2013 Taiwan Food Industry Report

Transcription

1 2013 Taiwan Food Industry Report ITIS Project, Food Industry Research & Development Institute May 25, Overview of the Food Industry in 2013 (1) Production Overview According to the Department of Statistics of the Ministry of Economic Affairs, Taiwan's food industry achieved an output of about billion NTD in 2013, which was a reduction of 1.41% compared to last year (Table 1). Overall food export in 2013 was 82.6 billion NTD, a reduction of 6.09% compared to last year, which was caused by a decrease of 15.99% of frozen foodstuffs exports that formed the majority of exports. The export of seasonings also decreased by a value of 1.3 billion NTD, and this has also exerted a significant impact. However, several food categories such as dairy products, cocoa products, candies and chocolates, cereals and bakery products, edible fats and oils, canned foods, milled products, tea, sugar, and other miscellaneous foods have achieved significant improvements with double-digit growth in export value during Overall food import of 2013 was valued at billion NTD, which was a slight increase of 1.35% compared to Food categories that increased the most include butchered meats, dairy products, cereals and bakery products, edible fats and oils, and non-alcoholic beverages. In 2013, simultaneous increase in both the export and import value of food products was commonly observed for dairy products (export increase of 64% and import increase of 18%) as well as cereals and bakery products (export increase of 18% and import increase of 14%). This indicated that effective improvements in the international competitiveness, attractiveness, and visibility of Taiwanese products could provide potential opportunities for market expansion for specialty foodstuffs on the global stage. (2) Raw material cost pressure has subsided for the entire year In 2013, global raw materials costs have decreased, relieving cost pressures of agricultural raw materials compared to However, bulk raw materials are still being exchanged via commodities trading. There are still operational differences between changes in global pricing and batch purchasing by local manufacturers. In -1-

2 other words, differences in operational costs and effectiveness would not only be affected by global pricing, differences in operations by various dealers and levels of the supply chain would exert a significant influence as well. Table1 Taiwan food industry production output, 2012~2014 Unit: NTD Million Subsector (f) Slaughtering 65,927 66,672 69,973 Frozen & chilled meat 25,967 25,951 27,184 Processed meat 5,663 5,846 6,168 Frozen & chilled seafood 7,059 6,754 6,930 Frozen & chilled vegetables 3,064 2,975 3,102 Processed vegetables 3,450 4,388 4,695 Edible fats & oils 28,852 25,982 26,697 Dairy products 28,259 30,175 32,096 Grain husking 35,875 32,265 31,980 Flour milling 38,647 40,069 41,651 Animal feeds 85,698 83,473 86,603 Bakery products 24,528 23,434 24,340 Noodles 14,779 13,492 13,912 Granulated sugar 8,218 7,220 7,391 Sugar confectionery 7,280 7,042 7,173 Teas 7,323 7,004 7,170 Seasonings 16,833 18,094 19,163 Prepared foods 27,652 26,546 27,519 Other miscellaneous foods 63,361 65,156 67,512 Beer 25,994 23,655 23,860 Wine & liquor 26,430 25,603 26,464 Soft drinks 51,291 51,825 53,613 Total 602, , ,195 Source: Statistic information network query system/dynamic query/industrial production by the MOEA; ITIS Program, FIRDI (2014/05) -2- Industrial & Technology Intelligence Service (ITIS)

