Chinese food firms look abroad to improve image

South Korea seen as a springboard for companies to explore the international market and win consumers’confidence on safety issues, reports Lyu Chang in Seoul

For a number of years, the media has been riddled with reports of the poor quality of some Chinese food and beverages, ranging from infant milk formulas and pork contaminated by cancer-causing toxins or the use of excessive amounts of additives to water drawn from rivers containing hundreds of dead pigs.

But a collection of food companies in the world's largest exporter plans to change that perception and prove that it can match quality with quantity by qualifying for the coveted "Made in Korea" label.

Nine Chinese food companies, including Qingdao Nine-Alliance Group Co, Shanghai TDL Food & Beverage and Qingdao Foods Co, plan to move into a food industrial complex in South Korea to have better access to the food markets both in China and abroad.

Located in Iksan, about 44 kilometers south of Seoul, the complex, known as Foodpolis, will provide food-related research and development facilities and laboratories with services throughout the process of food production from content detection to packaging as well as creating residential areas for workers for more than 160 international food enterprises.

Officials at Foodpolis said they will provide administrative and legal support as well as preferential policies, including conditional 50 years of lease exemptions to Chinese companies to help them relocate to the zone.

Details on their investments have yet to be worked out, said an official in charge of overseas investment at the State-owned agency for Foodpolis, but these companies have all signed memorandums of understanding with South Korea's Ministry of Agriculture, Food and Rural Affairs.

The deals could allow the Chinese companies to label their goods as "made in Korea", a move that the official said is crucial to regaining public confidence in China following a series of food scandals.

Earlier reports said that one in 10 meals was cooked in China using oil dredged from sewers. In 2008, a contaminated milk scandal left six infants dead and an estimated 300,000 sickened.

Experts said the popularity of imported food in China is the driving force behind the move, which has been fueled in recent years by fears of domestic food contamination.

"There's a perception in China that imported foods are of better quality and of a higher standard than domestic food," said Chen Lianfang, a senior analyst in the dairy sector at Beijing Orient Agribusiness Consultants Ltd. "So 'Made in Korea' products have become more and more popular in China and show the concerns over food safety."

Shanghai TDL Food & Beverage Co Ltd, which specializes in vitamin beverages, juices and dairy foods, boasts an annual revenue of $150 million. It signed an agreement last year with Foodpolis, planning to set up a facility there in order to cooperate with a Korean ginseng company.

"We want to develop and produce a ginseng-based beverage. The collaboration will eventually broaden our portfolio and strengthen our position in the Chinese market," the Shanghai-based company, a producer for Japanese brewing and distilling group Suntory, said in a statement.

As South Korean romantic soap operas appeal to more Chinese women, there is also a growing appetite among the Chinese for Korean foods.