Ejiao maker intent on leaping hair and hide into health food

BEIJING - Shandong Dong E E Jiao Co Ltd, the largest Chinese ejiao maker by market share, wants to boost its health food business in order to grab a big slice of the promising industry, the company said on Monday in Beijing.

"We plan to increase the proportion of health food in our product line from 20 to 30 percent in the next five years, compared with the present 10 percent," said Qin Yufeng, general manager of the Dong E E Jiao.

Dong E E Jiao is in Liaocheng, of East China's Shandong province. The area is renowned for its production of ejiao, a donkey-hide gelatine used in traditional Chinese medicine that can improve blood supply.

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The company has introduced several snacks to go with ejiao, including one mixed with walnuts and sesame seeds, and another with an edible coating for dates.

"We want to increase our health food business because people in China are increasingly paying attention to health and how to stay healthy," said Qin.

According to the CI Consulting, a business research firm, health food has been one of the world's fastest-growing industries since the 1990s, with annual sales growth of 13 percent. After years of fast development, the Chinese health food market became the world's second-largest in 2009, valued at $13.4 billion.

Data from the General Administration of Customs showed that in 2009, China's total health food exports reached $89.1 million, a 2.2 percent increase over the previous year; imports amounted to $110 million, a 3.9 percent year-on-year increase.

In 2010, China exported $161 million in health food, a jump of 32.27 percent compared with 2009, and it imported $203 million of health food that year, a 30.33 percent increase over 2009, according to the Customs data.

"The Chinese health food industry has rapidly developed over the past decades, mainly because of the significant improvement of people's standard of living, changing lifestyles and multilevel social needs," China International Capital Corporation Ltd (CICC) said in a research report. "So, Dong E E Jiao has huge room for development, as the industry will benefit more from heightened domestic consumption and the booming health care market."

In April, the Shenzhen-listed Dong E E Jiao reported first-quarter revenue of more than 704 million yuan ($109 milllion), a year-on-year increase of 10.72 percent, and net profit of 269 million yuan, a 61 percent year-on-year increase.

Dong E E Jiao stock closed at 37.22 yuan a share in the Shenzhen Stock Exchange on Monday, a 0.62 percent increase.