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FoodTech Report

Volume 6 Issue 2

Domestic and multinational food processors
thrive in expanding Chinese market

By Xavier Dumans, General Manager, Asia Pacific
and Mike Brodziak, Regional Director, Asia Pacific

The transition of China's economy from traditional to modern is flourishing as urban economic development draws millions of Chinese residents from the countryside to the city. For many, trips to open markets for fresh produce and to supermarkets for a wide variety of foods replace a previous lifestyle of growing, harvesting and preserving food on family-owned land.

Growing alongside China’s middle class are food processors. Urban Chinese residences are purchasing modern conveniences, such as refrigerators and freezers, and becoming interested in foods of different ethnicities. This has created a demand for new kinds of frozen foods, ready meals and quick-service restaurants. Multinational food processing companies are actively entering the Chinese market as the domestic market increases its reach.

Shanghai

Outside of the Asia-Pacific region, China is still considered an emerging market due to the low per-capita income compared with Western countries. Accommodating the distinctive needs of a country with budding technology and industry segments can be a challenge. The JBT FoodTech manufacturing facility in Ningbo caters to the different market needs in China, including food processing equipment with smaller capacities, lower costs and more focus in targeted areas.

Working within an expanding culture

The JBT FoodTech manufacturing facility in Ningbo opened in November 2006 and operates under a unique model to develop food processing solutions suitable to the needs of the Chinese market. Although China’s industries are booming, processors’ rate of production is still lower than in Europe and the United States. The Ningbo facility focuses on core operations to meet unique Chinese safety specifications and collaborates with local Chinese suppliers for equipment and machinery parts.

Many equipment solutions available through JBT FoodTech in China also were adjusted for local consumers and local processors. For instance, retort sterilizers are in demand for preserved food packed in cans or pouches, while aseptic sterilizers are installed for the pureed tropical fruit industry. However, Chinese processors prefer equipment with simpler engineered features as opposed to the highly automated versions featured in other models, which are mainly sold in mature markets.


Graphs
Source: Global Food Research & Advisory Sdn Bhd


Where processors in Europe and the United States are increasingly creating customized lines for continuous processing of specific products, Chinese processors purchase more flexible systems, such as universal coating lines to run multiple types of products per day. Demand for ADVANTEC™ Impingement Freezer/Chillers and GYRoCOMPACT® Spiral Freezer and Chillers continues to rise.

Localized market

Tyson Foods Inc., based in Springdale, Ark., U.S.A., is one of the largest chicken producers in the United States and a longtime customer of JBT FoodTech. Tyson operates two processing facilities in China that supply partially fried chicken, beef and pork products to the food service industry. On September 10, 2008, as part of its continuing international expansion, Tyson finalized another joint venture agreement involving the vertically integrated poultry operations of Shandong Xinchang Group, one of China’s leading poultry producers. Tyson utilizes JBT FoodTech equipment in its partially fried chicken plant.

Food products are exported from the United States, and local products are further processed for the Chinese market in Tyson’s Shandong location. Live production and fresh chicken processing will be fulfilled in Tyson’s new Jiangsu location. China is the second international market Tyson has entered (the first being in Mexico), but the first international market in which the company has built from the ground up.

SWS sterilizer Domestic and multi-national food processors in China show increasing interest in retort and aseptic sterilizers for the growing preserved food and pureed tropical fruit industries.

“We want to re-create our success in the United States in China,” says James Rice, vice president and country manager for Tyson in China. “China is a re-emerging market returning to its previous place in history as a world leader.”

China had the opportunity to highlight its modern capabilities when it hosted the 2008 summer Olympics in Beijing in August. Area food processors promoted their brands by becoming sponsors or food vendor partners for the Olympics; for instance, Tyson served as the beef, pork and poultry supplier for the U.S. Olympic team. The Olympics better illustrated a China that is evolving into an economic powerhouse on an international scale.

Processors, both local and domestic, anticipate a slow, steady expansion in the frozen food, processed fruit and food service market segments as China continues to modernize and consumers demand variety in convenience food.

To learn more about JBT FoodTech, visit the JBT Web site or contact a JBT FoodTech Specialist.


GYRoCOMPACT® is a registered trademark and ADVANTEC™ is a trademark of JBT FoodTech.
©2008 JBT FoodTech. All rights reserved.

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