China promotes healthy development of soybean processing industry

BEIJING, Sept. 9 (Xinhua) China National Development and Reform Commission (NDRC) has issued a circular on directory proposals for promotion of a healthy development of soybean processing industry. brThe move is aimed at reducing pressure on domestic oil and fats production sector from foreign monopoly, and safeguarding production security of breeding culture. brThe circular says that soybean processing industry is of great importance to the national economy and people's life, and an appropriate fair competition is beneficial to formation of a sound environment of industrial development. brIt requires enterprises not abusing their market domination position or reaching monopoly agreement, which may disturb the market order. brIt encourages domestic enterprises to form big soybean processing enterprises (groups) with daily processing capacity of more than 2,000 tons, and integration of production, processing and sales, as well as strong edge of competition through merger and acquisition, restructuring, and resource integration. brForeign companies have made rapid expansion in China's oil and fats processing industry in recent two years. The new policy means tightened control over the sector. brThe policy calls for fair competition, sound market conditions and healthy development of the industry. Due to speedy expansion in capacity, the operation rate of soybean processing sector had declined year by year from 90 per cent in 2000 to 44.2 per cent in 2007. Among factories each with production capacity of over 2000 tonsyear, only 52 per cent were operational.brUnder such situation, proportion of domestic enterprises has kept on dropping in the total processing volume of the country to decline from 91 per cent of the total in 2000 to 52.0 percent, while that of foreign-funded enterprises increased at fast speed to jump to 48.0 per cent of the total. It is reported that some 80 per cent of China's domestic soybean oil and fats processing enterprises are now controlled by foreign investors.