Breiffini Kennedy, Asia Manager, Shanghai
Foreign brands occupy over 70 percent of China's high-end formula milk powder market and are expected to hold this dominant position for several years, according to Jason Yu of Taylor Nelson Sofres.
With ongoing investment by the likes of Abbott, Wyeth and Dumex in Asia, it seems multinationals are also keen to leverage benefits of local production capacity.
Access Asia forecast an increase in formula milk volumes from 509kt in 2007 to 607kt by 2012 indicating the market is set to remain extremely competitive.
Domestic players too are reviewing their strategies. Synutra who claim to be China’s third largest domestic producer of infant formula began producing nutritional ingredients & supplements such as chondroitin, Docosahexanoic Acid (“DHA”) and Arachidonicacid (“ARA”) at its new Meitek site in late 2008. Other investments into new products included the acquisition of a prepared baby food business from Huilian in October 2008. According to the companies latest quarterly report (up to Dec 31st 08) it is now using imported milk powder from Europe and New Zealand in their U-Smart, Super and He Lan Ru Niu, or Holsteina series products.
The focus for the industry is very much on rebuilding consumer confidence in brand names and securing market share for future growth.
For further information email: breiffini.kennedy@bordbia.ie