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Industry Report - Food & Beverage - March 2014
A Company and Industry Analysis March 2014
CONTENTS
Current Environment SectorOverview SectorPerformance LeadingCompanies MergersandAcquisitions InitialPublicOfferings
Industry Profile IndustrySizeandValue SectorInvestment PolicyandRegulatoryEnvironment
Market Trends and Outlook DemandforConvenienceandHealthyProductsContinuestoGrow
ConsumerFriendlyFoodPackaging
FoodSafetyConcernsGrow MarketOutlook
Country Profiles Australia China India Japan ThailandThePhilippines
Currency Conversion TableThe Scope of This ReportKey ReferencesComparative DataReports Coverage
Current Environment Key Points Asianeconomiesremainedsoftoverthepastsixmonths.ThePhilippinesimportedmorericeafterSuperTyphoonHaiyandestroyedcropsinNovember2013,whileIndiasFoodSafetydestroyedcropsandStandardsAuthority(FSSAI)blockedprocessedfoodshipmentsastheydidnotcomplywithlabelingrequirements.
Mostleadingcompaniesinthesectorexperiencedmoderategrowthinsalesandprofitabilityinthelatterhalfof2013,fueledbyhigheroverseasdemand.
Leading F&B companies faced less-impressive share performance.The average stock price oftheleadingfoodandbeveragecompaniesintheAsia-PacificbyrevenuesastrackedbyMergentincreasedby7.24%overthesixmonthsperiodfromAugust8,2013toJanuary8,2014.
Mergerandacquisitionactivityremainedactivethroughoutthesixmonths,ascompaniessoughteconomiesofscale,aimingtomaximizeoperatingefficienciesandenhancemarketvisibility.
InitialPublicOfferings(IPO)activitysurgedinthelatterhalfof2013andwasexpectedtoremainactiveoverthenextsixmonths.
Industry Profile Key Points TheF&BindustryisoneofthelargestcontributorstoGDPinmostAsia-Pacificcountries,withChina,India,JapanandthePhilippineshavingthebiggestF&Bindustriesintheregion.
F&BcompaniesintheAsia-Pacificcontinuetoseekopportunitiesinbothforeignanddomesticmarkets to achieve sales growth and profitability, investing in research and development andupgradingtechnologies.
Newlawsandregulationsintroducedindifferentcountriesinthelatterhalfof2013asfoodsafetybecomesamoreimportantissueintheregion.TheGovernmentsaretryingtoimprovefoodsafetyandstrengthenconsumerconfidence.Severalnewlawsandregulationswereintroducedtoprotectandencourageindustrygrowth.
Market Trends and Outlook Key Points Populationgrowth,urbanization,andrisingincomesaremodernizingAsia-Pacificlifestylesandchangingthedietsofmanypeople,drivingdemandforpreparedandconveniencefoodproducts.Japanesehasincreasedtheirexpenditureoncoffeeandcocoabeverages.
Consumerfriendlypackagingismoreappealingtoconsumerswhohavebusylifestylesandalsotoyoungergenerations,suchasGenerationYandGenerationZ.
FoodsafetyconcernscontinueinbothJapanandChinaasnewscandalshaveemergedoverthepastsixmonths,affectingthereputationoftheindustries.
A shift in consumption patterns will influence companies sales and profit margins. Chineseconsumersarewillingtopaymoreforbetterqualityproducts,whileAustralianhavebecomemoreacceptingofnewwines.
Thehealth-consciousmarketwillcontinuetodemandmorenutritious,saferandorganicproducts,andthiswillremainakeytrendintheAsianF&Bindustryoverthenextfewyears.
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Asia-PacificFood & Beverage Sectors
Adding Value to Information Since 1900
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Industry Report - Food & Beverage - March 2014
PublisherJonathan Worrall
DirectorJohn Pedernales
Managing EditorPeter OShea
Research AnalystHuong Yuli
Website: http://webreports.mergent.com
Customer Service: 1800 342 5647 or 704 559 7601email: [email protected]
Sales Enquiries: Tim Worrall - Asia-Pacific Sales Manager+61 422 721 844email: [email protected]
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Copyright Statement
Copyright 2014 by Mergent, Inc. All Information contained herein is copyrighted in the name of Mergent, Inc. and none of such information may be copied or otherwise reproduced, repackaged, further transmitted, transferred, disseminated, redistributed or resold, or stored for subsequent use for any such purpose, in whole or in part, in any form or matter or by any means whatsoever, by any person without prior written consent from Mergent.
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Disclaimer
All information contained herein is obtained by Mergent, from sources believed by it to be accurate and reliable. Because of the possibility of human and mechanical error as well as other factors, however, such information is provided as is without warranty of any kind. NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY INFORMATION IS GIVEN OR MADE BY MERGENT IN ANY FORM OR MANNER WHATSOEVER. Under no circumstances shall MERGENT have any liability to any person or entity for (a) any loss or damage in whole or in part caused by, resulting from, or relating to, any error (negligent or otherwise) or other circumstance involved in procuring, collecting, compiling, interpreting, analyzing, editing, transcribing, transmitting, communicating or delivering any such information, or (b) any direct, indirect, special, consequential or incidental damages whatsoever, even if Mergent is advised in advance of the possibility of such damages, resulting from the use of, or inability to use, any such information.
The Asia-Pacific Industry Reports are
published by Mergent, Inc., headquartered in
Fort Mill, South Carolina, USA. Each
industry sector report is updated every six
months. Mergent, Inc., a leading provider of
global business and financial information on
publicly traded companies, operates sales
offices in key North American cities as well as
London, Tokyo and Melbourne.
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Current Environment
The Asian economy remained soft in the latter half of2013,duetoinstabilityinfinancialmarketsbecauseoftheslowrecoveryoftheUSeconomyandvolatilecommodityprices, despite Japans economic recovery. Even theemerging economies of India and China continued toshowonlymoderategrowth.Despitevolatilefoodandrawmaterialprices,andfinancialmarketuncertainty,theAsia-Pacificfoodandbeverage(F&B)marketshowedmoderategrowth over the past sixmonths, thanks to fast growingemergingmarkets.
Growth was influenced by demand for healthier foodsdue to increased food safety concerns, growing middleclasses, promotional campaigns and liberal regulatoryenvironments. Many leading companies such as KirinHoldingsCoLtd(TSE:2503),NipponMeatPackersInc(TSE:2282),NisshinSeifunGroupInc(TSE:2002)andAsahiGroupHoldingsLtd(TSE:2502)improvedearningsand sales. The industry remains attractive to foreigninvestorsseekingtoexpandtheirbusinesses.
Rapidly growing income levels and rising standards oflivinginemergingcountries,particularlyChinaandIndia,are leading to greater expenditure on food. Consumers,particularly the younger generation, arewilling to spendmore on luxury foods and try new varieties. Otherdemographic changes, including a rising number of
womenintheworkforceandmorehecticlifestyles,fueledthedemandforconvenience,healthyandhighvalue-addedfoods.
Asgovernmentsreformedlocalindustries,importedF&Bproducts were affected. China tried to reform its dairyindustry,whilethePhilippinestriedtosupplyitsowndairyandricedemands.However,thePhilippineswillincreaserice imports in the first half of 2014 as rice cropsweredestroyedbySuperTyphoonHaiyan inNovember2013.ChinasdemandforF&BproductsisexpectedtogrowastheGovernmentrelaxeditsone-childpolicy.
Indias Food Safety and Standards Authority (FSSAI)blocked processed food shipments from Thailand, theUK, the US and France on November 2, 2013, as theydid not comply with the latest labeling requirements.TheFoodSafetyandStandardsActof2006,enforced in2011, required importers to state all content informationonproductpacksbefore theyareexported to India.Thishit food importers, and severely damaged Indias tradereputation,astherewasnograceperiodgiven.
Sector Performance
The shares performance of leading Japanese F&Bcompanieswaslessimpressiveoverthesixmonthsfrom
Sector Overview
Table 1: Leading Company Share Price Movements over the Six Months from August 8, 2013 to January 8, 2014
Company Name Closing Price as on August 8, 2013Closing Price as on
January 8, 2014 % Change
Kirin Holdings Co Ltd 1,461 (US$14.04) 1,469 (US$14.12) 0.55Asahi Group Holdings Ltd 2,512 (US$24.14) 2,918 (US$28.04) 16.16Nippon Meat Packers Inc 1,447 (US$13.9) 1,862 (US$17.89) 28.68Yamazaki Baking Co Ltd 1,186 (US$11.4) 1,062 (US$10.2) 10.46Kewpie Corp 1,503 (US$14.44) 1,447 (US$13.9) 3.73Itoham Foods 423 (US$4.06) 472 (US$4.54) 11.58Nisshin Seifun Group Inc 1,039 (US$9.98) 1,082 (US$10.4) 4.14Nissin Food Holdings Co Ltd 4,000 (US$38.44) 4,440 (US$42.66) 11.00Industry Average Rise/Fall 7.24Dow Jones Asia-Pacific F&B Index (DJAPFB) 173.17 173.36 0.11S&P 500 1,697.48 1,837.49 8.25
Sources: Tokyo Stock Exchange, Dow Jones and S&P Indices
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Current Environment
August8,2013,toJanuary8,2014,risingbyanaverageof7.24%,thaninthesixmonthsfromFebruary1toJuly31,2013,risingbyanaverageof14.62%.SharepricesofAsia-Pacificcompanieswerestronger,exceptthoseofYamazakiBaking Co Ltd (TSE: 2212) and Kewpie Corp (TSE:2809). The Dow Jones Asia-Pacific Food & BeverageIndexgained0.11%,comparedwiththeS&P500s8.25%gain.ThesharepricesofeightleadingcompaniestrackedbyMergentrosebyanaverage7.24%,withexpectationsforbetterreturnsinthenextsixmonths.
NipponMeatPackersIncwasthemajorgainer, itsshareprice closing at 1,862 (US$17.89) on January 8, upfrom1,447(US$13.9)onAugust8,2013.AsahiGroupHoldings Ltds share price rose by 16.16% to 2,918(US$28.04), from 2,512 (US$24.14), while ItohamFoods (TSE: 2284) rose by11.58% to 472 (US$4.54),from423(US$4.06).
NissinFoodHoldingsCoLtds(TSE:2897)sharepriceroseby11%to4,440(US$42.66), from4,000(US$38.44),NisshinSeifunGroupIncsby4.14%to1,082(US$10.4),from1,039(US$9.98),whileKirinHoldingsCoLtdsroseby0.55%to1,469(US$14.12),from1,461(US$14.04).TheworstperformerwasYamazakiBakingCoLtd,whosesharepricedroppedby10.46%to1,062(US$10.2),from1,186(US$11.4),whileKewpieCorpsdroppedby3.73%to1,447(US$13.9),from1,503(US$14.44).
