Ever-Rising Processed Food Safety

Rapid and sound development

In recent years, China's food industry has maintainedfast and sound growth, with a steady increase in economicbenefits, according to the Information Office of the StateCouncil. At present, China has 448,000 enterprises engagedin foodstuff production and processing. Among them,26,000 enterprises of designated scale occupy 72% of themarket, taking the leading role in terms of output and salesrevenue; 69,000 are enterprises not up to the designatedscale and those with more than ten employees, taking up amarket share of 18.7%; and 353,000 are small businessesor workshops with fewer than ten employees, with a marketshare of 9.3%. (See Figure 1)

Statistics show that, in 2006, industrial food enterprisesof designated scale generated RMB 2,158.695 billion yuan ofoutput value (excluding tobacco), accounting for 6.8% of thenational industrial output value, and up 23.5% year on year.

The average annual industrial added value and profitof processing enterprises of grain,oil, meat and dairy products allexceeded 20%. The outputof major foodstuffs in2006 were: wheat flour,51.93 million tons;edible vegetable oil,19.855 million tons;fresh frozen meat,11.125 million tons;dairy productS,14.596 million tons;beer, 35.152 millionkl; and soft drinks,42.198 million tons.These figures show risesof 28.2%, 17.5%, 24.0%,23.5%, 4.7%and 21.5% year

In the first six months of 2007, the accumulated outputvalue of the food industry amounted to RMB 1,281.62 billionyuan, up 29.9% as compared with the corresponding periodlast year. The output of beer, edible oil, soft drinks andgourmet powder led the world.

At present, the development of China's food industrydisplays the following features: One, the processingtechniques and equipment of some food enterprises reachor approach the advanced international level. Two, qualitycontrol of the enterprises has become more scientific andstandard. Three, the structure of products is being improvedto cater to the increasingly diverse demands of consumers.

Great importance attached on quality control

The food processing enterprises in China has beenattaching great importance to products quality and safety.Along with related authorities, the food processing industrystrengthens supervision and regulation in a bid to create afaithful system and outstanding brands. This year, quite anumber of food processing companies have witness a rapidgrowth in products export on the basis of strict qualitycontrol.

Take Henan Shuanghui Investment & DevelopmentCo., Ltd. (Shuanghui) for example. Shuanghui is the onlycompany in Henan Province to export cloot products to Japan.Since early 2007, Luobe Inspection and Quarantine Bureauin the province has assisting the company in taking effectivemeasures to reinforce supervision and inspection, creatinga faithful system, forming an export brand, and ensure the

quality and safety of meat products exported to Japan. Themove has greatly driven up the export of Shuanghui Group toJapan in spite of the severe export standard. From January toJune, the export hit 3,758 tons, valued at US$ 13.17 million,respectively surging 103.13% and 85.34% year on year.

Shuanghui carries out a severe standard in not onlyraw materials, equipment, tools, and workshops, but alsoproduction procedure in an effort to meet the standardsystems such as HACCP (Hazard Analysis Critical ControlPoint) and SSOP (Sanitation Standard Operation Procedures).In particular, the group strictly supervises the processing ofcooked meat products. The bureau even heads for slaughterand processing workshops for blood sampling and epidemicinspection in order to take effective control of variousprocedures.

After the production is over, the group always carefullyinspects finished products. However, Shuanghui Group isjust one of numerous excellent food processing companies inChina. These companies, along with related regulators, haveraised the quality stably in the food industry.

Continuius improvement of food quality

One, the acceptance rate of foodstuffs on the whole issteadily rising. The rate was 77.9% in the 2006 nationaIfoodstuffs sample survey, and it rose to 85.1% in a similarsurvey in the first half of 2007. The level of food quality andsafety remains stable, with a gradual upturn. (See Figure 2)

Two, the quality of food produced nationwide isimproving. In the first half of 2007, the 31 provinces,autonomous regions and municipalities directly under theCentral Government on the Mainland of China reported anaverage 89.2% acceptance rate of foodstuffs, and the figure in14 of them surpassed 90%.

Three, the quality of food in key sectors is fairly high.Thanks to the country's endeavors to improve the work of foodproducers and processors, the quality of 525 kinds of foodstuffsin 28 categories has been enhanced to various degrees, withremarkable progress in the quality of food with a large dailyconsumption. According to statistics, the ten foodstuffs withthe largest consumption are edible oil, fat and fat products;alcoholic beverages; aquatic products; processed grain products;soft drinks; meat products; dairy products; seasonings; starchand starch products; and sugar. In the first half of 2007, samplesurveys showed a 90% or higher acceptance rate of all the aboveten foodstuffs except aquatic products, whose acceptance ratewas 85%. That of meat products was 97.6%. (See Figure 3)

Four, quality Food is dominating the Market. Alongwith the development of the food industry, the scale offood producers keeps growing, production is becomingmore concentrated, and the quality of foodstuffs of largeand medium-sized producers is sound. In 2006, the top100 revenue earners held 24.9% of the total sales of thefood industry; the top ten dairy producers generated 54.7%of the total revenue of the dairy industry; the top ten soft-drink producers generated 39.5% of the total output of thatindustry; the top ten sugar makers produced 43.6% of thetotal output of the sugar industry; the top 50 meat producersaccounted for 70% of that industry in terms of productioncapacity and sales; the eight beer brewery groups, each witha production capacity of over one million kl, produced 57%of the national beer output; the ten largest wineries produced62.1% of the national output; and the three largest instantnoodle producers occupied 76% of the Chinese market.