Tetra Pak will invest EUR60m (US$80.05m) to establish a packaging materials plant in Hohhot, China, to support the country's growing dairy industry.

The group, which specialises in the production of packaging for food and beverage manufacturers, said that the facility will have an initial capacity of 8bn packages each year. Tetra added that the plant is expected to begin production in the fourth quarter of 2008.

Commenting on the investment during a visit to Hohhot, Tetra Pak CEO Dennis Jönsson said: "This investment is a further demonstration of our commitment to helping customers grow their dairy and beverage industry with our unique offering of processing and packaging solutions, on-the-ground support and more than 50 years of market experience."

The facility will primarily serve customers in the north of China, Tetra Pak China MD Hudson Lee explained. This, he said, will free up southern production capacity for consumers in adjacent regions. "With a larger production footprint, we will offer faster delivery and increased flexibility for customers all over China," Lee said.

Tetra Pak has identified the Chinese dairy sector as offering considerable scope for future growth. The group has estimated that the Chinese dairy industry will grow an average of 15% over the next five years.