Leading Companies
Japanese companies continued to dominate the Asia-PacificF&Bindustryover thefirstninemonthsof2013,withmostcompaniesshowingsignsofrecovery,thankstohigheroverseasdemand.LeadingbrewerKirinHoldingsCo Ltds (TSE:2503) net profit totaled 83.66 billion(US$803.89 million), up threefold from 25.37 billion(US$243.78million)ayearearlier.Salesgrewby4.45%to 1,677.61 billion (US$16.12 billion), from 1,606.14billion (US$15.43 billion) a year earlier, due to higherdemand for overseas integrated beverages. Operatingincome rose 2.14% to 107.5 billion (US$1.03 billion),from105.25billion(US$1.01billion).
Kirins archrival Asahi Group Holdings Ltds (TSE:2502)netsalesincreasedby10.34%to1,257.03billion(US$12.08 billion), from 1,139.19 billion (US$10.95billion) in the first ninemonths of 2013,with operatingincome rising by 23.77% to 83.77 billion (US$804.95million),from67.68billion(US$650.34million),despitehigher sales costs and rising operating expenses. Net
income increasedby2.5% to46.73billion (US$449.03million),from45.59billion(US$438.07million).Asahireportedhighersalesinoverseassegments.
One of Japans top processed meat producers NipponMeat Packers Incs (TSE: 2282) net sales rose by9.76% to 811.84 billion (US$7.8 billion) in the fiscalfirst half ending March 31, 2014, from 739.63 billion(US$7.11 billion) a year earlier. Net income jumped86.23%to10.82billion(US$103.97million),from5.81billion (US$55.83 million), thanks to higher overseasprocessed food and dairy sales, and increased operatingefficiency.
Steadydemandraisedmayonnaise-makerKewpieCorps(TSE: 2809) net sales by 4.47% to 395.13 billion(US$3.8 billion) in the nine months ended August 31,2013, from 377.94 billion (US$3.63 billion) a yearearlier.Nevertheless, its net incomedroppedby7.3% to10.28 billion (US$98.78 million), from 11.09 billion(US$106.56million),duetohigherrawmaterialcostsandoperationexpenses.
ItohamFoods(TSE:2284)netsalesincreasedby3.78%to 221.02 billion (US$2.12 billion) in the six monthsendedSeptember30,2013,from212.96billion(US$2.05billion) a year earlier, due to the weaker yen. Businessreforms pushed operating expenses down, and increasednetincometo1.49billion(US$14.32million),from515million(US$4.95million)in2012.
Nisshin Seifun Group Inc (TSE: 2002) is a holdingcompanyengagedintheflourmilling,foodprocessing,petfood, pharmaceuticals, engineering and feed businesses,with 50 subsidiaries and 16 affiliates. In the sixmonthsendedSeptember30,2013, itsnet sales roseby7.9%to239.32 billion (US$2.3 billion), from 221.78 billion(US$2.13billion)ayearearlier,whilenetincomeroseby4.25% to 7.12 billion (US$68.42 million), from 6.83billion (US$65.63 million), thanks to lower operatingexpenses.
NissinFoodHoldingsCoLtd(TSE:2897)manufacturesinstant noodles, frozen foods, confectionery and dairyproducts. Its net sales rose by 8.33% to 193.26 billion(US$1.86billion)inthesixmonthsendedSeptember30,2013,from178.4billion(US$1.71billion)ayearearlier,thanks to higher overall demand. Net income expandedby 37.74% to 8.54 billion (US$82.06 million), from6.2 billion (US$59.58million) a year earlier, thanks toproductionefficiency.
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Current Environment
Mergers and Acquisitions
The latter half of 2013was an interesting one forAsia-Pacific mergers and acquisitions (M&A), particularly inChina. Some overseas companies looked for routes intobiggerlocalmarkets,withCarlsbergA/S(CSE:CARL.B)increasingitsstake inChongqingBreweryCoLtd(SSE:600132)to60%,from29.7%,onDecember5,2013,payingRMB2.9 billion (US$478.09million). OnDecember 30,2013,Carlsberg acquired thewholeChongqingBreweryforRMB1.56billion (US$257.18million), in an attempttostrengthenitsleadingpositioninChinasgrowingbeermarket.ThedealiswaitingforapprovalfromtheChineseGovernment.
Somedairycompanies inChinacontinued tosourcerawmaterialsabroad,tryingtoincreasecustomerconfidenceinlocalproducts.SFLHoldingsLtd,asubsidiaryofChineseprivatefoodconglomeratePengxinGroupCoLtd,offeredNZ$85.7 million (US$70.67 million) for New Zealand-baseddairyfarmSynlaitFarms.Thedeal,beingexaminedby the Government, is expected to be completed byFebruary28,2014.TheacquisitionwillleveragePengxinGroupscapabilitiesandresourcesinR&D,productqualitycontrol, marketing, and greater capital access to help itcapturetheemerginginfantmilkformulamarketinChina.
China Mengniu Dairy Co Ltd (HKSE: 2319) acquiredinfantformulaproducerYashiliInternationalHoldingsLtd(HKSE:1230)onJanuary5,2014forRMB376.66million(US$62.1 million), in an attempt to improve its marketshareintheemergingmilkpowdermarketandtorestoreconsumer confidence, affected by the melamine-taintedmilkfurorin2008.Canada-based dairy producer Saputo Inc (TSE: SAP)acquired Warrnambool Cheese and Butter FactoryCo (WCB), one of the Australias oldest private dairymanufacturers, from investment company Wilson AssetManagementLtdformorethanA$515million(US$452.17million) on January 21, 2014. The acquisition allowedSaputotocontrolWCBscheesefactory,whichproducesLion products of Kirin Holdings Co Ltd, inAllansford,Victoria state. The deal will also leverage Saputoscapabilities and resources, and greater capital access tohelpitcapturethegrowingglobaldairymarket.
HersheyNetherlandsBV,asubsidiaryofTheHersheyCo(NYSE:HSY),boughtChina-basedprivateconfectioneryand snack producer Shanghai Golden Monkey FoodCo (SGM)onDecember 19, 2013, forRMB3.54 billion
(US$583.6 million). The acquisition will leverageHersheys distribution capabilities and strengthen itspresenceinChinasgrowingconfectionerymarket.GroupeLactalisSA,Francesprivateleadingdairyproducer,bought Indias second largest private dairy companyTirumalaMilkProductsPvtLtdforanundisclosedamountonJanuary8,2014.TheacquisitionwillhelpLactalis toenteroneoftheworldslargestdairymarkets.
Initial Public Offerings
One of Chinas leading F&B producers TenwowInternationalHoldingsLtdmadeitsdebutontheHongKongStockExchangeonSeptember17,2013,raisingHK$1.58billion(US$203.72million),andwasoversubscribedmorethan55times.TheinitialofferpriceofHK$3.15(US$0.41)madesharesattractive,and, thankstogoodpublicityandstrong investor confidence on the earnings outlook, theshare price rose by 17.14% to HK$3.69 (US$0.48) onthefirstdayoftrading.Thelistingcouldprovidefundstoexpandbothproductioncapacityanddistributionnetwork.
MilkmanufacturerChinaHuishanDairyHoldingsCoLtddebutedontheHongKongStockExchangeonSeptember27,2013,raisingHK$10.12billion(US$1.3billion).TheinitialofferpriceofHK$2.67(US$0.34)wasatthetop-endofthepricingrange,makingtheshareslessattractive,andthepricedroppedby3.75%toHK$2.57(US$0.33)onthefirstdayof trading.The fundswillbeused tobuildnewfarmsandamilkpowderplant.
YuanShengTai Dairy Farm, Chinas fourth largestraw milk producer, debuted on the Hong Kong StockExchangeonNovember26,2013,raisingHK$3.29billion(US$424.2million).Thesharepricedroppedby3.7%toHK$2.6(US$0.34)fromtheinitialofferpriceofHK$2.7(US$0.35),duetolowinvestorconfidenceontheearningsoutlook.Thecompanyplans to inject thefunds intonewfarms,includingcornfarms.
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Industry Profile
DuetolimitedopportunitiesforgrowthinNorthAmericaandWestern European markets, international companiescontinuetoexpandandinvestintheAsia-Pacific,whichishighlydiverseinculture,language,consumptionpatterns,population,economicfreedomandlaws.TheF&Bindustryisoneofthelargestcontributorstogrossdomesticproduct(GDP) inmanyAsia-Pacific countries,with eachhavingdistinctive strengths in different segments. China, India,andThailandhavebecomericebowlsoftheregion,thanksto theirhighproductionvolumesand thequalityof theirrice,whichmanyAsiansprefertohomegrownvarieties.
Australia arguably has the most developed market,particularly in processedmeat,wine and dairy products.ItsF&BindustryhasanannualturnoverofA$111billion(US$97.46 billion). High productivity, coupled withconsistently safe and high quality food has contributedto industry growth. Free trade agreements with the US,Malaysia, Singapore and Thailand have ensured greateraccessforAustralianF&Bproductsand thishasboostedexports. Its main F&B exports include cereal products,processedmeat,beveragesanddairyproducts.
In addition, the Governments National Food Plan,launchedonMay25,2013,tohelptheindustrycapitalizeongrowingfooddemandinAsia,willcreatenewexportopportunities through strengthening trade relations withAsian countries. The Australian industry had 225,100employees in 2012/2013,mainly in the processedmeat,beverages, and bakery product segments, AustralianBureauofStatistics(ABS)datashows.
Chinaisoneoftheworldslargestfoodconsumers,withitsprocessedfoodmarketgrowingconsistently.SincejoiningtheWorldTradeOrganization(WTO)in2001,theChineseGovernmenthasopened thegateswider to its enormousmarket,resultinginsteadygrowthinexportsandimports.Despite rapideconomicgrowth,Chinas foodprocessingmarketisstillunder-developed,withonly30%ofChinesefoodproductionprocessed, andmany foreigncompaniesaretakingadvantageofthegreaterdemandforhighqualityprocessedfoodproducts.
Several large corporations have bought smallercompetitors to increase their market share and leveragetheir capabilities and resources. The number of formula
milkpowderproducersdecreasedby31.5%to87in2013,from127 in2012, according to theMinistryof IndustryandInformationTechnology(MIIT).
India is a growing market for processed food imports,which are becoming more popular with the youngerpopulation, especially in urban areas. It is the worldssecond largest food producer, after China. Its abundantagricultural land, cheap labor and friendly regulatoryenvironment have attractedmultinationals to exploit thevastopportunitiesforvalue-added,packagingandexportsinthefoodprocessingsegment.Growingaffluence,risingincomes and changing middle-class lifestyles favor theindustry, particularly the processed and ready-to-eatsegments. However, an inefficient infrastructure andsupply chain, and the seasonality of raw materials areobstaclestoindustrygrowth.
