Technology Needs Analysis Country/Region: China Sector: Food and beverage industry
Market Overview Introduction China is one of the largest consumers of food and beverage in the world, and it is also one of the largest producers. Chinas major cities of Beijing and Shanghai are the leading consuming hubs. The food and beverage sector in China includes agricultural products process, food stuff manufacturing, and beverage manufacturing. The market has been increasing during the last decades driven by urbanization, disposable incomes, changing urban lifestyles and retail distribution. Particular high growth has been seen in the process industry (dairy and dry food), wine, fish and seafood and meat. The food and beverage sector is an important market for water technology companies with a global growth estimate of 6.7 % and two digits growth in emerging markets like China. Water scarcity and environmental protection are driving this market. Increasing costs for water, energy and materials also drives the market towards energy recovery, water reuse and material recovery. The main market opportunities for European SME´s in food and beverage subsectors are where large State Owned Enterprises and multinationals have not yet invested and where they can leverage their know-how and technologies. Energy efficiency services, water and waste treatment sub-sectors present particular opportunities for European SME´s. The water and water management situation in China and in Beijing China´s water resources are scarce and unevenly distributed. China´s per capita availability is only 2,156m3 /year (2007) only one fourth of the world average. While China as a whole is facing serious water stress, its problems are made more severe by the fact that its water resources are unevenly distributed, both spatially and temporally. In Hai basin- the basin from which Beijing draws some of its water, river flows fall to 70% of their averages one year in four and to 50% one year in twenty. In Beijing, the per capital availability is only 300 m3/year, making this megacity extremely water scarce. China´s water scarcity is aggravated by extensive pollution. Over the past three decades, water pollution has increased, both in surface water and groundwater. A major contributing factor is that only about 50% of municipal waste water is treated, versus 92% of the industrial waste water. As a result of continuing pollution, the water quality of most of China´s water bodies has been extensively degraded. The central and local governments in China, have increased the water tariffs since early 1990´s- with the tariff getting close to full cost recovery in particular in the large cities like Beijing. The permitting system is gradually being upgraded and enforcement strengthened.
The food and beverage sector and its water use The food and beverage sector in China generates a high value about CNY 1000 billion- equal to value of the chemicals sector or the power generation sector (National Bureau of Statistics, 2008). The whole industrial sector account for 20% of the water use in Beijing (2005), and 6% of this is used by the food and beverage industry. In industry the water recycling level (withdrawal compared to the amount delivered back to the water resource) is
only 40% in average compared to 75-85% in developed countries. Market dynamics, opportunities for EU businesses from the water sector The “Most Stringent Water Management System” announced by the State Council early 2013 sets out water usage, efficiency ratios for water usage for industry and agriculture and water quality measures for each province. The central government has set the food and beverage industry the target to reduce its water consumption by 30% for each Chinese Yen of industrial value of the production and 10% of the pollutions discharged. According to market forecasts (GWI) the food and beverage sector is expected to double its capital expenditures from 2007 to 2016, and the market for equipment and services are expected to increase almost at similar rates. State of technology; adoption of water technology Production technology and use of resources (energy, water, materials and waste production) varies between food and beverage sub-sectors. While there is not a study on the present state of technology it is expected that European SME´s and innovators which deliver technologies, services and equipment for water reuse, process optimization and waste water treatment will have attractive services and technologies to deliver.
Stakeholders Who are the key stakeholders that the INNOWATER consortium needs to engage with – broken down into the 3 categories below.
Businesses The key businesses who need European water innovations. I.e. the end-users in the food and beverage sector.
‘Gatekeepers’ Ministry of Water Resources with its office of Water Resources Management being responsible for water resources protection, distribution and diversion. Directly below this state level ar the water resources commissions of the 7 basins. Ministry of Environmental protection, responsible for emission control and EIA´s, environmental monitoring, science and standards, pollution prevention and control National Development and Reform Commission, is responsible for industrial structure adjustments, regional economic coordination, investment and finance management and state enterprise reform. Beijing city and Heibei province administrations on industrial water and waste water.
Chinese Food and Beverage Sector organization
Others EU SME Centre Beijing, can provide good advice on market entry
EU China Chamber of Commerce
Main ‘Sponsors’ (to promote technologies and innovation) Clean Tech Clusters in EU Countries Innovation support system in EU Countries Export promotion and support systems in EU Countries China Europe Water Platform EU China Policy Dialogue Support Framework
Specific Challenges [t.b.d. during trip] These specific challenges and potentials will be explored in detail by the consortium when they visit China and will be used to help build value propositions by European SMEs once the trip has taken place. This first-hand information will be extremely useful in terms of the follow-up activities with SMEs once back in Europe.
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