Beijing Orient Agribusiness Consultant Limited Sept. 2004
China
Soft drink
Monthly Market Report
News Flash 2
l “Weifuren” Plum Vinegar Mobilizes Coastal Market 2
l Coca Cola Company Targets Functional Drinks Market 2
News & Analysis 2
l 2.796 Million Tons Production of Soft Drinks in Sept. 2004 2
l Big Brands Occupy 95% of Market of Functional Drinks in South China 3
l Coca Cola Invested US$20 Million Again in Jilin 4
l First Pure Natural Soft Drink Plant Set up at Huocheng, Yili 4
l 40,000-ton Fruit and Vegetable Processing Project Being Set up at Shihezi 5
l Beijing Published Results of Sampling Survey on Solid Drinks 5
Imp. & Exp. 6
l Soft Drink Imports & Exports in Sept. 2004 6
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Page 2
Oct. 2004
News Flash
“Weifuren” Plum Vinegar Mobilizes Coastal Market
It is reported “Weifuren” plum vinegar which is from Taiwan enjoys positive sales in Fujian, Guangdong, Zhejiang, Shanghai, Chongqing and Chengdu. According to Mr. Li, the general manager of the producing company, the product is mainly sold at the catering channel, and the fist product is packed in the volume of 500ml. The reasonable price level of US$3.6-4.8 and the good taste have won recognition of consumers. The company shall introduce products in 300ml and shall be sold in supermarkets, and the catering channel and supermarkets shall supplement each other.
Coca Cola Company Targets Functional Drinks Market
According to a report in the Wall Street Daily, Coca Cola which has not made any achievement in the market of functional drinks shall present Full Throttle functional drink at convenient stores in the US next year. It is expected Coca Cola Company shall compete in the Chinese market of functional drinks after that, and the Chinese market of functional drinks which sees rapid growth shall witness more intensive competition.
News & Analysis
2.796 Million Tons Production of Soft Drinks in Sept. 2004
It is reported the output of soft drinks in September 2004 recorded 2.796 million tons, up 9.8% from the same period of 2003. Of which, the production of carbonated drinks registered 478,000 tons, up 13.7% from the same period of 2003; drinking water in barrels in bottles 1.106 million tons, up 2.0% from the same period of 2003; fruit juices and drinks 455,000 tons, up 20.5% from the same period of 2003.
Till the end of September of the year, the total production of soft drinks had amounted to 23.013 million tons, up 20.3% from the same period of 2003, of which carbonated drinks 5.327 million tons, up 17.3%; drinking water in barrels and bottles 9.699 million tons, up 17.8%; fruit juices and drinks 3.803 million tons, up 30.5%.
Table 1, Outputs of Soft Drinks in 2004
Unit: 1,000MT
Sept.2004 / Total of Jan. to Sept. 2004 / Sept. 2004 against Sept. 2003 (+-%) / Total of Jan. to Sept 2004 against total of Jan. to Sept 2003 (+-%)
Soft drinks / 2,796 / 23,013 / 9.8 / 20.3
Carbonated drinks / 748 / 5,327 / 13.7 / 17.3
Drinking water in bottles and barrels / 1,106 / 9,699 / 2.0 / 17.8
Fruit juices and drinks / 455 / 3,803 / 20.5 / 30.5
Big Brands Occupy 95% of Market of Functional Drinks in South China
Enjoying the fastest development in the beverage industry during this year, functional drinks saw large sales volumes from May to September, the golden season. Mr. Cai Chongbo, the general manager of Master Kong in South China revealed the sales volume of its Jinpao during the five months since its introduction to the market has been 2 million boxes. According to the latest data of AC Nielsen, in South China, i.e. Guangdong, Guangxi and Hainan, “Jinpao” is the No. 1 brand of functional drinks, and the market share is as high as 45%. In addition, “Maidong” has taken 40% of the market share of South China thanks to its emergence in the market as early as in last year. The aggregate market share of the two is 95%.
The heating up of the market of function drinks does not mean shrinkage of other kinds of soft drinks such as fruit juices. At present, the overall beverage industry enjoys an annual growth of 20-30%. Mr. Cai Chongbo also stated its production line in Guangdong cannot meet the demand, and there is consideration of more investment next year. The new lines shall not be solely for functional drinks, there might be production of fruit juices and tea drinks.
