The Korea Herald

지나쌤

S. Korean milk powder makers turn to China on low birthrate

By KH디지털2

Published : May 13, 2015 - 12:14

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South Korean milk powder makers are revving up exports to China, data showed Wednesday, as they search for new profit sources to make up for falling sales at home due to a tumble in baby births.

South Korea's weekly milk powder consumption came in at 13,555 tons last week, nearly halving from 25,472 tons 20 years earlier, according to the data by the Korea Dairy Committee.

The drop is attributed to the country's birthrate, which reached 1.21 in 2014, one of the lowest rates among member nations of the Organization for Economic Cooperation and Development.

In turn, local dairy firms are accelerating efforts to target China, where the market for baby products is anticipated to expand on an eased one-child policy and economic growth.

Market leader Namyang Dairy Products aims to focus on 23 Chinese cities with a population of more than 1 million and per-capita gross domestic product of more than $3,000.

"The capacity of our facilities was set up in the '80s and '90s. This means we have spare capacity, which is why we are really focusing on the Chinese market," said a company official.

Buoyed by such efforts, the company's milk powder exports to the world's second-largest economy reached $20 million last year, nearly quadrupling from $5 million in 2011.

Smaller player Maeil Dairies Industry, which first tapped into the Chinese market in 2007, has also seen its exports to the country soar to $31 million last year from $6.3 million in 2011. (Yonhap)