China will expand fruit juice industry into other sectors
BY PATRICIO TREBILCOCK
Thursday April 28 2005
CHINA is to improve the quality of its apple juice concentrate (AJC) exports and
move into other fruit concentrates, according to Liang Gao, President of Haisheng,
a leading Chinese juice manufacturer.
Gao was attending the FOODNEWS Juice Latin America Conference in Sao Paolo,
Brazil.
Gao told FOODNEWS that Brazil currently accounts for 83% of China's orange juice
imports.
Haisheng was founded in 1996, has five production facilities and last year exported
80 000 tonnes of AJC.
As part of a long-term strategy, the company is concentrating on enhancing quality,
testing new varieties and in the long run would like to co-operate with foreign
brands to break into retail markets.
Chinese AJC output is predicted to grow by 9% this year from 487 360 tonnes in
2004.
"We see that the growth curve has started to flatten since last year. We have not
heard of new plants being built so we think it is going to be a more calm and quiet
year, " Gao told FOODNEWS.
He predicts that in the future there will be strong consolidation in the Chinese
industry, "Some companies like ours want to become bigger.
Others are small and will prefer to focus on niches but many are suffering 'growth
pains' from over-rapid expansion.
Haisheng is planning to move into other fruit concentrates besides apple.
"We will be running small trials with white grapes, red grapes, pineapples, kiwi,
strawberries and peach.
"If we are successful with small volumes and quality and prices are OK, we can go
to the market.
Strawberry and peach juices will be the first ones, " he said.
Gao added that Haisheng was keen to visit Latin American juice companies. The
Chinese industry is young and Latin American countries have more experience in
the industry. China wants to know how they operate and how they obtain higher
juice yields.
"We cannot say that we are interested in buying or doing joint ventures with Latin
American companies at this stage, " he said.
"We will have a lot of work to do in the next three years, focusing only on fruit
concentrates. The retail business is a big project, and maybe one for the future,
after the next three years.
"Currently we do not have any plans but if we were to do this we will probably cooperate with a brand that is everywhere in the world and is very successful."
At this stage, however, Haisheng is unwilling to release further details of this
project.
Gao also revealed that China will need to import at least 100 000 tonnes of frozen
concentrated orange juice annually, to meet the country's rapidly growing demand
for orange juice. China is planting its own citrus groves, but they are not expected
to produce significant juice quantities for 10 years.
More AJC exports
Maggie Xie, general manager of subsidiary Haisheng USA, showed how the
percentage of apples used for processing in China grew to the current 19% from
5.72% in 1999.
She predicts 9% growth in China AJC exports for this year and that domestic
consumption will probably also increase by close to 11%.
Data from CFNA predicts for 2004/05 a national AJC production of 565 150 tonnes,
900 tonnes of imports, exports of 527 500 tonnes and domestic consumption of 38
880 tonnes.
China is moving deeper into production of high acid juice, of the type favoured by
the European industry. This is likely to put pressure on AJC producers in Germany
and Poland.
Some high acid apple varieties have already been planted in Shanxi province but in
small quantities.
"It takes five years to get the first commercial production, so we will start to
harvest them in 2007. It is impossible to compare us with Poland because part of
our production also goes to the fresh markets and farmers cannot sell extremely
acid varieties to fresh markets. We will see in 2007 if the fruit is adequate and if
prices are competitive."