Japanremainsanetimporteroffoodduetorisingcostsoflaborandrawmaterials.Alackoflandandhigheroperatingcostshaveresultedinadeclineinself-sufficiencyfarminginJapan,makingittheregionslargestnetfoodimporter.In the aftermath of an earthquake-triggered tsunami andnuclear plantmeltdown in early 2011, food fears persistas radioactive water leaks are continuously being foundatthestrickennuclearplant,andthiscouldleadtohigherdemandforimportedfood.ManycountrieshaveextendedtheirbansonJapaneseproducts,affectingprocessedfoodbusinessesandeconomicgrowth.Recentparticipation intheTrans-PacificPartnership (TPP) free trade agreementcouldfurtheracceleratetheimportofagriculturalproductsandnegativelyaffectthelocalfarmindustry.
InThailand,F&B is themainmanufacturing sector and,despite frequent political instability, Thailand has madeits mark on the global food industry. It appeals as atourist destination and the high growth rate of its hotelsand restaurants is continuing to support the industry byboostingdemandforF&Bproducts.AsThailandisblessedwithabundantrawmaterials,thefoodprocessingindustryisexpectedtomaintainitsgrowth.
The Philippines processed food sector is one of thelargestindustriesinthecountry,withanabundantsupplyoffruitandvegetables.ThePhilippinesisalsothelargestUSexportmarket inSouthEastAsia and its12th largest
Industry Size and Value
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Industry Profile
globally, mainly for egg and dairy products, accordingto theUSDepartmentofAgriculture (USDA).However,governmenteffortsinbuildingdairyself-sufficiencycouldreduceboth importsandexports.Beerdrinkinghas longbeenpartofthesocialandculturallifeofFilipinosandthePhilippines is the third largestbeermarket inSouthEastAsia.
Asia-PacificprovidesawealthofopportunityfortheF&Bindustryandispoisedtobeoneofthehottestregionsforfoodmanufacturinginthenextfewyears.Risingpurchasingpower and demand for convenience and premium F&Bproducts will help stimulate the development of foodretailinganddistributionintheregion.
Sector Investment
Investment activity in the industry pickedup throughout2013, with some international companies increasingproduction capacities and expanding production linesto strengthen their positions in Asia-Pacific, due to itsemerging middle class and growing spending power. InThailand,US-basedprivateagribusinessgiantCargillIncinvestedUS$10milliontoupgradeitspoultryprocessingfacilities in Saraburi Province, expecting completion byJuly2014.
Austria-based private energy drink producer Red BullGmbHhasobtained approval to sell its coreproducts inChinaandissettingupasmallofficeinShanghai.RedBullwillconductamarketacceptancetestbeforelaunchingitsproducts inChina toensuremarketdemandandincreasebrandawareness.
ThestabilityofIndiasprocessedfoodandbeveragemarkethas attracted multinational companies. Following Coca-Cola Cos (NYSE: KO) US$5 billion 2012-2020 Indianinvestment plan, and as part of its plan to invest Rs330billion(US$5.36billion)create8,000jobsby2020,PepsiCo(NYSE:PEP)willsetupRs12billion(US$195million)beverageplant inChittoordistrict,AndhraPradeshstate.The project will be completed in three phases, the firstphase creating a daily capacity of 1.2million liters.Theexpansion will help to meet growing beverage demandandtostrengthenPepsispositionastheleadingbeverageproducerinSouthAsia.
OnDecember 17, 2013,Coca-ColaAmatil (ASX:CCL)re-enteredtheAustralianbeermarketandintroducednewinternationalandlocalbrands,includingitsownAlehousebrand.Thecompany isoptimisticabout thebeermarket,
despitemanyAustraliansshiftingtheirpreferencestowine.PrivateAustralianF&BproducerLionPtyLtdopened aA$60million (US$52.68million)breweryatGeelong inVictoria,producing1.2millioncartonsofbeerandcreating50 jobs.Theexpansionwill helpLion to capitalizeonagrowingcraftedbeermarketinAustralia.
Policy and Regulatory Environment
The latter half of 2013 saw several changes to Asia-Pacificsregulatorylandscape,whichwillplaysignificantroles in shaping the F&B industry. The PhilippinesGovernmentenacteditsfirstfoodsafetylawonAugust28,2013,adecisionwelcomedbytheindustry.Inanattempttostrengthenitsfoodsafetyregulationsystemandtoprotectconsumers from food-borne andwater-borne illness, thenew regulations will have effects on both foreign anddomestic F&B companies, which need to comply withinternationally recognized standards, such as the CodexAlimentarius Commission, ISO9000 and ISO14000.Punishments for causing food-borne deaths include amaximumsix-yearprisonsentence.
The Indian Government extended its ban on importedgeneticallymodified(GM)processedfooduntilMarch31,2014, claiming that such foodswould affect consumershealth and biodiversity. However, limited imports areallowedforanalysisorresearchpurposeswithpermissionfrom the ministrys apex regulatory body the GeneticEngineeringApprovalCommittee(GEAC).
After the unsolved radiation leakage problem at theFukushimanuclearplantwasexposedtothepublicin2013,manycountrieshaveextendedtheirbansonJapanesefoodproducts,particularlymarineproducts.TheUSFoodandDrugsAdministration(FDA)expandedproductbansfromeightto14prefecturesonSeptember9,2013,whileSouthKorea increasedbans to50JapanesemarineproductsonSeptember6,2013,duetoincreasedpublichealthconcernsover radiation and nuclear contamination issues. Theseexport limitations have negatively affected economicgrowth.
With the F&B regulatory environment changing,particularly in relation to food safety and labeling,companiesneedtorevisetheirpoliciesandstandardsmoreoften to keep pace.The latest free trade agreementwithSouthKoreaonDecember5,2013,willboostAustraliaseconomybyA$653million(US$573.33million)annuallyafter 2030. Under the A$5 billion (US$4.39 billion)agreement,Australiaenjoystariffeliminationonproducts,
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Industry Profile
includingbeef,wine,fruit,andsugar,forthenext15yearsfrom 2015. The agreement will benefitAustralian F&Bproducers as their products become more competitivecomparedwithothercountries.
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Market Trends & Outlook
Population growth, urbanization, and rising incomesare modernizing Asia-Pacific lifestyles and changingthe diets of many people, driving demand for preparedand convenience food products. Middle classes andyounger generations, such as Generation Y andGeneration Z, are more accepting of different productssuch as western foods. Demand for iced coffee drinksinAsia is expected to rise, particularly in Japan, due togrowingmiddle classes and rising incomes.Theaveragemonthly expenditure on coffee and cocoa beverages perJapanesehouseholdgrewby1.96%to728(US$7)in2013,from 714 (US$6.86) in 2012.As Chinas Governmenthasrelaxeditsone-childpolicy,thecountrysdemandforF&Bshouldincreaseatfasterpace,particularlyfordiaryproducts.
More consumers are seeking time-savingmeal solutionsthat do not compromise on quality or taste. Foods thatattractconsumerscomeinbothpreparedandsemi-preparedforms thatcanbe re-heatedathomeor in theworkplaceinjustafewminutes.Withtheincreasingnumberoftwo-breadwinnerhouseholdsandsingle-personhouseholds inmanyAsiancountries,consumptionofavarietyofchilledand frozen, home-meal replacements, ready-to-cook,ready-to-eatandready-to-drinkproducts,andproductsthatcomeinsmallerportionsarerising.
Japans snack market, which was worth 1,106 billion(US$10.63) in 2013, is expecting to grow with productinnovation.Although themarket iswell developed,withmorepeoplearefocusingondietandwellness,particularlytheyoungfemales,futurefocusshouldputonless-oil,less-caloriesproducts.Productswithhealthyimagethatcomein smaller portions could be more appealing to health-consciousconsumers.
Due to increasing health consciousness and risingstandardsofliving,consumersarealsooptingforproductsthatdeliverarangeofbenefitssuchasadded-fiberproductsthatpromotedigestivehealth,andtheyarewillingtopaya premium for quality and healthy products such as tea,bottled mineral water and lemon-lime flavored drinks.Green tea consumption has increased over the past fewyearsinChinaandJapanasmanybelievethatithelpswithweightandhealthmanagement.Manysoftdrinkcompanies
areexploitingtheseopportunitiesbyintroducingflavoredtea,icedteaandteawithherbsandfruit.Withhealthandconvenience trends continuing to gain pace, and withmanufacturers turning to added-value ingredients, themarket for ready-to-drink beverages should see furthergrowthinthenextfewyears.
Consumer Friendly Food Packaging
Packaging is one of the factors influencing consumerspurchasing decisions, and F&B companies consider it acritical component of their branding,merchandising andpromotionalstrategy.Manyoptionshavebeenoffered toconsumers,frommetalcans,tubs,asepticpackaging,andbowlstopouches.Inthebattleformarketshareandretailshelfspace,packaging isapowerfulweapon. Itplaysanimportant part in product innovation, as products withconveniencepackagingaremoreappealing toconsumerswhoareincreasinglylookingforF&Btheycanconsumewhileonthemovetosuittheirbusylifestyles.
Canned soupdemand is declining inAustralia due to itshard-to-open packaging, with the younger generationpreferring soup in stand-up pouches, regarding cannedfoodasold-fashioned.ManyleadingF&Bcompaniesarere-structuring their product ranges and developing newcategories,productsandpackagingdesigns.
Somefoodmanufacturersandpackagersarealsoplacinggreater emphasis on providing quality seals and labelsthatindicateiftheproducthasbeentamperedwithbeforepurchase. Given the number of high profile food safetyscandalsinrecentyears,foodmanufacturersarebecomingmoreawareofmaintaininghigherstandardsofhygieneandfreshnessthroughoutstagesoffoodprocessingtoprotecttheintegrityoftheproduct.
Food Safety Concerns Grow
Withgrowingawarenessofhealthandnutrition,consumersare more sophisticated and looking for new, improvedproducts that will add value to their lives and offer thehighest nutrition value, quality and reliability. Foodscandalswillloseconsumerconfidenceandbrandloyalty,whichtakesfoodproducersalongtimetoregain.
Demand for Convenience and Healthy Products Continues to Grow
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Industry Report - Food & Beverage - March 2014
10
Market Trends & Outlook
Japanfacedexport limitationsafter the2011earthquake,tsunami and nuclear disaster. Food fears persist asradioactive water leaks are continuously being foundat the stricken nuclear plant, leading many countriesto extend their bans on Japanese products, particularlymarineproducts.Theradiationleakageat theFukushimanuclearplantwillcontinuetoaffectJapansexportsanditsreputationforsafe,high-qualityproducewhileitremainsunsolved.
