Swiss food behemoth Nestlé will increase investment in China after the country's entry into the World Trade Organization.

Speaking at a recent ceremony to launch a R&D centre in Shanghai, Josef M. Mueller, head of Nestlé's China operations, explained: "Our business in China will increase faster than the country's economic growth considering the vast market potential and rich tradition for good food in the country."

The centre, built with an investment of around 50m yuan (US$6m), is the company's second in Asia and Rupert Gasser, executive VP of Nestlé, told Business Weekly that the applied science and nutrition research that will take place at the centre will enable the development of affordable and nutritious food products to cater for Chinese consumers. A further investment of 30m yuan has been earmarked for the centre.

Nestlé also recently formed a new joint venture with Haoji Food Co in Sichuan Province, the second largest chicken bouillon producer in China, in which it will control a 60% stake.

This move follows Nestlé's 1999 acquisition of an 80% stake in the country's foremost chicken bouillon producer, Shanghai-based Totole Group.

Nestlé currently operates 18 plants in China, and 99% of its products sold on the domestic market are locally made. Last year, the company reported sales in the country of US$570m.


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