HONGKONG retail and manufacturing group A.S. Watson and Co is close to finalising negotiations to set up a joint-venture soft drinks factory in Shanghai.
The announcement fits with Watson's twin long-term objectives of penetrating the China market and escaping or overcoming Hongkong's high manufacturing costs.
Watson's group managing director Ian Wade unveiled the company's plans yesterday after signing a deal with Shanghai Yimin Number One Food Factory to establish a separate joint venture food and drinks company in the city.
The joint venture, Shanghai A.S. Watson Yimin Food Co, will have start-up capital of US$29 million and is poised to become China's largest integrated food manufacturing concern.
Mr Wade said talks with the Shanghai Light Industry Bureau were close to completion, preparing the way for a US$20 million joint-venture carbonated drinks factory to open in Shanghai in the autumn.
Watson's has a soft drinks venture in Guangzhou and is considering establishing similar operations around China.