The firms will invest RMB100 million (€9.93m) in a new production facility in Benxi in China's northeast Liaoning province, with Changyu retaining a 51 per cent stake in the venture. Canada is currently the largest producer of ice wine, a sweet dessert wine made from frozen grapes that was originally developed in Germany in the 1700's. Grapes are left on the vine well into the winter months and then pressed in their cold state. The water in the juice remains frozen as ice crystals, and only a few drops of sweet, concentrated juice is obtained, making the wine much more expensive than traditional red and white wines. But owing to the strict requirements for growing grapes for ice wine, there are only three countries which are currently able to produce the luxury product - Germany and Austria, as well as Canada - so supply falls far short of current demand. "Global annual production is only 1,000 tons which is much lower than demand. It is this imbalance that attracts us to invest in this industry, which is entirely new to China," Changyu manager Zhou Hongjiang told AP-Foodtechnology.com. One of the leading producers, Aolos currently accounts for about 10 per cent of the global supply. Asia is its largest export market, making a Chinese production site a major advantage. Zhou explained that the factory will be supplied by an ice vineyard, built five years ago, that covers 5000 acres. It has been on trial for almost three years. "As a result its production can reach 1000 tons when it comes on-stream. I believe such a large-scaled output will insert great influence on the global market," he said. China is one of few wine markets that are still expanding, with double-digit growth each year. Changyu, based in Yantai, Shandong Province, dominates the country's wine market with a 21 per cent share and annual capacity of 80,000 tons. Its products are exported to Malaysia, USA, Holland, Belgium, Korea, Thailand, Singapore, Hong Kong and elsewhere. According to the OIV (Organisation Internationale de la Vigne et du Vin), China's grape planting scale is the eighth largest in the world and its annual wine production ranks eleventh. Additional reporting by Pan Yan.