The province's seafood output was 48,500 tons, a 10% year-on-year increase.


12Jan2001 Amatil lifts profit and sale hopes after Philippines improves.

Australasian soft drink bottler, Coca-Cola Amatil, lifted it expectations for 2000-01 net profit on 11 January 2001. This follows a marked improvement in Amatil's Philippines business, which had experienced a severe downturn in earnings since 1997. The Philippines division is currently valued in Amatil's books at $A2.1 billion. However, it is believed that the company's chairman, David Gonski, is pushing to raise this figure higher by several hundred million dollars. Amatil said trading profit in the division will top $A100 million in the current financial year. The improvement in the Philippines bolstered hopes that any sale of the division's assets to Coca-Cola Company of the US and San Miguel of the Philippines would meet, or even exceed, the purchase price being asked for by Amatil.
(c) 2001 ResearchBox.com Pte Ltd. All Rights Reserved.


23Jan2001 Brunei - We can, says Sabli Food.

A Brunei company will enter the multi-billion dollar ready-to-eat food market in the very near future when it begins producing canned food products.
According to Awg Hj Sabli bin Hj Arshad, the Managing Director of Sabli Food Industries, his company will initially produce chicken and beef, as well as a local favourite beef rendang, that are processed and canned in this country. Currently, practically all canned food available in Brunei is imported from overseas.
A factory to handle the production process, located in Kg Serambangun in Tutong, is expected to be fully operational in March. According to Hj Sabli, the venture is intended to cater to the need of the large Muslim market that requires "halal" canned food.
Yesterday, members of the Brunei Industrial Development Authority (BINA), led by its director Awg Hj Razali bin Hj Mohd Yusof, conducted a visit to the factory site in Serambangun to check on progress, as well as see the million-dollar processing machinery already in place.
The company, well-known locally for its packed coffee and spices, among its other ventures, also has plans to turn out other types of canned food like sardines, anchovies in "sambal" (chilli), "tahai" flakes, seafood curry and more, should the initial venture with the chicken and beef curry receive a favourable response.


26Jan2001 Fish Shop goes `steak' for a different taste.

KNOWN across the country as a leading fish and chips restaurant, the Fish Shop hopes to give Bangsarians a difference from its routine fried Hoki fish.
Bangsar's Fish Shop Bistro in Jalan Telawi 2, which opened last November, serves poached salmon steaks with three special sauces to go with them - curry, caper, and anchovy.
And if cod is available from New Zealand, the home of the fish served at the shop, there will be poached cod steaks, prepared like their salmon counterparts, as well.
Restaurant director Jack Smith said each Fish Shop in the country had the flexibility to introduce fish dishes of its own, and the Bangsar shop was no exception.
He said the Bangsar Fish Shop welcomed suggestions on good fish dishes from customers, and would add them to their menu, from time to time.
"Our salmon steaks are going down well with many customers, who stop to try them daily.
"However, the standard menu dishes as fried fish and chips, mussels, oysters, squid rings and scallops remain popular."
He said they had recently added the seafood chowder, a creamy soup with tomatoes, fish, mussels and squid to the menu.
"We chose to offer soup, as no dining place can be complete without it."
Smith said the word, Bistro, was tagged on to the Fish Shop in Bangsar, as such a concept meant, an open-air cafe, which was fast becoming a hit in the hip township.
"We have plans to make our shop more than just a restaurant. Theme parties and a meeting place for specific car fan clubs will come later," he said.
At present, the Fish Shop is having a special offer for fans of fish and chips. One can get two fish and chips dishes for the price of one, until the end of February.
The offer at the 60-seater restaurant which is decorated with wall paintings of marine life, began on Jan 15.
Smith hopes to obtain educational photographs with information on marine life on the walls, at a later date.
"We have about 100 patrons daily," he said, adding that food was priced between RM2 and RM20.
Opening hours are from 11.30am to midnight. On Fridays and Saturdays, the opening hours are extended to 1am.
The restaurant can be contacted at 03-22827970.

