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)
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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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www.sigcombibloc.com

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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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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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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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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Cluster Marketing CBAS
Phone direct +66-2259-9954-(118)
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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: 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)
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SIG Combibloc Ltd.
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www.sigcombibloc.com

Insider Flash: Philippine San Miguel discloses Coca-Cola payment details

MANILA (MarketWatch) -- San Miguel Corp. (SMCB.PH), the Philippines' largest food and beverage conglomerate by sales, Thursday provided a breakdown of the amount it will receive for selling its controlling stake in its soft drinks joint venture with Coca-Cola Co. (KO).

San Miguel said last week it will receive $590 million from Coca-Cola for its entire 65% stake in Coca-Cola Bottlers Philippines Inc. It didn't elaborate.

Thursday, San Miguel said Coca-Cola South Asia Holdings will pay the company an initial $370 million and deposit another $100 million with a third-party agent who will disburse the amount after the closing of some financial accounts which may result in a purchase price adjustment.

San Miguel said another $20 million will be paid by Coca-Cola South Asia 18 months after the deal's closing, while another $100 million will be paid on the fifth year of the deal.

San Miguel's sale agreement prevents it from producing either for itself or Coca-Cola's competitors nonalcoholic beverages in the Philippines for five years and elsewhere in the world for three years.

Aside from divesting itself of a drag to bottomline - Coca-Cola Bottlers has been suffering losses for years - San Miguel will also raise funds to ease the burden of debts it had taken on to fund an aggressive expansion overseas. It had bought several companies abroad in recent years, the biggest of which is Australia's dairy company National Foods Ltd.

-Edited by Rosalyn Lim
Source: Marketwatch.com Last Update: 6:24 AM ET Jan 4, 2007

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Insider Flash: San Miguel taps Thai health trend

11/01/2007 - San Miguel plans to launch a new water brand and a range of functional beverages in Thailand as part of its strategy to gain a leading position in this market, reveals a report.

The Philippines-based company, already one of south-east Asia's biggest food and drink producers, made its first steps in the Thai beverage market when it bought a brewery from Thai Amarit Brewery in 2004.

But the acquisition of Australia's National Foods in 2005 gave it a new premium juice brand (Berri), which has recently been introduced into Thailand.

Now it wants to become a major player in the country's beverage market by adding an extensive range of non-alcoholic drinks.

"We want to make ourselves a key player in the overall beverage market in Thailand in the next three to five years," Chirawan Assavanich, San Miguel's Thailand marketing and sales director, told The Nation newspaper last week.

Next month, the company will introduce a new drinking water under the Nam Fa brand, initially on test markets in the eastern region, including Chon Buri and Rayong. "We are also interested in launching other non-alcoholic beverages, such as functional drinks, which have high market potential," Assavanich told the paper.

Thai consumers are increasingly interested in healthy foods and beverages, a trend that is reflected in the growing fruit juice market. Juice drinks have been growing annually by 10.7 per cent, reaching around 109 million litres in 2004 or US$90 million, according to the US Foreign Agricultural Service.

San Miguel estimates Thailand's total fruit-juice market to be worth BT5 billion (€107m), with about 40 per cent of sales from pure fruit juice products and the rest from juice drinks.

Domestic player Tipco claims to have a 43 per cent share of the high-end segment of pure fruit and vegetable juice.
The company expects its Berri imported 100-per-cent fruit juice to generate sales of BT10 million this year, according to the report. A further BT200 million will be earned by its SunBlest 40-per-cent juice, produced in a recently completed factory in Rayong since October last year.

Source: ap-foodtechnology.com

Insider Flash: Foreign investors buy stake in Chinese milk drink maker

09/01/2007 - Three private equity groups have spent US$73 million on a stake in Chinese firm Taizini, a producer of probiotic milk drinks.

UK-based Actis Capital, Morgan Stanley and Goldman Sachs Group acquired about a third of the Hunan dairy company's shares during December, said its investment director Yao Xin.

China's dairy industry is growing rapidly and all of the leading players have already attracted foreign investment. The next wave of investment is therefore expected to be in smaller, regional dairies such as Taizini.

The Hunan company's focus on probiotic products, still very new to the Chinese market, has made it an attractive buy. Probiotic bacteria such as lactobacillus are said to protect the health of the digestive system and also boost immunity, and Chinese consumers are known to be interested in the health benefits of foods.

Taizinai, set up in 1997, now claims to have a 76.2 per cent share of China's probiotic drinks market. But the sector is still small compared with that of Europe and Japan. Probiotic dairy products account for less than 5 per cent of China's total dairy market, compared with about 80 per cent in Japan and Europe.

"In China, this [probiotic] sector is developing by 25 per cent every year, which demonstrates huge demand and great market potential," Yao told AP-Foodtechnology.com.

Taizinai plans to use the proceeds of the share sale to build two new factories in Jiangsu and Sichuan provinces, Yao said. Currently, the company has five research and production sites in Hunan, Beijing, Hubei, Jiangsu and Sichuan provinces.

In addition, Taizinai is planning an IPO although it has not yet decided where it will list. A Bloomberg report said that the firm has met with NYSE group chief executive John Thain to discuss a potential New York share sale.

"Yao said preparation for the listing "should probably be finished by the middle of this year" .

Company chairman Li Tuchun told the China Daily that after listing the firm will make a series of mergers and acquisitions, targeting both domestic and overseas manufacturers.

Taizinai is aiming to grow its sales from CNY1.8 billion (€177m) last year to CNY10 billion in three years. By 2017, the company's revenue is expected to reach CNY100 billion, Li told the paper.

Of the new owners, Actis, which is also an investor in one of China's biggest dairies, Mengniu, invested the biggest amount in Taizinai - US$40 million - while Morgan Stanley invested US$18 million and Goldman Sachs US$15 million.

The rest of the shares are owned by Li and senior management.
Source: ap-foodtechnology.com