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Showfloor blog: FI Asia-Thailand

Supply chain shocks driving Asian food producers to western quality

By Shane Starling in Bangkok , 13-Sep-2013
Last updated on 16-Sep-2013 at 00:18 GMT2013-09-16T00:18:52Z

"[Asia sees] European suppliers as being all about quality so it puts us in a good place right now...”

The non-Asian ingredient supply sector is fairly well represented here at Food Ingredients Asia-Thailand in Bangkok, but given current concerns about food supply chain security in the region, is probably still under-represented. Which is surprising…

The likes of BASF, DSM, Naturex, CP Kelco, DuPont, AAK, Ingredion, Ingredia, Roquette, Lonza, Nutrinova, DMV and Doehler are here, but there are many that are not, and given what those present have said, the absent may want to rethink their Asian show policies.

Take Swedish supplier AAK, which told us it has received untold interest at the 3-day show for its infant formula fat blends from Chinese and other Asian manufacturers of infant foods and formulas.

“In the wake of the recent scandals around infant formula they are looking for quality and they see European suppliers as being all about quality so it puts us in a good place right now,” a spokesperson told us.

“And they are prepared to pay for it.”

Others mimicked these sentiments and not just in infant formula. Stevia was another sector where a battle appears to be being waged between players whose 'certificates of analysis' stand up, amid a cavalcade of bandwagon jumpers for whom quality control means little to nothing.

One commented: “Some of them are here at the show and we know that often what they are selling is not stevia because we have had it analysed. It is potentially very damaging to the whole sector but smart manufacturers will perform due diligence and be willing to pay for quality.”

Get what you pay for?

There is that statement again: Paying for quality. There are many exhibitors here at the show whose main point of differentiation is price and that is fair enough. But when you are not getting what you paid for – even at a low price - then that is a problem that effects everyone and none more so than consumers who at best will be getting ripped off with the foodstuffs they buy. At worst they may die or get sick if the adulteration happens to be of the hazardous kind. Which, sadly, it often is.

So it is encouraging to see the Asian food industry stepping up to ensure the quality of its products. It’s a cause that is being helped by rising incomes as disparate as that notion can be across the region and the classes within each nation. But incomes have risen, and so has interest in eating better and healthier, and this is driving some Asian players to look west for that quality assurance.

Of course the western players are responding in kind. Look at the financial statements of almost all of the major ingredient suppliers around the world and the near-unanimous truth is that the greatest growth is occurring in emerging markets, often driven by Asia. Hardly a week goes by without a European or American player announcing the opening of a new office or manufacturing facility or JV in Shanghai, Kuala Lumpur, Mumbai, Singapore or Seoul.

So it is a little surprising to not see more of them here – especially given the show’s emphasis on south east Asian nations. A lot of the expansion talk in recent years has focused on India and China and maybe the likes of Thailand and Malaysia remain a little off-radar.

With the ASEAN group that represents 10 of them becoming increasingly proactive and influential in promoting the food industry across the region, and industry growth rates often well above those of 'Chindia', the south east Asian food sector can only grow in prominence.

The good news for western suppliers is south east Asia needs them to do it…

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