THE Swire Pacific Group and Iacobucci of Italy have agreed on an $80 million joint venture to manufacture aircraft catering equipment in a factory at Xiamen airport. Xiamen has been promoting itself as a future centre for making aircraft equipment. Iacobucci is one of the world's largest makers of aircraft catering equipment, with a global market share of more than 25 per cent. It will take a 65 per cent stake in the joint venture and the rest will be held by the Swire Group. Iacobucci Asia vice-president Carlo Alvise Ansoldi said: 'We see this joint venture as a basis for our expansion plans in Asia as a whole. 'We believe the Chinese operation will be able to reproduce the high standards achieved in our Italian factory and enable us to focus on China as an export base.' The factory would allow his firm to shift 70 per cent of its Italian manufacturing operation to China. The company planned to start marketing its products to Chinese airlines, which were seen as a huge potential market given China's expansion plans for its aviation industry. The Swire group's 35 per cent stake will be split between its subsidiary, Hong Kong Aircraft Engineering Co (Haeco) and Taikoo Xiamen Aircraft Engineering Co (Taeco). Taeco is a joint venture formed by Haeco, Cathay Pacific, Japan Airlines, Singapore Airlines and various Chinese organisations, including the Xiamen provincial government. Mr Ansoldi said Xiamen was chosen for the factory because it allowed close contact between Iacobucci's partners. Haeco was building an aircraft maintenance plant there. Xiamen's port provided easy export for its products. The factory would serve mainly foreign customers, such as Cathay Pacific, Dragonair and Garuda Indonesia. The 12,000 square metre plant, to be built in two phases on a 50,000 square metre site, would make aircraft carts, trolleys and containers. Work on the first phase would start early next year and was to be completed by the year end. The first phase would have an annual production capacity of 12,000 carts and trolleys and 10,000 containers. Mr Ansoldi said this was based on operating a single shift a day, and capacity would increase if shifts were added. The new company would employ 100 staff, and 15 team leaders hired in China were to be flown to Italy for training. Cathay Pacific said yesterday it was still waiting for approval from the Civil Aviation Administration of China for its 1.2 billion yuan (about HK$1.12 billion) joint venture to expand the 11-year-old Xiamen airport. Spokesman Kwan Chuk-fai said he would not speculate on the reasons for the delay but stressed that the plan had not been shelved.