26Jan2001 Thumbs-up for hot, spicy chicken.

DINING is best at KFC and Canteena for nine-year-old S. Thilashini.
She is all thumbs-up for KFC's hot and spicy, as well as original recipe chicken, and calls the popular recipes "the best chicken of all".
Canteena is a delight for her, as it gives good Eastern and Western food.
Chicken chops and grilled fish are excellent in the restaurant, which is patronised by Thilashini and family who live in nearby Jalan Telawi, weekly.
"I like Lotus, too, for its thosai. It is always crisp and tasty," says Thilashini.
The Sekolah Kebangsaan Bukit Bandaraya student says, while Bangsar Baru is her home, it is also a wonderful dining place.
"There is so much to choose from - Indian, Chinese, Malay and Western," she says, adding that while the food may be costly, it is worth every cent.

26Jan2001 Growing trend of people going to the Airport for coffee session.

Changi Airport is increasingly become a hip place, especially after midnight.
And some 30 percent of customers patronising its food and beverage outlets go there solely for the coffee, ever since two chains started business in Terminal 2 six months ago.
When asked why people chose to hangout at Changi Airport, most cited the spacious, clean and safe environment as the pull factor.
And they are hoping that more facilities will be added so that it can become a social hub.
One of the interviewees said: "It's a pity if you don't make use of the airport because it's so clean, with all the first grade facilities around."
One coffee chain said the improved transportation such as the SBS night service and expected MRT next year will bring in more business.
Another said if business at the airport flourishes, it is a bonus, as its aim is to build up the company's brand name.
"The airport is good to showcase our outlets in terms of international branding because we intend to expand overseas," said Ong Ju Yi, Marketing & Communications Director of Coffee Club.
24-hours F&B outlets have been at Changi Airport for a long time but only now is it becoming more popular.
Many said it is due to a change in lifestyle and besides, there are not many equally comfortable 24-hour places in Singapore.
An Airport spokesperson said they have no immediate plans to develop the airport into a social hub and that the coffee crowd was an unexpected bonus.
But the intention of the new coffee outlets was to provide more facilities for airport users.

26Jan2001 State-owned firms sought for restaurant chain.

THE Department of Export Promotion would like two state enterprises, Thai Airways International (THAI) and the Tourism Authority of Thailand (TAT), to take part in the planned Thai restaurant holding company, Global Thai Restaurant (GTR), a department official said yesterday.
Thanitta Maneechote, director of the department's service trade division, said the idea behind GTR is to promote Thai restaurants to an international market under the three brand names: "Golden Leaf", "Cool Basil", and "Elephant Jump".
GTR will run the restaurants under a franchise system, the department said.
GTR has Bt400 million in registered capital, of which 30 per cent is held by the government. The remaining 70 per cent will be offered to the private sector. The national carrier THAI and the TAT will represent the government in the GTR initiative.
However, before the idea can get off the ground the proposed restaurant needs approval from the new Cabinet, Thanitta said.
The Department of Export Promotion expects that under the franchise system, GTR will help boost the number of Thai restaurants overseas from 5,000 to about 8,000 over the next five years.
The department expects to follow in the footsteps of global restaurant giants "McDonald's" and "KFC" in expanding to an international market.
The plan to offer foreign investors franchise rights to the three GTR brands has already attracted some interest, Thanitta said.
Following the success of GTR's first road show in the US last year, US catering and fast food firms Marriott, Starwood, and AFC Enterprises expressed an interest in the Elephant Jump franchise, she said. Elephant Jump's speciality is the popular Thai fried noodle dish, Pad Thai.
The UK-based Compass Group UK is also interested in acquiring a GTR franchise, and Blue Elephant, a Belgium-based Thai restaurant operator, has shown an interest in the Golden Leaf franchise, she said.
A number of local food suppliers have also expressed an interest in acquiring the 70-per-cent GTR stake. However, Thanitta denied a rumour that the Charoen Pokphand (CP) group would be given the stake.
In the eyes of the Department of Export Promotion increasing the number of Thai restaurants overseas will boost Thailand's exports of foodstuffs and ingredients to an international market, she said.
According to department statistics, the 5,000 Thai restaurants overseas reported a combined total turnover of Bt175.6 billion in 1999.
In a separate development, the CP group recently launched its new Thai fast food restaurant, Bua Baan, and is aiming to sell Bua Baan franchises.

