Chalkis Company has decided to sell its 13 Tomato Processing Factories
CHALKIS company has decided to sell its 13 tomato processing factories. Only one of their processing units, Y86, was running during the 2018 crop though a renting agreement with a local trader. CHALKIS had grown significantly from 1999 when Mr. Liu Yi took over the group to become China’s second largest processor, only next to COFCO. Financial problems in recent years forced them to stop factories and reduce production.
CHALKIS bad story clearly show the difficult economic equation for Chinese tomato processor in recent years. Despite a low price of fresh tomatoes (around 65 US $ / MT.), local processors hardly manage to become profitable. Moreover, Chinese export markets have significantly dropped their buying : Russia started its own local industry to process around 450 000 MT. of fresh tomatoes; South Italy, a traditional buyer, has also reduced its purchasing, likely under the pressure of their European customers; South East Asia and Japan have turned more to Chile and California to source its tomato paste; last Africa (North and West) has also reduced its imports thanks to increased local production.
At this stage, it is quite unclear whether the Chinese industry will be able to rebound and increase again its production in coming years. This capacity will highly depend on farmers willingness to keep on growing tomatoes at current price level (400 RMB/Kg) despite poor payment conditions.