PEPSI, MCCORMICK JOIN IN CHINA FOODS VENTURE

PEPSI, MCCORMICK JOIN IN CHINA FOODS VENTURE

Two American giants are joining forces with a Shanghai company to form a US$3 million spice venture in China with an eye to exports.

Pepsico Inc. of Purchase, N.Y., and McCormick & Co. of Hunt Valley, Md., will jointly hold 60 percent of the enterprise. The remainder will be held by Shanghai Foodstuffs & Sundries Co.The aim is to bring new technology and investment to China while creating export markets, said Lai Kim Yin, Pepsi's China chief, at ground-breaking ceremonies for the plant in Shanghai.

The joint venture, called Shanghai McCormick Seasoning & Foodstuffs Co., will produce a projected 3,500 tons of spices and seasonings a year. Products will include a broad range of herbs, sauces, jams and other items for sale abroad.

Pepsico is already heavily involved in China with bottling and other soft drink plants. In addition, its Kentucky Fried Chicken subsidiary opened China's first Western fast-food restaurant last October in Beijing.

Pepsico also buys millions of dollars' worth of products from China, including mushrooms for its Pizza Hut chain. As part of a countertrade deal, it took toys from southern Guangdong province for use as promotions in Taco Bell restaurants.

During the cold winter in Beijing, receipts from the Kentucky Fried Chicken outlet were said by Chinese officials to be running at US$10,000 a day. That is an astronomical figure in a country where the 5 yuan (US$1.38) cost of a meal of chicken, potatoes and cole slaw tops what many Chinese earn in a day.

Coca-Cola Co., Pepsi's Atlanta-based arch rival, operates seven bottling plants in China and has plans for a Shanghai joint venture producing drink

concentrates.