3 (3) Continuous development and investment in new products and expansion of emerging markets. Food manufacturers have continued to actively invest in new product development projects in Taiwan, new manufacturing facilities, and the expansion of emerging markets. For example, Lianhwa Foods Corporation has invested 1.8 billion NTD to build a new production facility in early 2013 to increase the proportion of its fresh food output. Uni-President has built its 6th integrated food manufacturing facility in Hsinchu and implemented a project to establish special zones for integrated food production, logistics center, and tourism. Weichuan has also adjusted its product portfolio and strengthened its marketing channels, and established Fuding Food, a joint-investment company with Qingshan Corporation for the rearing of chickens as well as production and sales of eggs. HeySong Corporation has expanded its germ-free PET bottling line and food safety laboratory in its Chungli plant to greatly increase its soft drink production capacity in early Taiwan's first integrated vending machine capable of receiving coins as well as EasyCard and mobile phone payments has also been released towards the end of Mainland China and Southeast Asia continue to be the focus of overseas expansion by Taiwanese food manufacturers in In the Mainland Chinese market, large manufacturers such as Master Kong (Tingyi (Cayman Islands) Holding Corporation), Want Want Holdings Limited, and Uni-President have continued to invest and establish additional production facilities, equipment, and marketing channels in order to satisfy market needs. Uni-President has greatly increased the commitment to research and development capabilities in Mainland China in the 4th quarter by building an R&D center in the region. Pastry manufacturers including Kobayashi Cookie, Shan Mai Food Co., Ltd., and Vigor Kobo have also planned expansions of their physical retail outlets or activated their online sales channels. Animal farming companies such as Cha I Shan Foods have planned to construct electrical butchering facilities and feed manufacturing in Heilongjiang in an integrative venture with Chinese pig farmers to produce fresh and processed meat products to the local market and the export market in Russia. Health food manufacturers such as TCI have invested in the construction of two manufacturing facilities in Jinshan District of Shanghai City. The facilities are expected to produce functional beverages, lozenges, and powders. Peripheral product manufacturers such as -3-

4 Honchuan have continued to add new locations, while Foxconn Technology Group has plans to cooperate with the major inspection equipment manufacturer Thermo Fisher Scientific to invest in the market of food safety inspection. In Southeast Asia, Honchuan also plans to expand into Burma, Indonesia, and Malaysia in addition to its existing facilities in Thailand and Vietnam. Taiwan Fructose Company has also continued to expand production capacities in Thailand and Malaysia, and have established new maltose and fructose manufacturing facilities in the Philippines. (4) Food safety and dishonest labeling incidents have driven rapid amendments to legal regulations Major food safety and dishonest labeling issues have occurred in Taiwan in Incidents such as TOP POT Bakery's adding of artificial flavorings in its supposedly all-natural bread, mixing of imported rice in local rice in retail packages, the use of maleic anhydride in edible starch, or the illegal use of copper chlorophyll in cheap oil have all affected consumer confidence towards the entire food industry. Food hygiene and safety management requirements have led to increases in both public scrutiny as well as frequency of amending food hygiene and safety management regulations in For example, the May 17th incidence of using maleic anhydride in starch has hastened the review of the Act Governing Food Sanitation Amendment Draft. In June, the Food and Drugs Administration Agency of the Ministry of Health and Welfare has formally released the amended Act Governing Food Sanitation which introduced specific regulations for the management, inspection, validation, and control of food safety risks. The updated act stipulates that proprietors shall be personally responsible for food safety risk management, that establishment of a registration and traceability system is mandatory, and that violators of the act shall face more stringent fines and legal penalties. In October, incidents involving edible oils have once again initiated amendments for several clauses in the Act Governing Food Sanitation. These incidents show that food safety laws have been updated with increasing frequency. (5) Improved free trade relationships with New Zealand and Singapore The Taiwanese Administration has been actively expanding markets around the world. In July 2013, the Agreement between New Zealand and the Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu on Economic Cooperation (ANZTEC) was formally signed, and the agreement became effective on December 1st. Taiwan's -4- Industrial & Technology Intelligence Service (ITIS)

5 current trade in food products with New Zealand mainly involves the import of dairy products and frozen foods. ANZTEC is expected to reduce the import costs of food raw materials. On November 7th, Taiwan has signed the Agreement between Singapore and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu on Economic Partnership (ASTEP), making Singapore the first Southeast Asian country to sign an economic cooperation agreement with Taiwan. Items on the tariff reduction list of Singapore shall enjoy zero tariffs once the treaty goes into effect. Trade (whether import or export) of foodstuffs between Taiwan and Singapore makes up less than 3% of the total trade volume. However, since Singapore has already signed 20 regional and bilateral FTAs with 31 trading partners, there is a possibility for the market of Taiwanese food products to expand into Vietnam and Indonesia through the internal free trade agreement of ASEAN. With the signing of such trade agreements, Taiwan shall enjoy better opportunities in expanding her export markets through raw material import cost reductions and the establishment of free economic demonstration zones. Critical operational key factors shall be the utilization of advantageous core technologies as well as developing products that satisfy diverse taste requirements. However, reduction in import tariffs for several processed foodstuffs could potentially lead to price competition or replacement of several local food products. The industry must not ignore the means to improve the value of Taiwan's food products and price differentiation. 2. Future Development (1) Output value of the food industry is expected to grow by 3.33% in 2014 As a result of consumer concerns in food safety in the first quarter of 2014 as well as the activation of the revised Act Governing Food Safety and Sanitation effective since February 5 th, policy implementation and communication of food safety risks between consumers and the industry are still ongoing. The Food Department of ITIS predicts that food industry output will be valued at 144 billion NTD in the first quarter of 2014 (which would be a 0.47% decrease compared to the same period last year). Support from various sides is expected to improve export value to its expected annual growth rate of 3.33% with a total annual output value of 615 billion NTD in the remaining 3 quarters. -5-

