Tetra Pak seeks greater share of growing China dairy market
liquid food packaging plant in Beijing this week, the latest step
in its bid to profit from the rising Chinese interest in dairy
The new joint venture facility, operated by Tetra Pak and its Chinese partner, Beijing Pulp & Paper Experimental Mill, cost $80 million to construct, and will allow the Swiss-Swedish company to increase its annual production capacity by some 6 billion packages.
"To meet the rapidly growing demands for liquid food consumption in China, Tetra Pak is taking active initiatives such as additional investment and production capacity expansion to support China's dairy industry and market development," said Nick Shreiber, president of Tetra Pak.
Tetra Pak has long seen the potential in the Chinese market, investing more than $200 million there since it first entered the market in 1972, and in 2002 the country became the biggest market for the European firm, with close to 7.5 billion packages sold there per year.
But it is the growth in the dairy sector in recent years which offers the best prospects. Tetra Pak said that dairy product sales in China are expected to grow at an annual rate of 15 per cent over the next five years, and with liquid milk consumption outstripping the rest of the dairy sector, the need for liquid packaging solutions will continue to rise.
Indeed, Chinese government research predicts that, by the year 2010, annual milk consumption per capita will reach 32 kilograms in the city and 7 kilograms in rural areas.
Tetra Pak has processing plants in Beijing, Shanghai, Kunshan, and Foshan in China, as well as business offices in nine Chinese cities, including its headquarters in Shanghai. The company posted sales of nearly CNY5 billion (around $600 million) in China in 2003, roughly 8 per cent of Tetra Pak's total worldwide sales.