Recentfalselabelingonlocalandimportedfoodproductsandproductsrecalledbyafrozenfoodsupplierhavealsoshaken Japans reputation for safe, high-qualityproduce.Food producer Maruha Nichiro Holdings (TSE: 1334)recalled 6.4 million products on January 2, 2014, afterpesticide was found in its products. With hundreds ofpeople reporting illness, the companys reputation wasbadly affected. The full ramifications of the pesticideincidentarestillbeingassessed.
China is no stranger to food safety scares and concernscontinued after the industrywas rocked by amelamine-tainted milk scandal in 2008, followed by a series ofillegal additive scandals, fake lamb and beef, and long-expiredchickenfeet.Thelatestscandals,inJanuary2014,were the discovery of foxmeat being passed as donkeymeatsoldatWal-MartStoresInc(NYSE:WMT)andtheillegalinjectionofdirtywaterintolamb.Theseincidentshave weakened consumer confidence, shifted consumerpreferences to imported products and big brands, andaffectedthereputationofChinasfoodindustry.ConsumerconfidenceinforeignbigdairybrandswasaffectedbytheFonterra safety scare in New Zealand in 2013, openingopportunitiestolocalbigbrandstoregainmarketshare.
The Chinese Government has introduced regulationsthat require the production of safer and healthier foods.However, the continuing scandals underlined the factthat foodsafetystandardsarestillpoordespitemeasuresto revamp the industry. Dissatisfaction among Chineseconsumersandpoorsupervisionoffoodsafetybysmallerproducerswillcontinue toaffectoveralldemandforandreputationofdomesticproducts.
Market Outlook
MostAsianF&Bindustriesareexpectedtogrowatslowerpace in thefirst half of 2014.ThePhilippines rice self-sufficiencyplanhasbeenpostponedduetoSuperTyphoonHaiyaninNovember2013.Thecountrywillincreaserice
imports for the next fewmonths leading up to the nextharvestseason.Chinaislikelytocontinuerestructuringitsdairyindustrytobuildself-sufficiencyindairyproducts.
A shift in consumption patterns should influencecompanies sales and profit margins. Rising standardsof living and growing awareness of health and nutritionhave ledmanyChinese to shift frompork tobeef, lambandpoultry.Theyarewillingtopaymoreforbetterqualityproducts,benefitinghigh-qualitymeatproducingcountriessuchasAustralia.
Australians have become more accepting of new winebrands and their purchasing decisions are likely to beinfluencedbysalesandpromotions.Thenewpurchasingpattern is helping to drive growth in the sector, withretailers, packagers and processors benefiting fromcompetitioninthemarket.
The health-conscious market will continue to demandmorenutritious,saferandorganicproducts,andthiswillremainakeytrendintheAsianF&Bindustryoverthenextfewyears.MostF&Bcompanieswillfocusonstrategies,includingtheintroductionofnewproductsandimprovingoperationalefficiencytodeliverbettergrowthinthenextfewmonths.
Volatile food commodities prices, uncertain weatherconditions and tighter food safety regulations couldchallengecompaniesprofit.Companieswillneedtoreducecosts and improve operational efficiencieswhile placinga greater emphasis on quality control and regulatorycompliance.QualitycontrolisrapidlybecomingthemainfocusoftheJapanesefoodindustryfollowingtheimpactofradiationexposureonfoodsupply.
ThehighlyprotectedagriculturalsectorpreventedJapanesefood processors sourcing cheaper inputs and thus tightcontrols may stop the industry from regaining domesticfood market as consumers seek lower priced products.M&Aactivityisexpectedtocontinuesolidoverthenextsix months, creating fewer but larger food companies,particularlyinthedairysector.
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Industry Report - Food & Beverage - March 2014
11
Country ProfileAustralia
AustraliasF&Bindustrydidrelativelywelloverthepastsix months, although competition among food makersintensified. Most leading F&B companies experiencedhigher raw material costs and a change in consumerconsumptionpatterns.
Growinghealthconcernsledtolowerdemandforsugarydrinks. Domestic taste and preference for alcoholicbeverages has shifted from beer to wine and spirits,AustralianBureauofStatistics(ABS)datashows.Overallalcoholic beverage consumptionhas beendecliningoverthepastfewyears,leadingproducerstoincreasedomesticpromotionactivitiesorseekopportunitiesabroad.
Industry Size and Value
Thesectorhasexpandedoverthepastfewyearsandisoneof the countrys largestmanufacturing industries.Higherproductivity,consistenthighqualityandgrowingdemandfor premium and healthier food items, has contributedto growth. Despite the stronger Australian dollar, thevalueofF&Bexportsgrewby7.69%toA$20.17billion(US$17.71billion)inthefirstninemonthsof2013,fromA$18.73billion (US$16.44billion)ayearearlier,due tostrongerdemand.Importsgrewby7.55%toA$8.26billion(US$7.25billion)fromA$7.68billion(US$6.74billion),resulting ina7.78%rise in the trade surplus toA$11.91billion(US$10.46billion),fromA$11.05billion(US$9.7billion)ayearearlier.
Dairy Segment
ThedairyindustryisoneoftheleadingfoodindustriesinAustralia.TheABSestimatesthetotalvalueofexportsof
milkanddairyproductsgrewby0.57%toA$1.77billion(US$1.55billion)inthefourmonthsendedOctober2013,fromA$1.76billion(US$1.54billion)ayearearlier,duetoslowerdemandfromAsia.Mostdairyproducts,suchasbutter,wholemilkpowder(WMP),butteroil,andcheddar,haveseenhigherprices.Despitesalesvolumedroppingby14.48%to29,499tonnes,from34,495tonnes,anincreaseinWMP prices led to a 46.17% rise in export value toA$181.98 million (US$159.78 million), from A$124.5million (US$109.31 million) in the four months endedOctober2012.
Wine Segment
Thewinesegmenthasbeenastrongcontributortosectorgrowthduetomajorqualityimprovementandsubstantialmarketingexpenditure.However,theaverageprofitmarginof tenvintners fell to5.9%in2012, from9.6%in2007,according to the Winemakers Federation of Australia(WFA).WithWFAs2014-2016actionplan,whichaimedtoincreaseglobalcompetitivenessandgrowthindomesticandoverseassales,profitmarginshouldimprove.
ABS data shows domestic wine sales fell by 0.24% to453.92million liters in the fiscal year ended September2013,from454.99millionlitersayearearlier,duetolowerdemand for local products.However, sales for sparklingwine grew by 2.92% to 35.59million liters, from 34.58million liters, while those of carbonated wine grew by4.85% to 12.75million liters, from 12.16million liters.Sales of importedwines fell by 4.49% to 78.86millionliters, from 82.57million liters. Despite lower domesticdemand, an increase in imported wine prices led to a12.37% rise in total sales value to A$593.72 million
Sector Overview
Table 2: Australias Processed F&B Trade Statistics for the First Nine Months
2009 2010 2011 2012 2013
Exports A$17.13 billion(US$15.04 billion)A$15.81 billion
(US$13.88 billion)A$17.91 billion
(US$15.72 billion)A$18.73 billion
(US$16.44 billion)A$20.17 billion
(US$17.71 billion)
Imports A$6.89 billion(US$6.05 billion)A$6.69 billion
(US$5.87 billion)A$7.15 billion
(US$6.28 billion)A$7.68 billion
(US$6.74 billion)A$8.26 billion
(US$7.25 billion)
Surplus A$10.24 billion(US$8.99 billion)A$9.12 billion(US$8 billion)
A$10.76 billion(US$9.45 billion)
A$11.05 billion(US$9.7 billion)
A$11.91 billion(US$10.46 billion)
Source: Australian Bureau of Statistics
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12
Country Profile - Australia
(US$521.28million), fromA$528.36million (US$463.9million)inthefiscalyearendedSeptember2012.
Leading Companies
Coca-Cola Amatil Ltd (ASX: CCL)
Coca-cola Amatil Ltd (CCA) is the largest soft-drinkbottler in Australia. Its net revenues fell by 2.07% toA$2.36billion(US$2.07billion)inthefirsthalfof2013,fromA$2.41billion(US$2.12billion)ayearearlier,duetolowerdomesticretailsales.However,salesinIndonesiacontinued to grow following the introduction of newproducts. Despite lower operating expenses, operatingincome fell by 6.92% to A$373.9 million (US$238.28million),fromA$401.7million(US$352.69million),whilenetprofitfellby12.31%toA$215.9million(US$189.56million), from A$246.2 million (US$216.16 million) ayear earlier. The company has set 2014 investment at amaximumA$350million(US$307.3million).
Patties Foods Ltd (ASX: PFL)
Leading frozen foodscompanyPattiesFoodsLtds salesincreased by 3.82% to A$244.8 million (US$214.93million) in the fiscal year ended June 30, 2013, fromA$235.8 million (US$207.03 million) a year earlier.Operating income fell by 54.11%, fromA$31.6 million(US$27.74million)toA$14.5million(US$12.73million),due to increased rawmaterial costs, higher logistics andmarketing expenses, and an impairment loss from itsfrozen fruit business. Increases in operating expensescausedprofittofallby75.41%toA$4.79million(US$4.21million),fromA$19.48million(US$17.1million).LowernetincomeandhighercapitalexpensesreducedfreecashflowtoanegativeA$1.76million(US$1.55million),fromA$151,000(US$132,576.64)ayearearlier.
Bega Cheese Ltd (ASX: BGA)
In the fiscal year ended June 30, 2013, leading dairyproducer Bega Cheese Ltds revenues grew by 8.28%to A$1.01 billion (US$886.77 million), from A$932.9million(US$819.08million)ayearearlier,thankstohigherdemand in domestic and overseas markets. Operatingincome grew by 30.54% toA$35.35million (US$31.04million),fromA$27.08million(US$23.78million),whilenetprofitgrewby24.57%toA$25.45million(US$22.34million),fromA$20.43million(US$17.94million)ayearearlier.BegaCheesehadcashreservesofA$24.24million
(US$21.28million) infiscal 2013, the enviable result ofstrongeroperatingcashflow.
Market Outlook
TheAustralian F&B industry is posed to grow in early2014, due to risingdemand for highquality andhealthyproducts.Increasinghealthconsciousnesswillcreatenewopportunities for F&B exports and formanufacturers inmoredistant countriesand regions, aswell as expansionin existing markets. However, competition will remainintense, especially in the alcoholic beverage segment,forcingproducerstoincreasemarketingefforts,whichwillaffectmargins.
