Business / Companies

Sealed Air aims at transforming China's pork market

By Xu Junqian (China Daily) Updated: 2015-09-24 07:52

Packaging expert Sealed Air Corporation enjoyed exponential growth in China in line with the country's burgeoning economy when it first entered the market in the 1980s.

The New Jersey-headquartered company had first started out helping US beef manufacturers and exporters extend the shelf life of their products with innovative packaging, and later diversified with the acquisition of Diversey Inc, the Wisconsin-based provider of cleaning and hygiene products.

But Shen Hong, vice-president of Sealed Air's Shanghai headquarters, said it entered unchartered waters when China's economic slowdown took hold over the past couple of years.

No one pushed the panic button, said Shen, but the company was forced to find a way to mitigate the effects.

All four strands of the company's business here were affected by China's falling exports, a drop in the number of new hotel openings and falling occupancy rates, and the government's crackdown on corruption-the last of which hurt exactly the kind of high-end dining venues that accounted for a fair chunk of Sealed Air China revenues.

Surprisingly, Shen's strategy to cope with the tougher business landscape, however, has revolved around one of the most sluggish farm animals-the pig.

The scale of the country's giant pig industry really came to global prominence in 2013 when Chinese meat producer Shuanghui Group bought the world's largest processor of pork, Virginia-based Smithfield Foods Inc, for $5 billion-the biggest acquisition of a US company by a Chinese buyer.

But also that year, Sealed Air launched its "China Pork" project, with the aim of revolutionizing the nation's pork supply chain.

The company suspected it had stumbled upon a "potentially huge market" when early research findings for the project revealed massive amounts of pig meat were being wasted every year during the industry's distribution process.

They showed logistics systems, involving chilled transportation, which handled much of the produce, was inefficient and the hygiene conditions of many operators needed improvement.

The research also found that Chinese housewives, who much prefer shopping at wet markets, had the perception that meat sold there was much fresher than packaged products.

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