25Jan2001 Look Who's Going Native - `Fusion' cuisine is gaining ground in Asia, thanks to the ...

Fast Food - Look Who's Going Native - `Fusion' cuisine is gaining ground in Asia, thanks to the fast-food influence of Colonel Sanders and the Golden Arches.

TATSUTA CHICKEN marinated in sake and fried in soy sauce, topped with a lightly-toasted bun on a bed of pommes frites. Tangy spiced samosas stuffed with grilled vegetables, slightly-melted cheese and Italian pizza sauce.
They may sound oh-so-fusion chic, but you won't find them on the menu at the hottest new five-star restaurant in town. No, they're available for $3.50 and 50 cents at the McDonald's down the street if you're in Tokyo or Bombay. While shi-shi restaurateurs struggle to create the perfect meld of East and West in esoteric dishes, McDonald's and other fast-food restaurants throughout Asia have found many a localized recipe. And they're bringing fusion food to more people and doing it better than the master chefs.
"Fusion food suffers greatly because it was first introduced in the high end. People think it's just a trend, a passing fashion," says Richard Armstrong, planning director at Ogilvy & Mather in Hong Kong. "But fusion is here to stay, just look at the menus at fast-food restaurants." Armstrong led an Ogilvy & Mather team that recently conducted the largest study on food in Asia. It found that throughout the region, even in less-developed markets like Sri Lanka and Indonesia, consumers savoured tastes that were a blend of East and West, local and international.
Surprisingly, McDonald's has been particularly successful at catering to those tastes. The global giant is often criticized for standardizing tastes by serving the same burger the same way everywhere in the world. But that's far from the truth. Though the core menu - hamburgers, Big Macs, fries, etc. - is available in all McDonald's restaurants, it's complimented with an array of localized choices. Usually in Asia, about a third of the menu is made up of dishes you won't find anywhere else, like Tatsuta Burgers in Japan or Pizza McPuffs in India. In fact, the 25 McDonald's in Bombay and Delhi feature a menu that is over 75% locally-developed.
McDonald's started localizing its menu in the early 1980s before "fusion" became a culinary catchphrase. It introduced the Teriyaki Burger in 1989 in Japan and the Fried Chicken in 1988 in Malaysia. Even the good old standards like cheeseburgers and Big Macs were tweaked to appeal to local tastebuds - they don't always taste exactly the same in all the different markets. "The core concept of the product may be the same," says Steen Puggart, marketing manager for McDonald's in Asia. "But the flavour profile is different from country to country, depending on the tastes of consumers."
So in Thailand, McPork Burgers with Thai Basil are served, while in Korea, it's spicy Bulgogi Burgers. Chicken, the protein of choice for most Asians, is on the menu throughout the region - spiced up a bit in Malaysia, sweetened in the Philippines. McSpaghetti - spaghetti with Filipino ham - is another favourite in the archipelago and McTempeh Burgers, made using fermented soybean, are big in Indonesia.
But more than any other country, India has been the biggest inspiration for McDonald's fusion chefs. With a population that is mostly Hindu, the restaurant chain can't serve its mainstay - beef. So most of the standard menu had to be thrown out, down to the "special sauce" that goes into Big Macs elsewhere. Many Hindus, who are strict vegetarians, eschew mayonnaise, the sauce's main ingredient.
In place of the Big Mac, McDonald's India developed the Maharaja Mac - a mutton burger. But far more popular have been Vegetarian Pizza McPuffs, which combine Pizza ingredients with samosas, and Chicken McGrill, seasoned with mint mayonnaise and extra tangy Indian spices.
These fusion dishes have been the key to McDonald's success in India and elsewhere in Asia. Though still not profitable, McDonald's is one of the few fast-food chains to grow in India. KFC pulled out last year. "Of course it's been successful. Otherwise we wouldn't do it," says Puggart.
Tricon International, which runs KFC and Pizza Hut, may have flopped in the Subcontinent but it's pushing ahead in the rest of the region. Pizza Hut has kung pao chicken toppings in Taiwan and kimchi pizza in Korea, while KFC is serving soups and dumplings in China. Not only do consumers like fusion fare, but over 85% of all KFC's and Pizza Hut's ingredients are locally bought. "So it's inevitable that we combine Eastern and Western cooking and flavours," says Tony Chen, Tricon's menu developer in China.
But it's not just global giants like McDonald's and KFC that are taking their menus to fusion. Homegrown chains like Mos Burger in Japan or Jollibee in the Philippines are creating some of the most innovative and tasty blends.
Mos Burger, for instance, took fusion burgers one step further by replacing the buns with rice in its rice burgers. And instead of beef patties, Mos Burger offers shrimp cakes and Japanese-style fried beef. Jollibee, on the other hand, serves up local noodle dishes topped with smoked dried fish bits, onion leeks, shrimp and hard-boiled eggs.
But don't expect McDonald's or KFC to be putting these types of more Eastern than Western dishes on their menus. Though they've localized their offerings, McDonald's and KFC still have an all-American image to maintain. "Consumers don't come to McDonald's to eat completely local food," says Puggart. "So we have to stay true to our heritage while catering to customer's tastes."
McDonald's and other fast-food chains in Asia are destined to walk the fine culinary line between East and West.