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13
Country ProfileChina
Foodpriceinflationremainedhigh,mainlyduetohigherproduction costs and rising demand from domestic andemerging markets, and intensified competition causedsomecompaniestowithdrawfromthemarket.OnOctober24, 2013, Japan-based dairy company Meiji HoldingsCoLtd (TSE: 2269)withdrew itsmilk formula businessfromtheChinamarketassalesdroppeddramaticallyafterradioactive caesium was found in its products in 2011.However,most leadingF&Bcompaniesfinancialresultsimproved.
Industry Size and Value
An emerging middle class, a growing population andrising standards of living continued to drive a hugewave of consumer spending on F&B.According to theNational Industry Association (CNFIA) exports wereworth US$705.7 million in the first half of 2013, andimportswereworthUS$271.2million.Total F&B sales,including processed agricultural products, foods, liquor,beveragesandfine tea,grewby15.31%,fromRMB36.9billion (US$6.08billion) infirsthalf2012 toRMB42.55billion (US$7.01 billion). Consumption of processedfood increased themost, by 17.5%, to RMB8.42 billion(US$1.39 billion), from RMB7.17 billion (US$1.18billion)ayearearlier.
Beer Segment
Beer production has expanded over the past few yearsasithasgainedpopularity.Productiongrewby4.32%to44.69 billion liters in thefirst tenmonths of 2013, from42.84billionlitersayearearlier,accordingtotheNationalBureauofStatisticsofChina(NBS).Exportsgrewby8%
to203.37millionliters,from188.31millionliters,whileimportsgrewby61.2%to153.43millionliters,from95.18million liters in the first ten months of 2012, thanks togreateracceptanceofforeignbrands.
Dairy Segment
Rapid population growth, improved standards of livingand a more westernized diet provide opportunities fordairymanufacturers.Althoughdomesticdairyproductiongrew by 7.72% to 19.82million tonnes in the first ninemonthsof2013, from18.4million tonnesayearearlier,themarketisexperiencingsupplycrisis,duetodroughtin2013.Growingdemandforimportedmilkpowdersledtoa33.38%rise in imports toUS$20.42million,comparedwithUS$15.31millionayearearlier.
Leading Companies
Tsingtao Brewery Co Ltd (SSE: 600600)
As the biggest brewer in China, Tsingtao Brewery CoLtd controls more than 14% of the Chinese marketand about half of the countrys beer exports. In thefirst nine months of 2013, net sales rose by 10.96% toRMB24.19 billion (US$3.99 billion), from RMB21.8billion (US$3.59 billion) a year earlier, thanks tohigher demand for premium products. Increased salesoffset higher expenses, causing net profit to rise by29.17% to RMB2.17 billion (US$357.74 million), fromRMB1.68 billion (US$276.96 million) a year earlier,whileoperatingincomeroseby4.41%toRMB4.26billion(US$702.3 million), from RMB4.08 billion (US$672.62million).
Sector Overview
Table 3: Sales of Food and Beverages in China (RMB millions)
H1 2012 H1 2013 Rise/Fall (%)
Processed Agricultural Products 23,358.87(US$3.85 billion)26,956.14
(US$4.44 billion) 15.4%
Processed Food 7,167.34(US$1.18 billion)8,421.63
(US$1.39 billion) 17.5%
Liquor, Beverages and Fine Tea 6,375.85(US$1.05 billion)7,172.83
(US$1.18 billion) 12.5%
Source: National Industry Association (CNFIA)
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Country Profile - China
Beijing Yanjing Brewery Co Ltd (SSE: 000729)
Theworldsninthbiggestbrewer,bysalesvolume,BeijingYanjingBreweryCoLtd controlsmore than85%of theBeijing market and has begun to focus on central andwesternregionsofChina,andonGuangdongandFujianprovinces. In the first nine months of 2013, revenuerose by 5.7% to RMB11.86 billion (US$1.96 billion),fromRMB11.22 billion (US$1.85 billion) a year earlier.Despite higher operating expenses, net profit rose by13%toRMB1,002.42million(US$165.26million),fromRMB887.05 million (US$146.24 million) in first ninemonthsof2012.
China Resources Enterprise Ltd (HKSE: 0291)
ChinaResourcesEnterpriseLtd(CRE) isoneofChinaslargestconsumerconglomerates.ItstopbeerbrandSnowhada20%shareoftheChinamarketin2012.Salesroseby8.5%to9.83millionkilolitersinthefirstninemonthsof2013,from9.06millionkilolitersayearearlier,duetohighersalesofSnowbeer.Netsalesvalueroseby14.54%toHK$112.44billion (US$14.5billion), fromHK$98.17billion (US$12.66 billion). Net profit rose by 6.67% toHK$1.92 billion (US$247.56 million), from HK$1.8billion(US$232.08million)ayearearlier,whilethebeerdivisions net profit totaledHK$1.11billion (US$143.12million),upfromHK$878million(US$113.21million).
Market Outlook
Inthefirsthalfof2014,ChinasF&Bindustryisexpectedtocontinuetogrowwellinlinewithhigherlivingstandardsand growing food and beverage consumption, and F&Bexportsandimportsarelikelytoincrease.F&Bcompaniesare in a good position to continue growing, albeit at aslowerpace,withongoinginvestmentinproductbrandingandinnovation.
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Industry Report - Food & Beverage - March 2014
15
Country ProfileIndia
Rising incomes, changing lifestyles and a growingpopulationincreaseddemandforpremiumfoodanddrinks.Indians continued to turn to processed food, owing togreaterlevelsofoverseastravelandtheboomingdomestictourismindustry, leadingtorisingdemandforprocessed,ready-to-eatandready-to-cookfood.
Although the Government has introduced minimumsupport prices (MSP) aimed at helping farmers andconsumers, itsownfoodstockpilinghascausedprices toincreaseandaffectedcompaniesprofitmargins.However,mostleadingF&Bcompaniesearnedhigherprofitsinthefirstninemonthsof2013,thankstogrowingdomesticandoverseasdemand.
Industry Size and Value
Astheworldssecond largest foodproducerafterChina,Indias food processing industry is one of the largestsectors in termsofproduction,consumption,andexportsandimports.Theindustryproducesmainlyprocessedfruitsand vegetables, processed meat, dairy products, cereals,andotherprocessedfoods.
The Directorate General of Commercial Intelligenceand Statistics (DGCI&S) estimates cereals have the
largest market share, 64.39% of the total value ofF&B exports in the six months ended September2013. Huge global demand during the 2013/2014financialyearledtohigherpricesandfavoredtheexportofcereals.
Demandforimportedproductsdeclined,apartfromthosefrom Canada, China and the UK, due to a depreciatingrupee. Processed fruits and vegetables had the largestmarket share, 69.59% or Rs56.27 billion (US$914.39million), of F&B imports in the six months endedSeptember30.TheleastwasprocessedmeatwithRs38.02million (US$617,825). Processed food imports wereRs80.86billion(US$1.31billion).
Cereals and Cereal Preparations Segment
India is the worlds largest producer and exporter ofcerealproducts.TheAllIndiaRiceExportersAssociation(AIREA) estimates India exports ten million tonnes, or9.1%, of its rice production annually. In the sixmonthsended September 2013, exports were worth Rs339.99billion (US$5.52 billion) and imports Rs2.3 billion(US$37.38 million), according to the DGCI&S. Lowerglobalpricesandadepreciatingrupeereducedcompaniesprofitmargins.
Sector Overview
Table 4: Indian Exports by Segment (Rupees)
2011-2012 2012-2013 2013/2014(Apr-Sept)
Processed Fruits and Vegetables 45.07 billion(US$732.39 million)50.85 billion
(US$826.31 million)33.06 billion
(US$537.23 million)
Processed Meat 300.00 million(US$4.88 million)215.61 million
(US$3.5 million)47.89 million
(US$778,213)
Dairy Products 2.89 billion(US$46.96 million)14.12 billion
(US$229.45 million)13.84 billion
(US$224.9 million)
Cereals 309.11 billion(US$5.02 billion)530.36 billion
(US$8.62 billion)326.51 billion
(US$5.31 billion)
Other Processed Foods 300.47 billion(US$4.88 billion)356.97 billion
(US$5.8 billion)133.67 billion
(US$2.17 billion)
Total 669.54 billion(US$10.88 billion)954.46 billion
(US$15.51 billion)507.12 billion
(US$8.24 billion)Source: DGCI&S
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Country Profile - India
Dairy Segment
Indiaistheworldslargestproducerandconsumerofmilkand dairy products, including butter oil, skimmed milkpowder, ghee, milk powder and fat. In the six monthsendedSeptember30,exportswereworthRs13.84billion(US$224.9million) andimportsRs1.02billion(US$16.58million). Indias large and growing dairy market isexpected to attract foreign companies, and increasesin saleswill enable local companies to capitalize on thegrowingmarket.
Leading Companies
Tata Global Beverages (NSE: TATAGLOBAL)
TataGlobalBeverages,formerlyknownasTataTeaLtd,is the worlds second largest tea producer, with 3,000employees in more than 40 countries. In the first ninemonths of 2013, its net sales rose by 4.08% toRs37.02billion (US$601.58 million), from Rs35.57 billion(US$578.01million) ayearearlier,duetogrowingdemandin domestic and international markets. The heightenedperformance reflected an ongoing emphasis on highermargin products and on boosting operating efficiencies.Firstninemonthsconsolidatednetprofitroseby48.22%toRs2.92billion(US$47.45million),fromRs1.97billion(US$32.01million) ayearearlier.
Britannia Industries Limited (NSE: BRITANNIA)
BritanniaIndustriesisaleadingbiscuitmanufacturerwitha30%shareoftheIndianbakerymarket.Itsnetsalesgrewby14.91%toRs14.03billion(US$227.99million) inthefirst quarter ended June 30, 2013, from Rs12.21 billion(US$198.41million) ayearearlier,whilenetprofitleapedby 98.6% year on year from Rs434.5 million (US$7.06million) to Rs862.9 million (US$14.02 million), due toinnovativecost-cuttingmeasuresandeffectivemarketingstrategies.
Market Outlook
The World Trade Organization (WTO) agreed to Indiastoring food for food security and fixing a MSP fromDecember 6, 2013. It also allowed India to grantwheatandricesubsidiestomillionsresidentsunderitsnewFoodSecurityAct,whichcomesintoeffectinApril2014.ThemoveswillcosttheGovernmentRs1.25trillion(US$20.31billion), widening its budget deficit. Nevertheless, food
pricesshouldcontinuetorise,forcingcompaniestoabsorborpassthecoststoconsumers.
The industry is expected to continue to benefit from theDepartmentofCommercestargettodoubleexports.Itwillalsobeboostedby its focusonR&Dto improvequalityand diversification, as well as minimize wastage duringfoodprocessing.
