South Korean ginseng producer to open Jilin plant

South Korea's largest ginseng company Korea Tomorrow & Global (KT&G) will open its first production plant in Yanji, Jilin province, in October, to cash in on China's booming healthcare market.

KT&G, the parent company of the well-known red ginseng producer, Cheong Kwan Jang (CKJ), is investing $800 million in the project.

The plant will have a designed annual production capacity of 4,000 tons, and its output will only supply the Chinese market, said Hong Seong-pyo, a manager from the company who is responsible for the plant's construction.

"China enjoys not only abundant raw materials but also huge domestic market," said Hong.

Ginseng is considered an all-round tonic in Asia and is consumed as a health product worldwide.

It has been used in traditional Chinese medicine for more than 3,000 years.

Jilin province is the area with the largest output of ginseng in Asia. Ginseng production on Changbai Mountain in Jilin accounts for 85 percent of China's output and 70 percent of the world's total output.

Around 100,000 local residents have jobs related to the industry, whose output was worth $2.1 billion last year.

Despite China's absolute advantages in ginseng production, South Korean companies now take the lion's share of the market.

According to Yonhap News Agency, CKJ plans to open more than 50 stores in China in 2012.

Data from Jilin bureau of quality and technology supervision shows that the province's annual ginseng exports are 20 times that of South Korea but its sales revenue is 5 percent of the latter.

After years of lobbying, the Ministry of Health allowed cultivated ginseng to be used in food products across China early this month, a move seen as a good opportunity for the development of the country's ginseng industry.

Zheng Yinan, a professor at Jilin Agricultural University, praised the new regulation and said that local ginseng growers and companies would benefit.

"This will help China's ginseng industry to enhance its international competitiveness," he said.

The ministry had previously limited the use of the plant to medicines. People could only use ginseng as an ingredient in chicken, porridge and soup recipes or soaked it in liquor.

Contact the writers at wuyong@chinadaily.com.cn and liumingtai@chinadaily.com.cn

(China Daily 09/15/2012 page9)