Tetra Pak, the European liquid food processing and packaging heavyweight, is planning to further invest in China to tap into the fast-growing dairy market, a top company executive said.

"We already have significant investments in China and we will continue to make more in the next decade," said Michael Grosse, Tetra Pak's executive vice-president.

The Swedish firm has so far invested about US$200 million in China since it entered the nation in 1972.

The country became Tetra Pak's biggest market in 2002.

"We have witnessed explosive market growth in China in the past few years and we believe such a trend will continue over the next five years," Grosse said.

The company sold 18 billion packages in China last year, up from 7.5 billion packages in 2002.

"Several factors underpin our conviction in the perspective of the Chinese market," said Grosse, pointing to China's fast-growing economy, sweeping urbanization and the growing demand for packaged food.

China's dairy product market has grown by an annual 33 per cent from 1999 to 2003, becoming one of the world's fastest growing regions, according to industry figures.

Insiders predict that dairy product sales in China are expected to grow by at least 15 per cent annually over the next five years.

Some experts say liquid milk consumption is likely to increase by 30 per cent year-on-year in the next few years, which Tetra Pak says will create huge demand for its liquid packaging solutions.

"We need additional investment to accommodate such robust demand," said the executive president, declining to elaborate on specific figures.

"We also need to deliver innovative technology to ensure our customers are well-equipped to meet increasingly intensive competition in China," added Grosse.

"Today China is both our largest market and the fastest growing one in the world," said Grosse, who once worked for German carmaker BMW. The company declined to provide specific figures about its China operations, only saying the business is profitable and expanding quickly.

Industry experts estimated that China now accounts for about 10 per cent of Tetra Pak's total worldwide sales, which stood at US$10.03 billion last year.

"Even though, our (market) share in the liquefied milk packaging market is still very low," Grosse said, "we need to bring more solutions and products to this segment."

The firm is also considering opening research and development facilities in China.

"Everything is possible," said Grosse, who is responsible for Tetra Pak's development & engineering.

"We can learn a lot from our customers and find and meet their specific needs," Grosse said. "But we will move step by step (in setting up R&D facilities in China)."

In 2004, the company spent US$80 million setting up a liquid food packaging plant in Beijing, increasing the firm's annual production capacity by some 6 billion packages.

It was Tetra Pak's single largest investment project in China.

Currently, the firm has four processing facilities in the country, in Beijing, Shanghai, Kunshan in East China's Jiangsu Province and Foshan in South China's Guangdong Province.

Tetra Pak claims it is the only company in the world able to provide integrated processing, packaging, and distribution line and plant solutions for liquid food manufacturers.

In addition to packaging materials, the firm also provides liquid food processing and packaging lines, as well as technical services and market support.

Editor: Yan