TNA China EU Innowater - Danish Water Forum

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TNA China EU Innowater - Danish Water Forum

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 ‘Gatekeepers’ Others

The key businesses who need

European water innovations. I.e.

the end-users in the food and

beverage sector.

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

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.

References

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