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17
Country ProfileJapan
The F&B industry suffered over the first ten months of2013 due to stagnant exports and a lower demand forimportedfoodandbeverages.Theenvironmentremainedchallenging, with recent false labeling on local andimported food products, the unsolved radiation leakageproblemattheFukushimanuclearplant,exportrestrictionsandrisingcostsofrawmaterials.Adecliningbirthrateandanageingpopulationresultedinashrinkingprocessingandmanufacturingworkforce.
Inrecentyears,foodsafetyandtraceabilityhavebecomethemainfactorsinfluencingJapanesepurchasingdecision,leadingmanytopreferimportedproducts.Peopledemandsafer and higher-quality foods, while increasingly hecticlifestyleshavecreatedgreaterdemandforconvenienceandinstantfood.
Industry Size and Value
Japan,anet importerof food,continued to faceanF&Btradedeficitduetoashortageofagriculturalland,arapidlyageing population, and high labor and production costs.Processedfoodexportsincreasedby0.28%,fromUS$3.6billioninthefirsttenmonthsof2012toUS$3.61billioninthesameperiodin2013,accordingtotheJapanExternalTradeOrganization(JETRO).Processedfoodimportsfellby 9.47% toUS$55.38 billion, fromUS$61.17 billion ayearearlier,while the tradedeficitdeclined toUS$51.77billion,fromUS$57.57billion.Theimpactofthenucleardisaster on exports continued, although the yens dropmadeJapaneseexportersmorecompetitive.
Confectionery Segment
Thegrowingglobaldemandfordairyproducts,especiallyfor health-oriented enriched items, suggests a promisingoutlook for the segment. Trade Statistics of Japan datashowsthatalthoughvolumefell,thevalueofdairyimportsgrew by 17.48% to 131.77 billion (US$1.27 billion) inthefirst11monthsof2013,from112.16billion(US$1.08billion)ayearearlier,duetoadepreciatingyen.Demandforproducts fromThailand,Denmark, Ireland,Germany,Italy, and Finland increased. Exports grew by 31.78%to 1.41 billion (US$13.55 million), from 1.07 billion(US$10.28 million), thanks to higher demand from keycustomerssuchasTaiwan,HongKong,andThailand.
Rice Segment
Japanese rice consumption has been declining and islikelytocontinueonadownwardtrendduetoanageingpopulation,ashiftindietandradioactivecesiumfromtheFukushimadisasterbeingfoundinlocalrice.Inaddition,growingpreferencesforwesternfoodamongtheyoungergeneration, and the proliferation of restaurants andconveniencestoreshaveledto lesscookingathomeandslumping rice consumption.Exports dropped by 34.43%to1.6billion (US$15.37million) in thefirst11monthsof 2013, from 2.44 billion (US$23.45 million) a yearearlier, due to lower overseas demand. Higher demandfor overseas products increased imports by 26.98% to45 billion (US$432.41 million), from 35.44 billion(US$340.54million).
Leading Companies
Ajinomoto Co Inc (TSE: 2802)
Ajinomoto Co Inc, Japans top seasoning maker, is theworlds largest producer of aspartame and producescookingoils,sweeteners,aminoacidsandpharmaceuticals.Due to lower domestic demand, net sales decreased by3.72% to 487.08 billion (US$4.68 billion) in the halfyear ended September 30, 2013, from 505.92 billion(US$4.86billion)ayearearlier.Netprofitfellby46.05%to22.18billion(US$213.13million),from41.11billion(US$395.03 million) a year earlier, due to higher inputcostsandanabsenceofextraordinarygainsontransferofemployeespensionfund.
Yakult Honsha Co Ltd (TSE: 2267)
Yakult Honsha Co Ltd manufactures fermented milkdrinks,fruitjuicesandnoodles,whichitdistributesthroughitshomedeliveryandretailstorechannels.InthefirsthalfofthefiscalyearendingMarch31,2014,netsalesroseby7.74%to172.67billion(US$1.66billion),from160.26billion(US$1.54billion)ayearearlier.Therapidlyageingpopulation and healthy trends in consumer diets drovedemand for functional foods. Net profit increased by80.07%to10.66billion(US$102.43million),from5.92billion (US$56.89million) a year earlier, mainly due togainsfrominvestments.
Sector Overview
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Country Profile - Japan
Market Outlook
The JapaneseF&B industry is expected togrowat slowpace in the first half of 2014, as food safety problemswill likely continue to pull down revenue prospects.ManycountrieshavenotyetliftedtheirbansonJapaneseagricultural products, particularly marine products,and these have affected catches and the processed foodbusiness.TheGovernmentandcompaniesareworkingtorestructure business strategies and restore both domesticand international consumer confidence in local products.The Government expects exports to reach 1 trillion(US$9.61billion)by2020afteritsolvesradiationleakageandfoodsafetyproblems.
Foodmanufacturersmust ensure that rawmaterialsusedare safe to regain customer loyalty. Processed food andwestern cuisine have become popular among Japaneseconsumers, signaling opportunities for manufacturers todevelopcustompackagingforconvenienceandready-to-eatfoods.
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Country ProfileThailand
In 2011, the average household spent 24.77% of itsincomeonF&B,comparedwith25.96%in2009,NationalStatistical Office of Thailand (NSO) data shows. Theperformances of F&B companies were affected by areduction in consumer spending, higher household debtandasluggisheconomy.AslowdowninF&Bproduction,due to drought, prolonged political protests and sharpcapitaloutflow,affectedtheindustry.
MostThaiscuttheirspendingbypreparingfoodathomeand consuming fewer alcoholic beverages. Spendingon home cooking increased to 64.47% of average F&Bexpenditure per capita permonth in 2011, from 54.25%in2009,whilespendingonpreparedfoodfell to29.56%from 37.53%. Many preferred to drink non-alcoholicbeveragesathome,leadingspendingtoincreaseto4.33%from4.05%.
Industry Size and Value
F&BprocessingisoneofThailandslargestmanufacturingindustries, but imports of food, beverages and dairyproducts rose by 5.49% toTHB111.03 billion (US$2.46billion)inthefirstninemonthsof2013,fromTHB105.25billion(US$2.33billion)ayearearlier,duetothestrongerbaht. Food exports, which have grown at a respectablerate over the past few years, fell by 9% to THB374.49billion (US$8.3 billion), from THB416.12 billion(US$9.22billion)ayearearlier,asagriculturalproductionslowed.Demandforsugar,processedmeatandprocessedcrustaceansfellasthestrongerbahtmadeThaiexportslesscompetitive.
Although beverage exports increased by 14.77% toTHB38.47 billion (US$852.26million), fromTHB33.52billion (US$742.6million) in first ninemonths of 2012,
F&B exports declined by 8.14% to THB412.97 billion(US$9.15 billion), from THB449.55 billion (US$9.96billion)ayearearlier.
Rice Segment
Thailandisoneof theworldsbiggestriceproducersbutsuffers from low productivity because of poor farmingtechniques, labor shortages, lack of irrigation, varyingweatherconditions,highinputcostsandinadequatecreditsupport from the Government. The Thai Rice ExportersAssociation estimates exports dropped by 8.81% toTHB96.4billion(US$2.14billion)inthefirstninemonthsof2013,fromTHB105.71billion(US$2.34billion)ayearearlier,duetodroughtaffectingcrops.
Alcoholic Beverages Segment
ThailandusedtobetheonlycountryintheWTOusingtheadvaloremtaxsystemforalcoholproducts,underwhichtaxes are based on production cost rather than alcoholcontent. Since September 4, 2013, drinkers have facedhigher prices for imported products as the Governmentimposed higher alcohol excise taxes, based on the lastwholesale price excluding value-added tax. The newcalculationmethod aimed to increase competitiveness oflocalproducts.
Leading Companies
Charoen Pokphand Foods Plc (SET: CPF)
Thailandsleadingagro-industrialandfoodconglomerateCharoen Pokphand Foods Plcs (CPF) sustained focuson product innovation and geographic expansion helpedachieve robust sales growth. Revenue rose by 8.72%
Sector Overview
Table 5: Thailands F&B Trade for the First Nine Months (THB billions)
2010 2011 2012 2013
Exports 337.07(US$7.47 billion)419.4
(US$9.29 billion)449.55
(US$9.96 billion)412.97
(US$9.15 billion)
Imports 67.35(US$1.49 billion)89.93
(US$1.99 billion)105.25
(US$2.33 billion)111.03
(US$2.46 billion)Source: Customs Department of Thailand
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Country Profile - Thailand
toTHB285.89 billion (US$6.33 billion) in the first ninemonths of 2013, from THB262.96 billion (US$5.83billion)ayearearlier.Despitehighersales,netprofitfellby66.47%toTHB6.8billion(US$150.65million),fromTHB20.28billion(US$449.28million)ayearearlier,duetohigheroperatingexpenses,increasedfinancialcostsandforeignexchangeloses.
Thai Beverage Plc (SGX: THBEV)
ThailandsleadingbrewerThaiBeveragePlc,orThaiBev,produces spirits, beer, non-alcoholic drinks and food. Ithasmorethan20distilleriesinScotland,France,Poland,and Ireland. Despite higher spending on marketing andadvertising, revenue fellby7.13% toTHB111.03billion(US$2.46billion) in thefirstninemonthsof2013, fromTHB119.56billion(US$2.65billion)ayearearlier,duetolowerdemandforbeerandnon-alcoholicbeverages.Netprofit dropped by 22.4% toTHB3.43 billion (US$75.99million),fromTHB4.42billion(US$97.92million)ayearearlier.
Market Outlook
Thailands F&B industry is likely to recover at a slowpaceinthefirsthalfof2014,withtheMinistryofFinanceexpecting the economy to grow by 0.5% due to lowprivate investment and a cutback in consumer spending.Growthwill be affectedbydroughts and shrimpdiseasethatoccurredin2013,andbyashiftinconsumerbehavior.Thehomecookingtrendwillcontinue,whileconsumptiononalcoholicbeverages,especiallydistilledspirits,shoulddrop,duetohighertaxes.
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Country ProfileThe Philippines
PartsofthePhilippinesweredevastatedbySuperTyphoonHaiyan in November 2013, which badly affected manyagricultural and processed food businesses, particularlythoseinmarineandsugarproduction,whichfellandfoodprices increased. One third of the Philippines total riceplantationswere also affected by the disaster, accordingtotheUnitedNationsFoodandAgricultureOrganization(FAO).TheDepartmentofAgriculture(DA)forecastriceproductioncouldgrowat4%forthenextthreeyears,lowerthantheGovernments6%targetforself-sufficiency.
Fundsandfoodaidwereprovidedfromcountriesaroundtheworld tohelpmillionsofvictims tobuild their lives.The Government will need to allocate PHP361 billion(US$11billion)overthenextfouryearstorehabilitatetheaffected areas, according to the National Economic andDevelopmentAuthority(NEDA).