Coca Cola Invested US$20 Million Again in Jilin
A heightened competition of carbonated drinks is going on silently in the Northeast. In mid September, Jilin Coca Cola Beverage Co., Ltd. started to operate at Changchun Economic and Technological Development Zone. According to insiders, this shall cause a significant impact on the layout of the two international beverage groups in the whole Northeast. It is reported Pepsi Cola takes 52.3% of the market share of Jilin. This time, Coca Cola shall invest US$20 million to set up two internationally advanced can filling lines and the annual capacity shall be 43 million boxes. This action shall directly lead to a fierce competition between the two colas in the Northeast. Before this, Coca Cola Company set up plants in Dalin in 1987, in Shenyang in 1995 and in Harbin in 1996. Coca Cola Company has fully covered the four major cities in the Northeast thanks to the operation of the company in Jilin.
It is reported the can-filling plant in Jilin is the fourth new plant of Coca Cola of the year after the one in Zhanjiang, the one in Gansu and the one in Huizhou. However the plant in Jilin has a unique strategic meaning as compared with other plants in terms of geographical location, Pepsi Cola has a profound market foundation in Jilin. It is reported Pepsi Cola set up its plant in Jilin 8 years ago, hence its share is bigger than that of Coca Cola, and Pepsi Cola takes over 50% of the market share of Jilin. Coca Cola used to supply product to Jilin via Harbin and Dalian, so the market share is smaller.
First Pure Natural Soft Drink Plant Set up at Huocheng, Yili
Around mid October, Musalisi, a kind of pure natural soft drink made from American red globe grape juice and with Weiwuer traditional production technique was in trial production at the beverage plant of Liangsangong Village, Langan Town, Huocheng County, Xinjiang, mobilizing secondary grape processing of the 6,600 hectares of grapes in Yili. The plant was jointly set up by 3 entrepreneurs with US$362,000, and the plant occupies 4,600 hectares of land at the grape area of Beishanpo, Langan Town.
Currently, two kinds of raw grape juices including Musalisi have passed verification of relevant departments. When in formal operation, the daily production of concentrated juice and Musalisi soft drink shall be 15 tons.
40,000-ton Fruit and Vegetable Processing Project Being Set up at Shihezi
In the beginning of October, Shennei 40,000-ton fruit and vegetable project – the only authorized fruit and vegetable processing project by the Central Government in Xinjiang – saw foundation-stone laying ceremony at Shihezi National Economic and Technological Development Zone, Xinjiang. This project has State subsidy of 6.69 million yuan, fund of 15 million yuan from the construction corps, and the total investment is 109 million yuan, the designed annual production capacity is 40,000 tons, and the annual output value shall be 212 million yuan. The project shall be in formal operation in 100 days.
According to an introduction, Xinjiang applied for this project as early as in May 2002. And the application beat the other 120 applications and was approved by the State Development and Reform Commission thanks to the advantage of resources.
Shihezi Development Zone Shennei Food Co., Ltd., set up in 1996, is an enterprise of Shihezi University. Shennei fruit and vegetable juices produced by the company have gradually won popularity among consumers, the annual production capacity is 5,000 tons, and it is one of the first group of companies in Xinjiang that obtained green food certification.
Local analysts pointed out the 40,000-ton fruit and vegetable project shall become the radiation center of regional economic and scientific development, and shall be a gathering place for R&D institutions and innovation-type incubator companies.
Beijing Published Results of Sampling Survey on Solid Drinks
Beijing Quality and Technology Supervision Bureau published the results of a sampling survey in the end of October, indicating the quality of solid drinks and starch products produced and sold in Beijing is up to the standard, whereas the quality of frozen drinks and starch should be improved.
Five kinds of products from four solid drinks producers were examined during the survey, there were tests on moisture content, saccharin, coloring agent, total plate count, coliform, disease-conducive bacteria and leaf mold, discovering all up to the standard, making the quality ratio at 100%.
The sampling survey was carried out at 29 kinds of frozen drinks sold at 12 supermarkets, there were tests on saccharin, coloring agent, total plate count, coliform and disease-conducive bacteria, discovering 26 up to the requirement, making the quality ratio at 89.7%. The main quality problem is excessive total plate count.
There were also tests on 11 kinds of starch products from 9 producers, discovering all up to the standard, making the quality ratio at 100%. There were tests on 10 kinds of starch from 10 producers, discovering 8 up to the standard, making the quality ratio at 80%. The main quality problem is excessive content of residues of sulfur dioxide in starch.
Imp. & Exp.
