Two Singaporean firms, Tee Yih Jia Food and Super Coffeemix, are working with Chinese firm Jiangsu Hengshun Sauce and Food on building the world's largest vinegar factory in Zhenjiang city, Jiangsu province.
The new factory, which started construction last week, will cover an area of 250,000 square kilometres, and after an initial investment of CNY500 million will have an annual production volume of 200,000 metric tonnes. Hengshun is planning to invest CNY800 million in the second section, expanding the production to 500,000 metric tonnes by 2012.
Hengshun, listed on the Shanghai Stock Exchange and currently the largest vinegar producer in China, wants to expand abroad and said its Singaporean partners, working through a joint venture called JHS Holdings, would help it first reach the Singapore market.
"The new factory will enlarge our capacity, which will help our expansion both home and abroad," said Ye Youwei, president of Hengshun. "Though there were many foreign companies that were interested in this project, we chose JHS because Singapore companies have a very good reputation in the international food industry. What's more, we are hoping to sell our product in Singapore in the next three to five years."
At present, Hengshun has capacity for 100,000 metric tonnes of vinegar every year, counting for 4 per cent of the domestic market. It is estimated that by the completion of first section, its market share will be doubled, while by 2012, it is going to control 20 per cent of market.
Goi Seng Hui, president of Tee Yih Jia Food, said Hengshun's good and long-standing reputation in China would help it become as famous as US food giant Heinz in the future.
Hengshun owns 51 per cent share of the new factory, while JHS has the rest.
Additional reporting by Pan Yan.