23Jan2001 KFC launches new blazing burger for Chinese New Year.

KFC launched its new hot spicy Double Blazing Burger to usher in the Chinese New Year. The burger is also KFC's first new product to be launched this year.
The burger consists of two succulent, hot and spicy chicken fillets, fresh lettuce, mayonnaise and is spiced up with the new Thai Chilli Sauce.
"I think our hot and spicy Double Blazing Burger will be a must try for burger lovers during this festive period," said Mr C.K. Tan, Managing Director of KFC (East Malaysia), at its launch.
"When you take a bite of it, you will know exactly why we call it the hottest burger in town."
"I think that it is going to be a great Chinese New Year hit," Tan said. "We always respond to the voice of the customers who are looking for high quality, tasty, affordable meals.
"KFC already has a selection of burgers including the "Zinger Burger" and the "Deli Burger" which are firm favourites. The Double Blazing Burger will add to the meal variety."
"We want to show them that they get not only the best fried chicken at KFC restaurants but also the hottest and spiciest burgers in town. Nobody has come out with such a burger concept before," added Tan.
The Double Blazing Burger is now available at all KFC outlets throughout Brunei at $4.50 a burger.

19Jan2001 Supermarkets Expand Operation.

Almost all supermarkets in Ho Chi Minh City are investing in expanding their operation to attract more buyers.

The Mien Dong Supermarket, one of the biggest in the city, has spent VND28 billion ($1.92 million) in expansion and the Maximark, VND40 billion ($2.75 million). The Co-op Mart chain is also planning to open branches in Hanoi and southern Can Tho province this year.

Market observers said the shopping demand of consumers in supermarkets is increasing significantly from several hundreds people a day in past few years to 4,000-5,000 currently. The Mien Dong alone receives up to 20,000 buyers/day with the average billing coming up to VND100,000-200,000 each. However, they said, the appearance of the newly-licensed German Metro and the US Associates Grocers, the two world's leading goods wholesale suppliers, will surely make a turn point in the supermarket business in the city as well as throughout the country.

