Noodle major Nissin to enter Chinese potato chip market

The Japanese snacks giant sells its lines in 80 countries, and is currently seeking to expand in greater China through acquisitions and new product development.

In March it bought a majority stake in MC Marketing & Sales, a food and beverage wholesale company that operates across Hong Kong and Macao.

It is now looking to manufacture chips made from locally sourced potatoes at an upcoming facility in the southern province of Guangdong ,alongside its existing noodles plant. The expansion will be managed by Nissin’s Hong Kong subsidiary.

"The Chinese market shines as its growth potential still remains big​," said regional managing director Kiyotaka Ando, adding that it will begin with small-scale production before gradually expanding capacity.

It will market potato chips in flavours that have been popular in Japan, including tastes taken from its Cup Noodles range.

Osaka-based Nissin has earmarked Greater China as being central to its expansion plans after pledging to spend JPY150bn (US$1.4bn) on domestic and international manufacturing between 2016 and 2020, including two new plants in China and Hong Kong.

Though it is a market leader for instant noodles in its native Japan, it is finding China altogether tougher, with Tingyi Holding, the world’s biggest manufacturer enjoying a 40% share of a 38.5bn servings segment—the world’s biggest.

The market dynamics have been changing over recent years, though, and Tingyi has regularly reported declining revenues in the face of cheap local competition

The company that invented the instant cup noodle recently announced plans to spin off its China and Hong Kong businesses in an IPO expected to raise some US$200m to fund more partnerships and acquisitions. The Hong Kong unit will also extend Nissin’s sales and distribution network, and enlarge its production and research capabilities.

More from China…​

‘Informed’ Chinese millennials shun Asian fruit in their juices​

Only a quarter of Chinese millennials say they prefer fruit juice made with fruit grown in Asia, compared to 60% who favour American fruit, according to a survey commissioned by Welch’s Global Ingredients.​

The findings highlight opportunities for manufacturers to create differentiated fruit juice products that will resonate with Chinese millennials.

The canvassing, by Surveygoo, showed the demographic to be knowledgeable about provenance and nutrition, and have clear ideas about what they find appealing in a product. 

They appreciate the taste and goodness of 100% fruit juice and are familiar with polyphenols, the beneficial plant nutrients found in super-fruits.

The results found that the provenance of a juice is of greatest importance to these consumers, with 84% of respondents stating that they believe it is important to know the origin of the fruit used to make their juice.

They also indicated that health is a leading priority for Chinese juice-drinking millennials, with 78% saying that they looked for the nutrition and health aspects of their products, ahead of those who cited good taste. The respondents ranked milk and pure fruit juice as the two healthiest choices in a list of popular beverages.

This positive attitude towards 100% juice reflects a wider trend in the Chinese fruit juice and drinks market—according to Euromonitor, sales of 100% juice in China have witnessed compound annual growth of 14.6% over the past five years, second only to coconut water.

Heart, digestive and mind health were ranked as the three health benefits Chinese millennial drinkers are most interested in getting from their fruit juice. In addition, 61% of respondents said they are more likely to buy a fruit juice if it delivers polyphenols, and 77% said they drink super-fruit juices because of the health benefits they provide.

Wayne Lutomski, a vice-president at Welch’s, said the survey confirmed what anecdotal trends on the ground in China.

“Millennial fruit juice drinkers are looking for products that are made in the USA. They equate American goods with high quality, and brands that highlight this on-pack and in other marketing activities could gain an edge in China’s competitive juice market​,” he said.

Detection Technology expands Beijing plant​

X-ray imaging manufacturer Detection Technology has completed a 20% expansion of its Beijing factory to increase production capacity to meet demand forecasts.​

The 700m increase to its production area will support the company’s growth target to increase sales by at least 15% during the mid-term.

“Our aim has always been to have our production capacity evolve with fast-paced demands of the marketplace. When designing the factory and its expansion, we put specific emphasis on the highest level of flexibility for quick volume and product mix changes​,” says Kai Utela, vice-president of operations.

“With the continuous improvement of manufacturing technologies and processes, and understanding how designs and materials affect manufacturability, we ensure that our solutions meet the highest standards​.”

Currently, the factory produces more than 600 varieties of high-end and standard X-ray imaging solutions for over 200 customers worldwide. Monthly shipments number tens of thousands.