The new €800,000 plant is expected to lead to considerable savings for the Danish ingredients firm that has up to now been supplying the market from facilities in Italy, Denmark and India, involving higher sourcing and freight costs.
"A transition from homemade to ready-to-eat meals is underway, requiring the Chinese food and beverage manufacturers and their suppliers to change accordingly. This is why we have chosen to focus even more on our activities in China," said Grace Xu, general manager for Chr. Hansen China.
China food industry sales took off in the mid 1990s rising from under 100 billion yuan (€9.2bn) in 1991 to well over 400 billion yuan (€37bn) just ten years later.
Driving the market is the increased spending power and changing eating habits of China's 1.3 billion people who are transforming the country's food sector, both domestically and in foreign trade.
Foreign brands of soft drinks, yoghurt, sausage, crisps, breakfast cereals, jellies, wine, and other foods and beverages comprise about 5 per cent of products in Chinese supermarkets, but many of those products are also manufactured with local ingredients, claims the US department of agriculture.
And international food ingredients suppliers need to break into the local market in order to effectively compete.
"The main driver in China is the agility and flexibility we will have to serve the local market," group vice president Jan Boeg Hansen recently told FoodNavigator.com.
An example of which is rooted in new opportunities for sales of food colours specifically designed for the Asian market, "using traditional plant extracts that are not on the market in Europe," continued Hansen.
"These food colours have been traditionally used in China, but do not figure in European markets. The fact that we have a facility in China means we can source the local materials to produce the food colours to feed this local market."
Among these, Chr. Hansen will now have the possibility of producing monascus, used for centuries in the China food industry and other traditional Chinese food colours, such as the red lac colour derived from the insect laccifera lacca.
Chr Hansen took the first key steps into China last year, employing a sales force with offices in Beijing to start building up the local market. It will be, "to my knowledge, the first international natural colours player with production facilities in China," according to Hansen.
The new factory is located in Tianjin in the economic development zone, Teda about 120 kilometres southeast of Beijing.
And the facility can start to recuperate some of the costs made in the previous year that saw the firm sourcing and supplying colours from the outside but selling the product on at local, reduced, Chinese market prices.
Food applications targeted will include yellow fats spreads, confectionery, and beverages, commented Hansen.
Future developments for the firm in China could bring small blending processing facilities dotted around the country. "Obviously, the most important aspect of this venture is to be where our clients are so that we are able to deliver locally manufactured products of global quality at competitive prices," concluded Mogens Riber-Nielsen, regional vice president of Asia Pacific & Middle East for Chr. Hansen.