Tianyi Fruit Holdings, the mainland's largest orange juice concentrate producer, expects production to rise by 25 per cent next year after it acquires a major juice processing plant in Hunan in the coming months.
Tianyi's chief financial officer Hu Wu said the deal will cost between 300 million yuan (HK$355 million) and 400 million yuan, although the parties have not yet finalised the details.
The announcement came as the prices of concentrated orange juice jumped by 25 per cent to 18,000 yuan per tonne in the past two months. Since June last year, prices have risen more than 60 per cent. Orange prices surged 50 per cent during the six months to December.
Last year's bad weather was blamed for a drop in the supply of oranges, hence the higher prices, but Hu expects a good harvest this year.
'Demand for orange juice concentrate will continue to grow on the mainland,' he said.
'Since the market at present is still largely occupied by imports, there is ample room for the development of local manufacturers.'