Cargill buys food ingredient systems firm in China

Related tags Food processing

Ambitious ingredients firm Cargill reaches into its deep pockets,
strengthening its portfolio to food makers in China through the
acquisition of an academia supported food ingredients firm based in
Peking, reports Lindsey Partos.

The US firm said this week it has finalised the purchase of a slice of Peking University Green Technology (PGT), a developer of food ingredient systems primarily for the dairy industry, set up in 2000 through investment by Peking University.

The purchase includes all the intellectual properties around the production, sales and marketing of food ingredient systems and will allow Cargill"to leverage PGT's deep customer knowledge and food system expertise to further develop China's food industry,"​ the firm said this week.

A food ingredient system is a blend of different food ingredients, such as emulsifiers and texturisers, that provide key functions, for example texture or taste, for a food or beverage product.

Soaring growth in China's food industry is encouraging manufacturers to increasingly take on board the systems, still an emerging industry in this country. While most consumers still prefer to purchase fresh foods, there is a clear shift towards processed foods, throwing up untold opportunities for western food firms faced with saturated sales in home markets.

Official statistics report that the Chinese food processing industry grew a considerable 16 per cent between 2001-2002 and 23 per cent for 2002-2003.

Further, some estimates believe that by 2010 output of the food industry may have doubled from 2000, when it was valued at about 800 billion RMB (€84billion).

Packaged foods, especially baked goods, dairy products, oils and fats, baby food and ice cream have all demonstrated "exceptional growth" in recent years, claims the recent report from the US department of agriculture.

In the upcoming years the industry will focus on the development of corn and wheat goods, dairy products, food additives and seasoning essentials, it adds.

"The combined strengths of Cargill and PGT (with 110 employees) in China is the best possible fit in the industry in terms of product, technology and employee skills,"​ said Gerrit Hueting, president, Cargill Starches & Sweeteners business unit in China.

This is the latest deal in a seemingly non-stop flow of acquisitions by Cargill, the largest private firm in the US.

In one month Cargill has cleared a deal to buy German industrial chocolate facility Schierstedter Schokoladefabrik, agreed to buy a sunflower seed crushing facility in Ukraine from Ukrainian consumer food company Chumak, and purchased Citrico, the number three global spot for supplies of pectin extracted and blended from citrus peel.

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