The Saigon Agriculture Corp (SAI) is now waiting for a license to build a four-hectare agricultural service trade center. The center will sell agro-forestry products and seafood and seeds and farming techniques. Total capital for this four-year project is estimated at VND40 billion.

16Jan2001 Thai Rak Thai may amend law to help Thai retailers compete with foreign companies.

A top Thai Rak Thai party official said consideration would be given to protecting Thai retailers against competition by large foreign-owned businesses. He said the Alien Business Act may have to be amended to put a limit on the extent to which the retail sector is liberalized.
Small and medium-sized Thai retailers have complained that large foreign-owned retail operations such as Lotus and Carrefour are driving them out of business because they cannot compete. Under the administration of Prime Minister Chuan Leekpai, the retail sector has undergone liberalization in accordance with the requirements and rules of the World Trade Organization (WTO).
However, the Thai Rak Thai official did not specifically say what would be done, nor did he say when the Alien Business Law would be amended.



The Indonesian government Wednesday said it imposed a luxury tax ranging from 10% to 75% on 41 items of imported consumer goods effective early January.
The Finance Ministry said it has imposed a 10% luxury tax on beverages and small-sized televisions and refrigerators, a 20% tax on refrigerators with capacity above 230 liters, sports equipment and toy products.
Commercial vessels and other water vehicles and medium-sized television units will be taxed at 30%.
The ministry said it will impose a 40% tax on alcoholic drinks, leather products, power boats and video games.
A 50% tax will be imposed on imported commercial helicopters and airplanes, golf clubs, pistols, and large-sized television units.
Alcoholic drinks with between 26% and 80% of alcohol proof and all goods made up with jewels, and yachts will be taxed at 75%.


Almost 99 percent of Indonesia's vanilla products exported through Bali, find their way to the United States, head of Bali plantations office Nengah Sriana said Friday.
The smooth export to the US markets shows that Indonesia's vanilla products are known among US consumers, she said.
She said the vanilla exports in 1999 stood at 98 tons, 9 tons which were produced by local farmers, worth US$1.6 million.
Vanilla exports to the US in 2000 was recorded at only 10 tons worth US$335,000 due to a disease that hit some plantations.


Indonesia will require all imported flour to carry 'halal' certificates, meaning the product is fit to be consumed by Muslims, Trade and Industry Minister Luhut Pandjaitan said on Friday.
"The government has agreed that all imported flour must have a halal certificate in a bid to protect local customers," Pandjaitan said. He gave no timeframe.
Indonesia imported 500,000 tonnes of flour in 2000.
Flour is a basic ingredient for noodles, which are one of the country's staple foods.
The issue of 'halal' products has become sensitive in the world's most populous Muslim nation.
The local unit of Japanese taste enhancer Ajinomoto Co Inc recently had to recall its products after a government-affiliated Muslim organisation said the products were not fit to be consumed by Muslims.


Thailand has removed 100 items which were previously on the general exclusion list, which will result in the products' tariffs slashed to a maximum of 20%. Previously, tariffs for some of the products were as high as 60%. By 2003, Thailand will slash the tariffs for the 100 items to a maximum of 5%. Among the products which will see their tariffs slashed are: alcoholic drinks, tobacco substitutes and cigarettes. Separately, Singapore has shifted 120 products from the general exclusion list to the inclusion list, effectively slashing their tariffs to nil. Among the products which have been placed on Singapore's inclusion list are: passenger cars, motorbikes, beer, petroleum products, whisky and seasonings. The move by Singapore and Thailand will see both countries no longer having any items on the exclusion list. The move is in line with the Southeast Asian free-trade pact.


