China Major Maneuvers In Tomato Paste Market 1
Time：2016/06/02 Click：2241
More and more companies to join tomato paste sector
Despite price shocks of recent years, more and more companies are joining China's tomato paste sector. In its latest interim report, Xinjiang's Guannong Ailiman Fruit, a company best known for ginning cotton, reported a remarkable transformation. Sales of tomato products almost quadrupled for the first six months of 2015 compared with the same period a year earlier, hitting CNY 439.2 million (USD 68.8 million, value 23 September, 2015). Revenue from cotton, on the other hand, fell by 43% to CNY 216.1 million (USD 33.8 million). This followed a fall in cotton prices to a five-and-a-half year low in December last year and sweeping changes to government subsidies, which redirected aid from ginners to growers. By swiftly pivoting to the tomato sector, Guannong has reduced its exposure to cotton and become China's second largest tomato company, usurping Chalkis.
Guannong becomes China's second largest tomato company
Guannong’s tomato paste revenue surge was largely owing to the addition to its books of Tianjin Sanhe, a Tianjin-based tomato packager and exporter. In August last year, Guannong bought a 51% stake in Sanhe in a deal worth CNY 210 million. There is little available information about Sanhe – it does not have a company website – but according to Guannong, Sanhe has been operating for more than twenty years and is China’s largest exporter of tomato products in small packages, mainly ketchups and sauces of 18-20 Brix and 28-30 Brix.
Sales volumes (a combination of both canned tomato paste products and ketchups & sauces) amounted to 69 000 metric tonnes (mT) and CNY 304.1 million (USD 47.6 million) in value over the reported period, while Sanhe’s total annual production capacity stands at 200 000 mT. In the reported period, Guannong itself increased sales of bulk paste by 92% to CNY 135 million (USD 21.1 million). This year, Guannong plans to produce 60 000 mT of paste, although as of 20 August, it had produced just 16 400 mT of 36-38 Brix paste.