6 (2) Implementation of the Act Governing Food Safety and Sanitation and major tasks of subsequent operations and communication Amendments to the Act Governing Food Sanitation proposed by the Executive Yuan have been thrice-read and approved by the provisional council of the Legislative Yuan. In addition to changing the name of the amended act to Act Governing Food Safety and Sanitation, a number of major revisions and changes have also been added such as the establishment of food safety funds, third-party validation, genetically modified food inspection and validation, and formalization the reporting of offenses by internal employees. In the future, supply source and traceability management must be established for genetically modified foods, and only food additives that have been approved by the supervisory agencies may be used. At the same time, stiffer fines and legal penalties will be meted out to violators guilty of illegal food adulteration, with penalties of the indicted reaching a maximum of 80 million NTD and a criminal sentence of 5 years. As food management regulations become increasingly stringent, food industries in 2014 must learn to comply with relevant laws and implement food safety monitoring and improve value-added throughout the entire supply chain through raw materials management and improving production environment and technologies. The industry must also focus on effective communication with the consumers. These actions will be key factors that influence the competitiveness and image of the Taiwanese food industry. (3) Focus on the development of key food products and improvements in international visibility Taiwan's market for food products have gradually matured. To achieve continuous development, it is important to strengthen international competitiveness by referencing the strategies of developed countries in Europe, North America and Japan, and focus on marketing specialty and high quality food products. Although the Taiwanese food industry has exhibited an overall growth, the entire industry has a dispersed structure. No major specialty product has yet been identified. Hence, the selection of suitable specialty products as the driving force for improving and expanding of local and international markets is necessary. When considering food by categories, seasonings, non-alcoholic beverages, bakery products, and health food have been recommended as the focus products after reviewing their growth trends in the internal and export markets. -6- Industrial & Technology Intelligence Service (ITIS)

7 Subsequent actions shall be the improvement and strengthening of the supply chain in various food categories to achieve price differentiation in terms of raw materials, technology, and marketing and achieve improved international visibility. (4) Improving safety and quality management of the entire supply chain In recent years, local and international food companies have introduced production traceability systems to improve food safety and quality management. However, issues in food safety, adulteration, and truthfulness of food labels are still commonplace, highlighting the importance of supply chain management as well as the complexity of actual implementation. There are over 6000 food manufacturers in Taiwan, most being small and medium businesses. Many breakthrough achievements are still required in order to achieve an overall integration of the supply chain. The Executive Yuan is currently proposing a Good Traceability Practice (GTP) operation system. Successful introduction of this system will help ensure the comprehensiveness of supply chain management. (5) Improving global competitiveness and opportunities for detailed business practices Taiwan has currently established bilateral trade relationships with Mainland China, Singapore and New Zealand in the local region. Global developments and trends are also heading towards a more open market. By utilizing the right trade relationships, Taiwan shall be able to improve the competitiveness of her exported foodstuffs while reducing competition from product imports. For example, with the signing of the ASTEP, detailed actuarial studies on the operational costs and benefits of using Singapore as a hub of expanding the Southeast Asian market will help Taiwan export her specialty foodstuffs to ASEAN and secure a more advantageous position. Additionally, the ANZTEC treaty with New Zealand will help Taiwan secure sources of agricultural raw material imports from New Zealand. Potential business opportunities could be made by processing these raw materials in Taiwan and then exporting the finished food product to other Asian markets. -7-