Insider Flash: Tetra Pak To Shut Korean Plant

 Tetra Pak To Shut Korean Plant
       
Swedish food packaging company Tetra Pak has decided to close its Korean production base after 21 years.

Desmond Joseph, Tetra Pak Korea’s marketing director, said Wednesday that the Swedish head office decided to shut the plant in Yoju, Gyeonggi Province and to reduce Korean operations to just sales and marketing.

The Yoju plant told its staff of the decision on March 9 and the company is currently negotiating with its labor union over severance benefits. The shutdown is part of the company’s reorganization of overseas production bases, Joseph said, although it will continue to operate its Japanese and Chinese factories.

Tetra Pak is a multinational with 57 branches and 48 overseas production plants and 8.1 billion euros in sales in 2005. The Swedish company set up the Yoju plant in 1986 to serve parts of Asia including Korea and Japan.

Experts attribute the shutdown to unfavorable business conditions including high wages and labor problems. The Tetra Pak Yoju Union held a month-long strike in the summer of 2003.

Over the last two years, several foreign companies have shut down their Korean plants after experiencing severe labor unrest. Toy maker Lego and cellphone maker Motorola shut their factories in Icheon, Gyeonggi Province in 2005. Pharmaceutical Roche closed its Korean plant in 2006.

Tetra Pak Yoju produced 2.5 billion packaging units a year, 45 percent of which were exported to Japan. However the head office last year decided to have its Japanese plant produce all its Japan products after complaints about products from Korea.

Even after having lost the Japanese market, the Yoju plant union demanded a whopping 19 percent pay raise. Management wanted the union to promise not to stage strikes and intervene in disputes of other companies. The union rejected the proposal.

Wage negotiations began last May and ran for nearly a year without showing signs of conclusion. The union claimed that management made an issue of shoddy production exports to Japan after having already decided to close the Korean plant.

Dankook University Prof. Kim Tae-ki said that labor relations are one of the critical factors for foreign companies in reorganizing their global production bases. No company wants to risk poor production and delayed shipments because of hostile labor relations, he said.

Source: url: http://english.chosun.com/w21data/html/news/200703/200703290022.html
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Phone direct +66-2259-9954-(118)
areerat.wongsa-oun@sig.biz

SIG Combibloc Ltd.
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Insider Flash: Filling technology allows UHT milk with real fruit / China

28/03/2007 - A leading Chinese dairy firm has used filling technology from European group SIG Combibloc to create UHT milk containing real pieces of fruit.

The innovation is unique in China and on the international dairy market, according to Bai Ying, the vice-president of the Mengniu dairy firm, which has developed the new milk products with Europe's SIG.

Specialists from both firms have spent the last year working on the project, entitled 'pieces of fruit'.

Their work shows how China's dairy market is not only growing rapidly in consumption terms, but also expanding its range of products.

"SIG Combibloc's unique, flexible filling technology means we can put even chunky products in the aseptic carton packs," said Ying.

Products come in strawberry, peach, coconut and Aloe Vera varieties, and are offered in CombiblocMini 250ml cartons with a drinking straw.

SIG adapted its CFA 112-32 high-speed filling machine, which has a maximum output of 12,000 packages per hour, for the pieces of fruit project.

Markus Böhm, Chief executive of SIG Combibloc China, said: "Each package sleeve is individually shaped, sterilised and filled on the filling machines at the customer's premises.

He added that the top of each carton pack is ultrasonically sealed above the filling level - and not through the product - only after the product has been filled.

UHT milk containing pieces of real fruit may provide a lucrative new line of added value products for the dairy industry, combining consumer demands for health and convenience.

"We firmly believe that, with this development, we are offering a product concept that will bring a whole new impetus to the international UHT milk market," said Böhm.

Products will be distributed in all major Chinese cities, and aimed primarily at young women.

It was unclear whether or how soon products may appear outside of China.

Mengniu has increased its links abroad recently, however. It signed a joint venture in China with French dairy giant Danone in December.

Source: foodproductiondaily.com
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Phone direct +66-2259-9954-(118)
areerat.wongsa-oun@sig.biz

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10th Floor, UBC II Building, 591 Sukhumvit 33
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Insider Flash: Coke-L'Oreal rumours show beauty beverage potential

15/03/2007 - Beauty foods are hotting up as an area of interest for multinationals, if rumours about a Coca Cola-L'Oréal collaboration for a tea-based skin care drink prove founded.

According to press reports, Coca-Cola's Beverage Partners Worldwide division has trademarked the name 'Lumaé' for a product that will contain ingredients that can help women care for their skin.

Coca-Cola's spokespeople are coy about the development. But an unidentified source told Brandweek that the product, tipped to emerge from BPW's pipeline in 2008, that the product will be sold in department stores rather than mass-market retail outlets where Coca-Cola's offerings are more commonly found, such as 7-Eleven.

It will be aimed at "active, influential, image-conscious women over the age of 25, who embrace health and wellness".