Inthefirsttenmonths,beforethetyphoon,astrongexportperformancebytheprocessedF&Bindustryhelpedboostmanufacturing exports to US$36.79 billion, comparedwithUS$37.99billionforthewholeof2012,PhilippinesNational Statistics Office (CENSUS) data shows. TheGovernment resumed rice exports in 2013 and plans tointroducegeneticallymodifiedriceintwotothreeyearsifnorisksareidentified.
Industry Size and Value
TheprocessedfoodsectorisoneofthePhilippinesbiggestindustriesandhasseensubstantialgrowthovertheyears,thankstogovernmenteffortsinpromotingF&Bproductsandenhancingfoodsafetystandardstointernationallevels.Exports rose by 21.06% to US$1.22 million in the firsttenmonths, fromUS$921.95million a year earlier, duelargelytohigherdemandfromJapan,theUS,andChina,accordingtoCENSUSfigures.
Diary Segment
Rapidpopulationgrowth,higherhouseholdincomes,andgrowing demand for western-style food products haveincreaseddemandfordiaryproducts.Consumptiontotaled925.97millionkginthefirsthalfof2013,whilethefigurefor thewhole of 2012was 1.82 billion kg, theNationalDairyAuthority(NDA)reported.TheGovernmentaimsto
boostproductionandlowerimportsofdairyproducts.Firsthalf2013productiontotaled9.59billiontonnes,comparedwith18.45billiontonnesinfiscal2012,and16.45billiontonnesinfiscal2011.
Lower domestic production and increased internationaldairyproductpricescausedexportvolumestofallto6.33billiontonnesinthefirsthalf,comparedwith132.24billiontonnes in fiscal 2012 and 295.82 billion tonnes in fiscal2011, while export sales dropped to US$10.39 million,comparedwithUS$82.86millionin2012.
Leading Companies
San Miguel Corp (PSE: SMC)
DiversifiedconglomerateSanMiguelCorphasestablishedastrongpresenceinglobalfoodmarkets.Inthefirstninemonthsof2013,itsnetsalesroseby6.66%toPHP542.6billion (US$16.53 billion), from PHP508.7 billion(US$15.5 billion) a year earlier, due to higher demandforprocessedmeat,dairyandcoffee,buttherewaslowerdemand for beer.Beer sales volumedropped by 10% to147.6millioncases,from164millioncases.Consolidatednet income dropped by 59.89% to PHP7.5 billion(US$228.49 million), from PHP18.7 billion (US$569.7million)inthefirstninemonthsof2012,duetoaPHP12.3billion(US$274.72million)lossinforeignexchange.
RFM Corp (PSE: RFM)
RFMCorp,oneofthePhilippineslargestdiversifiedfoodand beverage companies, sawnet sales fall by 8.97% toPHP7.1billion(US$216.3million)inthefirstninemonthsof2013,fromPHP7.8billion(US$237.63million)ayearearlier, due to disposal of itsmeat business in 2012 andbadweather in2013.Lower commodity inputprices cutprocessingcostsand improvednet incomeby19.05%toPHP525million(US$15.99million),fromPHP441million(US$13.44million).
Market Outlook
The Philippines food industry is likely to grow at aslowpaceinthefirsthalfof2014,duetoSuperTyphoonHaiyan that struck on November 8, 2013. Agricultural
Sector Overview
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Country Profile - The Philippines
output is expected to fall in the near term and importsshould increase to meet demand, particularly for rice.Foodpriceswill continue to increase,due to insufficientsupply.Leadingplayersintheindustryarelikelytoexpandbusinessoperationsandtoinvestmoreoverseastoobtainabiggersliceoftheglobalmarket.
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Currency Conversion Table
Currency exchange rates as of January 21, 2014
Currency Unit US$ per Unit Units per US$
US Dollar (US$) 1 1
Australian Dollar (AS$) 0.877991 1.138964
Chinese Renminbi (RMB) 0.164859 6.065803
Hong Kong Dollar (HK$) 0.128936 7.755801
Indian Rupee (Rs) 0.016250 61.537516
Japanese Yen () 0.009609 104.072316
Philippines Pesos (PHP) 0.022154 45.139594
Thai Baht (THB) 0.030465 32.824996
New Zealand Dollar (NZD) 0.824592 1.212720
Source: Federal Reserve Bank of New York
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The Scope Of This ReportThisreportexaminesthefoodandbeverageindustriesintheAsia-Pacific,withafocusonAustralia,China,India,Japan,
Thailand and the Philippines.As part of our definition, discussion and analysis, a number of industry segments are
examinedincludingagribusinessandfoodprocessing.Thereportaimstopaintapictureofthecurrentenvironmentand
industrydevelopmentusingavailabledataandbyexaminingkeypubliccompaniesineachsegment.
Research analysts drawon a range of credible industry and companydata sources aswell as news and information
servicestoresearchandanalyzethecurrenttradingenvironment,industrylandscapeandmarkettrendsandoutlookfor
aparticularsector.Primarysourcesareused,unlessotherwiseindicated,andincludecompanydata,e.g.annualreports
andcompanyfinancialresults;macroeconomicandtradedata;dataandinformationfromglobalandcountryregulatory,
industryandtradebodies;governmentdata;andreportsfromindustryorganizationsandprivateresearchorganizations.
Industriescoveredbytheindustryreportsaredefinedbystandardindustryclassificationsystemsandleadingcompanies
areidentifiedonthisbasis.ThefollowingSICcodesarerelevanttotheindustry:2013(SausagesandOtherPrepared
Meats);2015(PoultrySlaughteringandProcessing);2023(Dry,Condensed,andEvaporatedDairyProducts);2024(Ice
CreamandFrozenDesserts);2026(FluidMilk);2043(CerealBreakfastFoods);2044RiceMilling);2052(Cookiesand
Crackers);2064(CandyandOtherConfectioneryProducts);2082(MaltBeverages);2083(Malt);2084(Wines,Brandy,
andBrandySpirits);2086(BottledandCannedSoftDrinksandCarbonatedWater);2091(CannedandCuredFishand
Seafood);2092(PreparedFreshorFrozenFishandSeafood)and;2098(Macaroni,Spaghetti,Vermicelli,andNoodles).
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Key References
25
Global
US Department of Agriculture (USDA)TheUSDAisthegovernmentagencythatprovidesexpertise,resourcesandinformationfortheagriculturalproductionsectorintheUS.http://www.usda.gov
World Trade Organization (WTO)Theglobalinternationalorganizationdealingwiththerulesoftradebetweennationsthataimstoliberalizetrade,negotiatetradeagreementsandsettletradedisputes.http://www.wto.org
Australia
Australian Bureau of Agricultural and Resource Economics (ABARE)AgovernmenteconomicresearchagencythatprovideseconomicanalysisandforecaststoenhancethecompetitivenessoftheAustralianagricultural,mineral,energyandforestryindustries.http://www.abare.gov.au
Australian Bureau of Statistics (ABS)AnAustraliangovernmentagencyresponsibleforcollecting,collatingandanalyzingnationalstatistics.http://www.abs.gov.au
Australia Food and Grocery Council (AFGC)AFGCisanationalorganizationresponsibleforthepackagedfood,drinkandgroceryproductsmanufacturers.http://www.afgc.org.au
Australian Trade Commission (Austrade)AustradeistheAustralianGovernmentstradeandinvestmentdevelopmentagency.http://www.austrade.gov.au
Meat and Livestock Australia (MLA)MLAisaproducer-ownedcompanythatprovidesservicestotheAustralianredmeatindustry,includingtoproducers,processors,exporters,liveexportersandretailers.http://www.mla.com.au
National Food Industry Council (NFIC)Anon-governmentagencycreated todrive the implementationofAustraliasNationalFoodStrategy.Thecouncil isresponsibleforprovidingstrategicdirection,settingprioritiesandencouragingcompetitivenessandgrowthbyworkingcloselywithfoodbusinesses,industrybodiesandgovernmentagencies.http://www.nfis.com.au
China
China National Food Industry Association (CNFIA)AnationalindustryregulatoryorganizationthatpromotesthedevelopmentofChinasfoodindustryandaimstosatisfytheneedsofpeopleinurbanandruralareas.http://www.chinafoods.com
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Ministry of Land and Resources (MOLAR)Anationalagencyresponsiblefortheplanning,administration,protectionandrationalutilizationofnaturalresourcessuchasland,mineralandmarineresourcesinthePeoplesRepublicofChina.http://www.mlr.gov.cn/mlrenglish
National Bureau of Statistics (NBS)Agovernmentagencyresponsibleforconductingstatisticalsurveysonthenationaleconomyandsocialdevelopment.http://www.stats.gov.cn
India
Associated Chambers by Commerce and Industry of India (ASSOCHAM)ASSOCHAMrepresentstheinterestsofvariousindustriesandtradeinIndiaandworkswiththeGovernmentonpolicymatters;italsointeractswithinternationalorganizationstopromotebilateraltradeforeconomicdevelopment.http://www.assocham.org
India Brand Equity Foundation (IBEF)A public-private partnership between the Ministry of Commerce and Industry, the Government of India, and theConfederationofIndianIndustrywhoseprimaryobjectiveistobuildpositiveeconomicperceptionsofIndiaglobally.http://www.ibef.org
Indian Department of CommerceAgovernmentdepartmentundertheMinistryofCommerceandIndustryresponsibleforthecountrysexternaltradeandallmattersconnectedwithit,includingcommercialrelationswithothercountries,interstatetrading,exportpromotionalmeasuresandthedevelopmentandregulationofexport-orientedindustriesandcommodities.http://commerce.nic.in
Ministry of Food Processing Industries (MOFPI) Themaincentral agencyof theGovernment responsible fordevelopinga strongandvibrant foodprocessing sector,withaviewtocreatingjobopportunities,particularlyinruralareas.Itenablesfarmerstoreapthebenefitsfrommoderntechnology,createsurplusesforexportandstimulatedemandforprocessedfood.http://www.mofpi.nic.in
Food Safety and Standards Authority of India (SFFAI)Foundedin2006,SFFAIisanationalauthorityresponsibleformattersconcerningthefoodsafety.Itaimstoregulatemanufacture,storage,distributionchannelsandimport,andensureavailabilityofsafeandwholesomefoodforhumanconsumption.http://www.fssai.gov.in
Japan
Japan External Trade Organization (JETRO)AgovernmentrelatedorganizationthatworkstopromotemutuallybeneficialtradeandinvestmentbetweenJapanandtherestoftheworld.http://www.jetro.go.jp
Ministry of Agriculture, Forestry and Fisheries (MAFF)Agovernmentbodythatundertakesadministrationrelatedtoagricultural,forestryandfisheriesproducts.http://www.maff.go.jp/eindex.html
Ministry of Finance (MOF)TheMinistryofFinanceisresponsibleforimplementingJapansfiscalandmonetarypolicies.http://www.mof.go.jp/english
Economic and Social Research Institute (ESRI)Aninstitutioncreatedtoexecuteresearchprogramscoveringeconomicpolicyissuesaswellassocialpolicyissues.http://www.esri.cao.go.jp/index-e.html
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Statistics Bureau of JapanTheStatisticsBureauof Japan is Japansnational statisticalagencyand is theofficial sourceof Japanesesocialandeconomicstatistics.http://www.stat.go.jp
Thailand
Ministry of Commerce (MOC)Foundedin1892,MOCisresponsibleformattersconcerningthecountrysexternaltradethatincludesinterstatetrading,exportpromotionalmeasuresandthedevelopmentandregulationofexport-orientedindustriesandcommodities.http://www.moc.go.th
Department of Foreign Trade (MFA)AgovernmentagencyundertheMinistryofForeignAffairsandTradethatformulatespolicyrecommendationsandactionplansonissuesrelatedtoforeigntradeandmarketingand,intheprocess,providesstrategicdirectionsandmeasurestopromoteexports.http://www.mfa.go.th
National Economic and Social Economic Development Board (NESDB)AcentralplanningagencythatundertakesstudiesonThailandseconomyanddrawsupplansforitsdevelopment.TheagencywasestablishedundertherecommendationoftheWorldBankin1959.http://www.nesdb.go.th
National Food Institute (NFI)Anon-profitandindependentnetworkorganizationoftheMinistryofIndustry.ItsgoalistopromoteanddeveloptheThaifoodindustrytoenhanceitsefficiencyandglobalcompetitiveness.http://www.nfi.or.th
National Innovation Agency (NIA)Foundedin2003,NIAisanationalorganizationresponsibleformattersconcerningtheinnovationprocess.Itsgoalistoencourageeconomicrestructuringandsocialdevelopmentaswellaspromotingnationalcompetitiveness.http://www.nia.or.th
Thai Food Processors Association (TFPA)Established in 1970, TFPA is a private non-profit organization that responsible for the food processing industry inThailand.http://www.tfpa.or.th
The Philippines
Center for International Trade Expositions and Missions (CITEM)CITEMistheexportpromotionsarmofthePhilippineDepartmentofTradeandIndustry(DTI).
