SNACK food and beverages distributor Four Seas Mercantile Holdings plans to focus its main expansion plans in the near future on China. Chairman Stephen Tai Tak-fung said demand for food and beverages in China was forecast to increase dramatically. 'Private enterprise retail units are flourishing in China. More outlets . . . supermarkets . . . will be established; and consumer power is higher than before,' he said. Mr Tai expected China sales would gain in importance for the company, making up 30 per cent of total sales. 'Our China market business will inevitably overtake that of Hong Kong in the future because it is so large and the growth is so great,' he added. To further develop the China market, Four Seas will set up more joint-venture companies on the mainland and widen its sales base. Last year, the Hong Kong market accounted for 73.4 per cent of sales, while China accounted for 25 per cent and Macau for 1.6 per cent. The first wholly-owned coffee shop and restaurant will be set up in the duty free shop at Zhuhai next month. The investment will be $4 million. The company has four wholly-owned coffee shops and restaurants in Hong Kong and a joint-venture shop in Shantou. Mr Tai said the Shantou shop was the best performer. A new joint-venture company linking Hong Kong and Suzhou will produce Pokka soft drinks for the domestic market. Papochou Holdings, a member of the Four Seas Mercantile Holdings group, will own 70 per cent while 30 per cent will be held by the Suzhou Light Industry Department. The total investment will be $60 million, of which Four Seas will contribute about 33 per cent. Mr Tai said the company was now engaged in discussions with its partner in China. Its six existing joint ventures are in Guangzhou, Shenzhen, Shantou and Hong Kong. The Guangzhou joint-venture had generated annual sales in the first year of $20 million, Shantou had generated $10 million and Hong Kong $40 million. Two new plants in Guangzhou and Shenzhen will go into production during this financial year. Mr Tai said the plants could add $60 million to China-generted turnover. The appreciation of the Japanese yen did not affect the price of the company's major products because it used Hong Kong dollars and US dollars as purchasing units. 'Almost 85 per cent of our products from Japan are calculated in terms of Hong Kong dollars and US dollars. 'Only some minor items have increased in price slightly,' Mr Tai said. The group's major customers on the mainland are wholesalers.