The rumours come on the back of Danone's introduction of its Essensis yoghurt, said to nourish the skin from the inside, last month. As with Lumae, the development of Essensis was leaked to the media ahead of the launch and was the subject of much speculation.

In the past multinationals have seized upon other product development areas that started out as the preserve of small-time players, and built them up to be strong categories within the mainstream food industry.

For instance, many organic brands started out as small businesses that were snapped up by bigger companies when they reached an attractive stage of development - or the big boys have made their own way into the new area, their path smoothed by huge R&D and marketing budgets.

The same pattern may be emerging for beauty foods. A company called Borba Skin balance claims to have pioneered the skin care beverages market - at least in the US - with a range of waters that have been sold in department stores since 2005.

Beauty foods are still too new for analysts to have put a figure on market value. But Leatherhead Food International, which calls ingestible ingredients with skin benefits 'skingestibles', hosted one-day conference in London in November to discuss market drivers and opportunities for food companies eyeing this market, such as catering to consumers' self-esteem issues.

As for Coca-Cola, it has been eager for some time to build up a reputation for healthier products instead of just sugar-laden fizzy drinks. It is said to be preparing for the launch of Diet Coke Plus, fortified with vitamins and minerals.

Under its Minute Maid brand (which also boasts a heart health juice with plant sterols), the beverage giant has just launched a joint health drink containing Cargill's Regenasure non-animal derived glucosamine, which recently obtained GRAS (generally recognised as safe) status in the US.

Coca-Cola's BPW division is a joint venture with Nestlé, and the route through which the two companies launched their Enviga green tea based drink, claimed to aid weight management by burning calories.

Enviga has been the subject of controversy, however, particularly since the Center for Science in the Public Interest initiated a lawsuit challenging the scientific basis for its claims. The product was also named as one to watch in connection with the US Food and Drug Administration's consultation last year into whether more stringent regulation on functional foods and drinks is required in the American market.

Since Nestlé is a major shareholder in French beauty giant L'Oréal, it is no great surprise that Lumaé looks set to emerge from the BPW joint venture channel.

Source: foodnavigator.com
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Best regards,

Areerat Wongsa-oun
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Cluster Marketing CBAS
Phone direct +66-2259-9954-(118)
areerat.wongsa-oun@sig.biz

SIG Combibloc Ltd.
10th Floor, UBC II Building, 591 Sukhumvit 33
Bangkok 10110, Thailand
Phone +66-2259-9954, Fax +66-2259-9962
www.sigcombibloc.com

Insider Flash: Ajinomoto acquisition targets Asian supply chain

15/03/2007 - Asian food giant Ajinomoto will use its latest acquisition to leverage its Knorr brands into emerging markets.

The group recently announced that the purchase of US group New Season Foods (NSF) will give it greater control over its raw ingredients supply chain for its soup subsidiary Knorr.

The acquisition represents the type of stategy that processors are taking in response to the growing competitive pressure to reduce the cost and efficiency of their supply chains.

As a result of acquiring NSF's planting and manufacturing capabilities, Ajinomoto now has three regional supply bases for both the production and development of food ingredients.

NSF produces sweet corn powder, a vital ingredient for the Knorr's soups ranges. The acquisition represents a significant step for Knorr in maintaining a stable supply of ingredients to markets like Japan and China, the company said.

"The Ajinimoto group is moving toward global internalisation of strategic processed ingredients in the core soup business as part of its commitment to offering the most delicious foods and healthy lifestyles to people around the world," the company stated.

The strength of these emerging markets has not gone unnoticed however by Ajinomoto's rivals, particularly in the market for soup and dry products.

Unilever last month revealed it was shifting production of its dry foods ranges to its Tatura plant in Australia from the US to better supply Asian pacific demand.

The move will allow the company to make its popular international brands like Cup-a-Soup, Pasta & Sauce and other recipe mixes in the country, under the same roof as its Lipton ice tea and condiment ranges.

Source: ap-foodtechnology.com

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Phone direct +66-2259-9954-(118)
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Phone +66-2259-9954, Fax +66-2259-9962
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Insider Flash: China to lead Unilever’s Asia Pacific ambitions

08/02/2007 - Unilever, the world's second largest food company, is to increase its focus on its Chinese operations to allow the country to meet its potential as a market leader in the Asia Pacific food industry.

Speaking to the press earlier this week, Zeng Xiwen, vice president of the company in China, revealed that with year on year sales growth well into double figures, the country could replace India as the regions most dynamic market for Unilever during the next decade.

"The booming consumer spending and surging economy fuelled a strong sales performance in China," he said.
For all its potential, Xiwen revealed that China was currently Unilever's third most dynamic market in the region - trailing behind India and Indonesia.

However, despite its current position, China is rapidly gaining ground on its local rivals, last year seeing sales jump by more than 20 per cent to around €495m.

As a result the company is keen to facilitate its growing presence in the country by enhancing its administrative and production capabilities.

Unilever already houses its third largest office in the world in Shanghai, and aims to expand it by 24,000-square-metres, in a move that will almost double its capacity next year, in a bid meet demand.