Soft Drink Imports & Exports in Sept. 2004
Table 1, China’s Bananas Exports by Original Country
(Products of heading No. 08030000 in China customs tariff)
Unit: MT, US$/MT
August / FOB / September / FOB / Total / % In TotTotal / 1,858.16 / 317.98 / 3,061.80 / 206.73 / 17,701.44 / 100.00
Hong Kong / 658.66 / 135.75 / 2,127.50 / 128.21 / 8,424.21 / 47.59
Russia / 774.18 / 354.59 / 466.70 / 336.37 / 5,274.30 / 29.79
Japan / 233.93 / 560.01 / 313.36 / 560.70 / 2,948.64 / 16.65
Macau / 97.75 / 128.23 / 89.92 / 128.20 / 803.18 / 4.53
Mongolia / 80.00 / 300.00 / 40.00 / 300.00 / 178.00 / 1.00
United States / 11.76 / 5,000.00 / 0.00 / 0.00 / 40.38 / 0.22
Turkey / 21.39 / 120.01 / 21.39 / 0.12
Korea,DPR / 1.89 / 320.11 / 2.94 / 482.31 / 9.83 / 0.05
Kirghizia / 0.00 / 0.00 / 0.00 / 0.00 / 1.50 / 0.00
Table 2, China’s Bananas Imports by Original Country
(Products of heading No. 08030000 in China customs tariff)
Unit: MT, US$/MT
August / CIF / September / CIF / Total / % In TotTotal / 38,057.95 / 247.41 / 33,604.38 / 270.25 / 304,886.74 / 100.00
Philippines / 31,083.48 / 283.53 / 26,790.21 / 280.55 / 223,372.71 / 73.26
Vietnam / 6,544.18 / 71.59 / 3,056.74 / 72.19 / 62,553.96 / 20.51
Ecuador / 0.00 / 0.00 / 3,091.31 / 370.00 / 15,601.35 / 5.11
Thailand / 430.28 / 312.25 / 666.12 / 301.74 / 3,258.44 / 1.06
Indonesia / 0.00 / 0.00 / 0.00 / 0.00 / 55.77 / 0.01
Burma / 0.00 / 0.00 / 0.00 / 0.00 / 44.50 / 0.01
Italy / 0.01 / 11,333.33 / 0.00 / 0.00 / 0.01 / 0.00
Table 3, China’s Apples Exports by Destination Country
(Products of heading No. 08081000 in China customs tariff)
Unit: MT, US$/MT
August / FOB / September / FOB / Total / % In TotTotal / 34,772.12 / 333.86 / 67,076.86 / 298.83 / 441,828.83 / 100.00
Russia / 5,482.56 / 248.68 / 3,663.27 / 282.12 / 78,684.46 / 17.80
Indonesia / 4,627.18 / 422.70 / 9,031.25 / 311.42 / 55,265.12 / 12.50
Vietnam / 8,142.73 / 242.84 / 10,535.01 / 246.72 / 48,306.49 / 10.93
Malaysia / 2,123.18 / 438.24 / 7,712.77 / 333.50 / 33,139.10 / 7.50
Thailand / 3,612.24 / 417.32 / 5,921.30 / 351.20 / 32,267.08 / 7.30
Philippines / 2,164.56 / 361.29 / 6,079.33 / 334.63 / 30,618.24 / 6.92
Singapore / 1,452.27 / 517.71 / 2,734.86 / 433.76 / 20,386.69 / 4.61
Hong Kong / 1,128.57 / 354.61 / 3,242.66 / 234.99 / 19,743.08 / 4.46
Netherlands / 1,278.31 / 427.67 / 699.42 / 385.76 / 15,590.80 / 3.52
Kazakstan / 0.00 / 0.00 / 1,891.95 / 217.40 / 15,135.52 / 3.42
Korea,DPR / 25.02 / 184.86 / 181.00 / 159.42 / 10,848.61 / 2.45
Saudi Arabia / 96.32 / 492.35 / 663.90 / 547.77 / 7,993.13 / 1.80
Burma / 1,977.36 / 241.82 / 4,513.08 / 242.03 / 7,617.67 / 1.72
Sri Lanka / 1,143.16 / 284.57 / 2,413.19 / 250.16 / 7,523.19 / 1.70