Department of Trade and Industry (DTI)Agovernmentagencyformedin1898toserveastheprimarycoordinatorforthefacilitationandpromotionoftrade,industryandinvestmentactivities.http://www.dti.gov.ph
National Statistical Coordination Board (NSCB)Thecountryspolicy-makingandcoordinatingbodyonstatisticalmatters.http://www.nscb.gov.ph
National Statistics Office (NSO)NSO is themajor statistical agency responsible in collecting, compiling and publishing all censuses on population,agriculture,commerceandindustry.http://www.census.gov.ph
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Comparative Company Data | ASIA-PACIFIC
Notes to Comparative Data- All figures are in United States dollars.
- All figures are as reported by the company.- N/A = Data Not Available.
- N/L = Not Listed.
- Companies ranked by total revenue for the full year most recently reported.
Definitions- Total Revenue = All revenues, including net sales, operating revenues, interest income, royalties, excise taxes etc.
- EBITDA = Earnings before interest, taxes, depreciation and amortization.
- EPS Cont Operations = Earnings Per Share as reported by company excluding extraordinary items.
- Total Current Assets = All assets expected to be realized within the next year, includes cash, accounts receivable and inventories.
- Long Term Debt = Debt due to be paid at a date more than one year in the future.
- Return on Equity = The companys earnings divided by its equity (book value).
- Profit Margin = The companys net income as a percent of revenues.
Company Country Ticker Exchange Primary SIC Other SICs
Kirin Holdings Co Ltd Japan 2503 TSE 2082 2084 2085 2086 5143 2834
Suntory Holdings Ltd Japan 2085 2084 2082 2086 2087 5812
Asahi Group Holdings Ltd Japan 5202 TSE 2082 2085 2086 2834 4214 4213
Yamazaki Baking Co Ltd Japan 2212 TSE 2051 2099 5411 5812 6411 3556
Nippon Meat Packers Inc Japan 2282 TSE 2011 2013 2015 211 251 2038
Morinaga Milk Industry Co Japan 2264 TSE 2026 2024 2023 4212 4213 4225
Kewpie Corp Japan 2809 TSE 2035 2032 2033 2099 4212 4222
Nisshin Seifun Group Inc Japan 2002 TSE 2041 2045 2048 2099 2899 1541
Itoham Foods Inc Japan 2284 TSE 2013 2011 2015 2038 2099 7363
Nissin Food Holdings Co Ltd Japan 2897 TSE 2099 2098 2038 2034 6531 7992
Company Total Revenue - FYE - 1 Total Revenue - FYE - 2 Total Revenue - FYE - 3 EBITDA - FYE - 1 EBITDA - FYE - 2 EBITDA - FYE - 3
Kirin Holdings Co Ltd $25,382,424,150 $26,771,721,841 $26,774,292,529 N/A N/A N/A
Suntory Holdings Ltd $21,497,462,893 $23,295,889,991 $21,421,049,478 N/A N/A N/A
Asahi Group Holdings Ltd $18,333,729,061 $18,901,656,899 $18,311,691,214 N/A N/A N/A
Yamazaki Baking Co Ltd $11,047,333,927 $12,053,680,326 $11,411,975,398 N/A N/A N/A
Nippon Meat Packers Inc $10,913,395,061 $12,407,428,500 $11,959,663,012 $510,140,154 $621,722,147 $654,127,285
Morinaga Milk Industry Co $6,307,900,285 $7,049,829,329 $7,040,738,384 N/A N/A N/A
Kewpie Corp $6,109,700,058 $6,238,703,756 $5,617,493,977 N/A N/A N/A
Nisshin Seifun Group Inc $4,860,756,907 $5,387,807,553 $5,122,254,043 N/A N/A N/A
Itoham Foods Inc $4,682,156,639 $5,454,075,819 $5,506,680,323 N/A N/A N/A
Nissin Food Holdings Co Ltd $4,084,290,133 $4,640,656,010 $4,527,808,054 N/A N/A N/A
Company Net Income - FYE - 1 Net Income - FYE - 2 Net Income - FYE - 3 EPS - FYE - 1 EPS - FYE - 2 EPS - FYE - 3
Kirin Holdings Co Ltd $652,482,151 $95,714,177 $140,079,901 $0.68 $0.10 $0.15
Suntory Holdings Ltd $425,301,144 $809,105,912 $492,099,193 $0.62 $1.19 $0.72
Asahi Group Holdings Ltd $663,918,411 $711,918,612 $652,575,141 $1.43 $1.53 $1.40
Yamazaki Baking Co Ltd $125,276,387 $103,674,206 $156,431,162 $0.57 $0.47 $0.71
Nippon Meat Packers Inc $175,612,750 $142,081,796 $202,049,322 $0.85 $0.67 $0.95
Morinaga Milk Industry Co $53,519,263 $56,174,425 $74,438,588 $0.21 $0.22 $0.30
Kewpie Corp $148,702,514 $121,186,822 $126,575,792 $0.99 $0.80 $0.83
Nisshin Seifun Group Inc $146,046,985 $162,452,340 $171,327,102 $0.59 $0.65 $0.69
Itoham Foods Inc $44,225,946 $25,112,698 $5,772,493 $0.19 $0.10 $0.02
Nissin Food Holdings Co Ltd $201,177,374 $225,989,905 $250,656,610 $1.83 $2.05 $2.27
Company Total Current Assets - FYE - 1Total Current Assets -
FYE - 2Total Current Assets -
FYE - 3Long-Term Debt -
FYE - 1Long-Term Debt -
FYE - 2Long-Term Debt -
FYE - 3
Kirin Holdings Co Ltd $9,166,353,672 $9,795,771,644 $8,938,927,073 $8,923,579,876 $10,783,332,097 $7,164,925,894
Suntory Holdings Ltd $8,745,905,682 $9,979,627,634 $7,595,234,533 $5,695,489,508 $6,961,083,930 $5,808,127,757
Asahi Group Holdings Ltd $6,144,069,536 $5,907,258,822 $5,176,465,018 $2,479,241,765 $2,589,748,842 $2,620,664,559
Yamazaki Baking Co Ltd $2,628,319,504 $2,635,183,032 $2,511,983,997 $662,095,576 $611,061,430 $797,191,595
Nippon Meat Packers Inc $3,573,467,118 $3,955,469,442 $3,832,584,969 $708,980,861 $878,834,731 $1,062,863,246
Morinaga Milk Industry Co $1,358,766,174 $1,499,423,149 $1,253,790,255 $747,818,604 $1,016,381,613 $1,063,092,696
Kewpie Corp $1,609,292,457 $1,424,987,220 $1,432,836,052 $130,651,570 $14,915,893 $24,425,442
Nisshin Seifun Group Inc $2,330,968,770 $2,601,821,850 $2,357,435,316 $34,217,759 $25,807,564 $1,751,070
Itoham Foods Inc $1,281,453,458 $1,348,966,390 $1,446,432,105 $283,483,513 $206,594,612 $253,506,627
Nissin Food Holdings Co Ltd $1,564,947,641 $1,850,683,972 $1,740,479,021 $81,217,829 $156,771,506 $156,750,954
Company Return on Equity (Most Recent Yr) Profit Margin (Most Recent Yr) Date FYE - 1 Date FYE - 2 Date FYE - 3
Kirin Holdings Co Ltd 5.75 2.57 31-Dec-2012 31-Dec-2011 31-Dec-2010
Suntory Holdings Ltd 6.99 1.98 31-Dec-2012 31-Dec-2011 31-Dec-2010
Asahi Group Holdings Ltd 8.30 3.62 31-Dec-2012 31-Dec-2011 31-Dec-2010
Yamazaki Baking Co Ltd 4.64 1.13 31-Dec-2012 31-Dec-2011 31-Dec-2010
Nippon Meat Packers Inc 5.61 1.61 31-Mar-2013 31-Mar-2012 31-Mar-2011
Morinaga Milk Industry Co 4.43 0.85 31-Mar-2013 31-Mar-2012 31-Mar-2011
Kewpie Corp 7.09 2.43 30-Nov-2012 30-Nov-2011 30-Nov-2010
Nisshin Seifun Group Inc 4.89 3.00 31-Mar-2013 31-Mar-2012 31-Mar-2011
Itoham Foods Inc 3.66 0.94 31-Mar-2013 31-Mar-2012 31-Mar-2011
Nissin Food Holdings Co Ltd 6.09 4.93 31-Mar-2013 31-Mar-2012 31-Mar-2011
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