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May 29, 2002

USA/CHINA: DuPont Protein Technologies expands soy protein business in China

Wilmington, Del.-based DuPont today announced the expansion of its DuPont Protein Technologies (DPT) business in China, to produce and market soy protein for mainstream consumer foods. The announcement includes a Letter of Intent (LoI) to form a joint venture with the Henan Luohe Shineway Industry Group, and a cooperative agreement with the Zhengzhou government to establish the DuPont Zhengzhou Protein Co. in Zhengzhou, located in Henan Province.

Wilmington, Del.-based DuPont today announced the expansion of its DuPont Protein Technologies (DPT) business in China, to produce and market soy protein for mainstream consumer foods.

The announcement includes a Letter of Intent (LoI) to form a joint venture with the Henan Luohe Shineway Industry Group, and a cooperative agreement with the Zhengzhou government to establish the DuPont Zhengzhou Protein Co. in Zhengzhou, located in Henan Province.

Under the LoI, the two businesses plan to build a new, innovative facility in Luohe to manufacture soy protein.

The Zhengzhou agreement includes the existing assets of a state-owned site, formerly Zhengzhou Oil Chemical Group Co., that will produce soy protein to satisfy the growing market for processed meat, food and beverage products in China and for export to the Asia/Pacific region as part of DPT’s global supply network. Estimated total investment in the Zhengzhou facility will be about US$20m.

The Shineway Industry Group is the largest meat processor in China. Initial applications would be processed meat products.

“We have a strong commitment to the growth of our businesses in China, particularly in our aggressive growth areas such as food ingredients,” said Charles O. Holliday, Jr., DuPont chairman and CEO: “With soy protein consumption in China expected to grow at more than 10% per year, the excellent relationships we have established with the Shineway Industry Group and Zhengzhou government, coupled with our proprietary technology to develop better tasting, better-for-you soy protein, will allow us to meet the growing needs of Chinese consumers with mainstream foods they can enjoy throughout the day.”

Last year, DPT acquired a facility to produce soy protein in Yun Meng County. While the jv will be dedicated to meeting the protein needs of the Luohe Shineway Group, the Yun Meng and Zhengzhou facilities will be fully integrated into the business’s global supply network.

DuPont estimates the annual global food ingredients market to be about US$20bn, growing at a rate of between 3% and 5% per year. The healthy food ingredients market is growing at an average of 15% per year, with total annual sales of US$2-3bn.

DuPont established its first office in China in 1984 and today has 21 wholly owned subsidiaries and jvs with a total investment of more than US$600m.

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While wanting to protect the country from being overwhelmed by Omicron, China’s adherence to a Zero-COVID policy is resulting in a significant economic downturn. COVID outbreaks in Shanghai, Beijing and many other Chinese cities will impact 2022’s economic growth as consumers and businesses experience rolling lockdowns, leading to a slowdown in domestic and international supply chains. China’s Zero-COVID policy is having a demonstrable impact on consumer-facing industries. Access GlobalData’s new whitepaper, China in 2022: the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry, to examine the current situation in Shanghai and other cities in China, to better understand the worst-affected industry sectors, foodservice in particular, and to explore potential growth opportunities as China recovers. The white paper covers:
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