"The new China headquarters will be upgraded into the regional centre of Asia Pacific, with staff and R&D people transferred here from Japan, Singapore, Australia and the United States," said Xiwen.

He also announced plans to increase the output of its Hefei production plant in Anhui province, a move expected to create Unilever's largest manufacturing facility.

Source: ap-foodtechnology.com
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SIG Combibloc Ltd.
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Bangkok 10110, Thailand
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Insider Flash: Carter Holt Harvey considers further packaging consolidation

08/02/2007 - Auckland-based firm Carter Holt Harvey (CHH) is set to further increase its presence in the global beverage packaging sector following the acquisition of International paper’s North American beverage assets.

It was announced this month that the group had completed the purchase of International paper's North American beverage packing operations, and were interested in a further move for their remaining packaging assets.

As a result, CHH will take control of a number of production facilities throughout the US and Canada including International Paper's gable-top beverage converting facilities and the Evergreen packaging company.

Along with its North American operations, International Paper also owns beverage packaging subsidiaries in China, South Korea and Taiwan, and a number of joint ventures in Latin America, Israel, and Saudi Arabia.

Though these assets are not included with the current deal, International Paper added that it expected they would be sold to CHH at a later date during the first financial quarter.

The sale highlights the growing appetite amongst Asia Pacific companies to enter into the dynamic US and European beverage packaging industry.

Last year, Australian firm Amcor revealed that it had managed to offset declining revenues from its cardboard operations through increased sales of its beverage products in the US and Europe.

This saw the group - which is already the world's largest producer of plastic bottles - increase its sales throughout the sector.

Of this increase, aluminium beverage cans proved a particularly strong segment with sales rising 6 per cent, though the company also reported strong sales of glass wine bottles which also performed well.

Source: ap-foodtechnology.com
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Areerat Wongsa-oun
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Cluster Marketing CBAS
Phone direct +66-2259-9954-(118)
areerat.wongsa-oun@sig.biz

SIG Combibloc Ltd.
10th Floor, UBC II Building, 591 Sukhumvit 33
Bangkok 10110, Thailand
Phone +66-2259-9954, Fax +66-2259-9962
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Insider Flash: Groupe DANONE buys out its partners in Japanese joint venture Calpis Ajinomoto Danone

Groupe DANONE today announced the acquisition of all shares in the Japanese joint venture Calpis Ajinomoto Danone (CAD). The transaction reflects Groupe DANONE’s commitment to accelerate strategic growth objectives in the Asian dairy market.

The new organization, which will operate under the name Danone Japan, will continue to work closely with Ajinomoto and Calpis. Ajinomoto will remain the exclusive distributor for all Danone Japan fresh dairy products in Japan, and Calpis will continue to provide various food raw materials for Danone Japan’s fresh dairy products.

The new shareholding structure will enable Danone Japan to concentrate on its core competencies and focus on fast growing products and brands with distinct health benefits as well as increasing investments in marketing.. With low per-capita consumption, the Japanese dairy market has significant room for growth.

Emmanuel Faber, Executive Vice President, Asia Pacific, said the 27 year collaboration with Ajinomoto and 14 year collaboration with Calpis has been successful. “As a result of our cooperation with Ajinomoto and Calpis, we were able to establish the Danone brand in various dairy segments in Japan”. Commenting on the transaction, Bernard Hours, Executive Vice President Fresh Dairy Products, said: “the acquisition of all shares is part of Groupe DANONE’s strategy to increase its positions in the Asian dairy market. Japan is a priority market for Danone in Asia and the success of our product BIO in Japan illustrates there is room for growth of products that deliver distinct health benefits”.

Ajinomoto and Danone established the joint venture AD in 1980, in which both companies held 50% of the shares Ajinomoto, Calpis and Danone established the joint venture CAD in 1993. Before all shares were transferred to Groupe DANONE, Ajinomoto owned 20%, Calpis 30% and Danone 50% of the joint venture CAD.


Groupe DANONE
With around EUR 13 billion of total sales in 2005, Groupe DANONE is the world leader in fresh dairy products and bottled water (in volume terms), and n°2 in the biscuit market worldwide. In fresh dairy products, Groupe DANONE posted sales of EUR 7.2 billion with strong positions in Western Europe (n°1 in France, Spain, Italy, Portugal, United Kingdom, Belgium), in Eastern Europe (n°1 in Poland Czech, Hungary, Romania and Bulgaria), in North America (n°1 in United States), in Latin America (n°1 in Argentina and Brazil), in North Africa and Middle-East (n°1 en Algeria, Morocco, Tunisia, Israel, Saudi Arabia and Turkey). In Asia, Groupe DANONE posted sales of more than EUR 2.2 billion.

Source: Danone.com/Last Press Releases

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Cluster Marketing CBAS
Phone direct +66-2259-9954-(118)
areerat.wongsa-oun@sig.biz

SIG Combibloc Ltd.
10th Floor, UBC II Building, 591 Sukhumvit 33
Bangkok 10110, Thailand
Phone +66-2259-9954, Fax +66-2259-9962
www.sigcombibloc.com