The Dutch company has served China, Hong Kong and Taiwan with products sourced from its North American and European production facilities in the past.
Gerard Hoetmer, CEO of CSM, explained the business rationale behind the bricks and mortar investment in China: "China is a very promising market for bakery products. Our global customers are expanding into China. In addition, the economic growth is driving domestic consumption.”
CSM has not released a figure for the new investment in China.
A company spokesperson told FoodNavigator.com that the facility will produce dry mixes for products such as bread, cakes and muffins. The intention is to tailor-make the majority of products to suit tastes in the local market, but it will also supply a few global customers with products under the same specifications as it produces at its other facilities.
“With this local production, we can better tailor our local product portfolio to local requirements and respond faster to customers' needs," said Hoetmer.
The Shanghai site is CSM’s first facility in Asia for bakery ingredients, but its subsidiary Purac opened a new factory for lactic acid in Thailand in 2008, at a cost of almost €100m. That facility was prompted by strong growth in the market, as well as proximity to sources of sugar, which is crucial to production of the ingredient.
Subsequently, Purac shifted its lactic acid production away from Europe, to Thailand, the US and Brazil.
Purac is also constructing a new lactides plant in Thailand which is expected to be completed by late 2011.
Sales by region
CMS currently reports its sales under ‘North America’, ‘The Netherlands’, ‘Rest of Europe’, and ‘Other countries’. Asia is included under the latter, and in full year 2010 it accounted for 3.9 per cent of the total company sales of €2990m.