The cabinet has directed an immediate ban on beef imports, beef-related products, and feedmill containing cattle extracts from European Union (EU) countries, following the spread of the mad cow disease there.
The 16 countries affected by the temporary ban are Britain, Ireland, Belgium, Denmark, France, Germany, the Netherlands, Portugal, Spain, Sweden, Italy, Austria, Finland, Greece, Luxembourg and Switzerland.
Health Minister Datuk Chua Jui Meng said the ban follows a World Health Organisation (WHO) warning to all countries on the spread of bovine spongiform encephalopathy (BSE), commonly known as mad cow disease.
So far, 180,000 head of cattle have been infected with BSE. Its brain-wasting human form, variant Creutzfeldt-Jakob disease (vCJD), has infected 87 people in Britain, three in France and one in Ireland, he said.

Chua, who earlier attended the Pan Malaysian Pools Festival Charity Programme 2001, said the prohibition will continue until "WHO assures us that the products are safe for consumption".
He said a temporary ban had to be imposed to ensure that local livestock are safe from BSE, and Malaysians from vCJD.
The ban on feedmills containing meat and bone-meal taken from cattle in the affected countries is for the cattle industry and all animal husbandry industries, including fish, chicken and goats.
Chua said the self-replicating protein, thought to be the cause of BSE, is so stable that it cannot be destroyed by deep freezing, drying and cooking.

He said that for the first 10 months of last year, Malaysia imported RM11.08 million worth of beef and beef-related products from the EU, which represents 2.58% of total imports.
Most of the products are from India, Australia and New Zealand.
"A task force comprising the International Trade and Industry Ministry, the Veterinary Services Department, the Malaysia External Trade Development Corp, customs, the Health Ministry and the private sector, has been set up," he said.
"It will ensure that the products are off the shelves, as well as request Universiti Sains Malaysia to source for the technology to identify BSE in order to prevent local cattle from being infected."
Chua said the recalling of products started a few days ago, and the ministry's food quality control division is monitoring the situation. A BSE hotline (03-2555943) has also been set up.

The Malaysian Retailers Association said it has not received any directive from the domestic trade and consumer affairs or the health ministries to list the banned products.
A month ago, the Consumers Association of Penang urged the two ministries to ban meat and meat products from BSE-affected countries.
It said it will notify retailers to remove the products from the shelves only after receiving a directive.
It warned of the spread of the "mad cow" disease in Europe and that a ban had been imposed by France and Britain on meat and bone-meal in livestock feed as a precautionary measure.Asked if the Domestic Trade and Consumer Affairs Ministry will help ensure that the products are off the shelves, Chua said he will ask the task force to bring them in.


The Indonesian Muslim Consumers Foundation (YLKM) has called for the establishment of a national standardization agency to issue halal certificates indicating that a product is fit for consumption by Muslims.
YLKM chairman Bambang Sabar Irawan said on Wednesday that such an agency could reduce irregularities in the issuance of certificates, which is at present solely handled by the Indonesian Ulemas Council (MUI).
Bambang also questioned MUI's credibility in assessing whether or not a product or service is halal or haram (not allowed according to Islamic law) as it does not have an independent laboratory.
"MUI does the auditing, while the labeling itself is in the hands of the Ministry of Health. It has happened many times that a business has concocted the audit result and deceived the council in order to get a halal label for its products.
"So it's necessary to reform the system, mechanism and the regulation on certification," he told a media briefing as he announced the foundation's plan to sue taste enhancer producer PT Ajinomoto.
YLKM's lawyer Maheswara Prabandono from Warens and Achyar Law Firm said that the foundation was demanding that the company pay punitive damages to Muslims.
Ajinomoto taste enhancer was recalled after the MUI questioned its production process which uses an extract derived from pigs instead of from cows to develop an enzyme needed in the manufacturing of monosodium glutamate (MSG).
Islam forbids the consumption of pork or its byproducts.
He said that since the company had begun using the enzyme before renewing its product certificate, Ajinomoto had violated Consumer Protection Law No. 8/1999.
"In our opinion, Muslims have been deceived by Ajinomoto," he said, adding that the lawsuit would be filed next week.
Bambang said he money would be used to establish an independent laboratory to ensure that a product was edible or could be used by Muslim consumers.

Source: Reuters News Services and various news reports.

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