Spain / 62.82 / 894.62 / 0.00 / 0.00 / 7,369.86 / 1.66
Mongolia / 540.00 / 90.74 / 2,454.20 / 96.31 / 7,144.28 / 1.61
Nepal / 288.44 / 483.27 / 1,262.15 / 483.28 / 6,412.56 / 1.45
United Arab Emirat / 0.00 / 0.00 / 683.02 / 392.10 / 6,055.69 / 1.37
Bangladesh / 58.46 / 242.68 / 743.93 / 266.74 / 5,381.70 / 1.21
Kirghizia / 45.00 / 120.00 / 769.89 / 175.98 / 5,138.36 / 1.16
United Kingdom / 0.00 / 0.00 / 141.44 / 781.43 / 3,992.40 / 0.90
Italy / 0.00 / 0.00 / 0.00 / 0.00 / 3,570.45 / 0.80
Canada / 198.94 / 897.00 / 39.00 / 930.90 / 2,835.38 / 0.64
India / 0.00 / 0.00 / 30.54 / 347.84 / 2,385.51 / 0.53
Macau / 119.86 / 337.17 / 209.48 / 350.02 / 1,360.82 / 0.30
France / 0.00 / 0.00 / 0.00 / 2,000.00 / 1,090.24 / 0.24
Belgium / 0.00 / 0.00 / 41.16 / 620.02 / 977.33 / 0.22
Laos,PDR / 162.00 / 241.64 / 328.00 / 241.64 / 930.50 / 0.21
Portugal / 0.00 / 0.00 / 0.00 / 0.00 / 528.17 / 0.11
Democratic Kampuch / 21.70 / 410.00 / 87.30 / 403.55 / 460.95 / 0.10
Egypt / 0.00 / 0.00 / 41.57 / 549.56 / 429.60 / 0.09
Suriname / 18.00 / 300.00 / 89.48 / 295.48 / 426.02 / 0.09
Bahrian / 0.00 / 0.00 / 109.38 / 472.78 / 330.33 / 0.07
Oman / 0.00 / 0.00 / 227.08 / 383.63 / 308.26 / 0.06
Germany,FR / 0.00 / 0.00 / 0.00 / 0.00 / 224.78 / 0.05
Algeria / 0.00 / 0.00 / 178.64 / 414.83 / 199.14 / 0.04
Sweden / 0.00 / 0.00 / 63.60 / 381.26 / 188.82 / 0.04
United States / 0.00 / 0.00 / 63.00 / 290.00 / 148.62 / 0.03
Kuwait / 0.00 / 0.00 / 0.00 / 0.00 / 99.12 / 0.02
Ireland / 3.43 / 445.03 / 66.06 / 399.59 / 88.27 / 0.01
Panama / 0.00 / 0.00 / 0.00 / 0.00 / 80.82 / 0.01
Malta / 0.00 / 0.00 / 0.00 / 0.00 / 55.05 / 0.01
Morocco / 0.00 / 0.00 / 0.00 / 0.00 / 45.26 / 0.01
Libyan Arab Jm / 0.00 / 0.00 / 0.00 / 0.00 / 41.00 / 0.00
Sudan / 39.56 / 337.03 / 39.56 / 0.01
Norway / 0.00 / 0.00 / 0.00 / 0.00 / 37.05 / 0.00
Cyprus / 0.00 / 0.00 / 0.00 / 0.00 / 36.40 / 0.00
Eritrea / 0.00 / 0.00 / 21.15 / 290.83 / 29.15 / 0.00
Brunei / 0.00 / 0.00 / 0.00 / 0.00 / 28.62 / 0.00
Kenya / 0.00 / 0.00 / 18.00 / 250.00 / 28.60 / 0.00
Congo / 24.98 / 71.98 / 24.98 / 0.01
Qatar / 23.24 / 387.82 / 23.24 / 0.01
Pakistan / 22.00 / 200.00 / 22.00 / 0.00
Colombia / 0.00 / 0.00 / 0.00 / 0.00 / 21.70 / 0.00
Korea Rep / 0.00 / 0.00 / 0.00 / 0.00 / 21.56 / 0.00
Denmark / 0.00 / 0.00 / 0.00 / 0.00 / 19.60 / 0.00
Maldives / 0.00 / 0.00 / 0.00 / 0.00 / 19.52 / 0.00
Ghana / 0.00 / 0.00 / 0.00 / 0.00 / 17.28 / 0.00
Romania / 16.00 / 380.25 / 16.00 / 0.00
Turkey / 0.00 / 0.00 / 0.00 / 0.00 / 11.64 / 0.00
Iraq / 0.00 / 0.00 / 0.00 / 0.00 / 11.47 / 0.00
Croatia / 0.00 / 0.00 / 0.00 / 0.00 / 2.00 / 0.00
Table 4, China’s Apples Imports by Original Country