Nestle, one of the world's largest food companies, opened its first pet food processing plant in China on Friday in a bid to cash in on the nation's growing pet-related market.
Nestle said it invested an initial 80 million yuan in the Purina Petcare factory located in Tianjin Economic Technological Development Area.
Nestle chose Tianjin, a port city close to Beijing, to meet demand from the country's two largest markets - Beijing and Shanghai, said Sim Joohua, business unit head of Nestle Purina Petcare China.
It is Nestle's fifth plant in Tianjin and part of its network of 21 factories in China.
Experts predict that annual sales of pet food in China might top 6 billion yuan in 2008, while the country's "pet-related economy" could reach 15 billion yuan in the next five to seven years.
Sim declined to disclose Nestle's market share in China's pet food market but expects that "the growth rate will keep pace with growth of the pet market in China."
The Tianjin factory is expected to produce some 20,000 tons of pet food a year.
Before building its domestic plant, Nestle's cat and dog food sold in the Chinese market was imported from the United States.
The Tianjin factory increases Nestle's competitiveness with rival Mars, which set up a pet food factory in the Beijing about 10 years ago and owned international cat and dog food brands that tapped the Chinese market in the 1990s.