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Consumer goods producer Unilever opened a global production center yesterday in the capital city of East China's Anhui Province.
With an investment of approximately US$50 million, the Unilever Hefei Industrial Park will integrate the company's industrial operations, originally in both Shanghai and Hefei, into one site.
The park is in the Hefei Economic Development Zone and covers about 25 hectares of land.
"The opening of this industrial park reflects our long-term commitment to the Chinese market," said Patrick Cescau, Unilever's group chief executive, at the park's opening ceremony yesterday.
"We will build the industrial park into one of our top production bases in the world, in terms of production scale, efficiency and equipment," he said.
The first two phases of the project were completed earlier this year and have started operation. They produce personal care products and detergents.
The company has also started to build the third phase of the project, a packaging plant for Lipton tea products.
Mass production of Lipton teas in the industrial park is expected to kick off next September.
After the completion of the Lipton plant, the number of Unilever's production plants in China will be reduced from seven to three, in order to achieve a larger scale effect.
The new park, together with the other two production sites one in Beijing and the other in Guangzhou will supply Unilever's products to Chinese consumers as well as for exporting, company sources say.
Now, about 10 to 15 percent of the production in Heifei is for export.
"With a global production base here and an operation center in Shanghai, China has become an integral link of Unilever's global supply chain," said Cescau, who was on his first visit to China.
Currently, production in China is only one to two percent of the firm's total production. But it plans to make more here because of the lower costs and the fact that China is a market that just cannot be ignored.
In the past two years, Unilever has enjoyed two-digit growth here.
"China is increasingly becoming a vital component in our global strategy," said Cescau. He added that the firm intends to fully capture market share in China and believes Unilever will do well in the country.
According to him, some of its products have seen a 70 percent growth so far this year.
But, he added, the company must approach the market step by step, as he thought China was "one country but many markets."
Like any other manufacturer of consumer goods, Unilever has spent a lot of money on advertisements in China; this year, it has already spent 20 percent more on them than last year.
(China Daily November 10, 2005)
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