BEIJING, Nov. 11 (Xinhuanet) -- US International Paper's Shanghai company yesterday forged an alliance with giant local milk firm, the Beijing Sanyuan Foods Company Ltd.

    The two companies also put forward a new package of fresh pasteurized milk to reach the doors of consumers in Beijing.

    Prior to the alliance with Beijing Sanyuan, the International Paper earlier made an alliance with major fresh milk producers in Shanghai, Chengdu and Guangzhou.

    The move is believed to be an indication of the current competition in the market for pasteurized milk, of which International Paper is a major supplier of packaging, and ultra high temperature (UHT) milk, which normally uses Swedish Tetra Pak packaging.

    "Only pasteurized milk is really fresh milk," Su Zhijie, general manager of the International Paper (Shanghai) Company Ltd, said yesterday in Beijing at the launching ceremony of the alliance.

    UHT milk covers 70 per cent of the domestic milk market and pastuerized milk accounts for 30 per cent.

    A press release issued yesterday claimed that pasteurized milk is fresher and more nutritious than UHT milk.

    Pasteurized milk stands for over 99 per cent of the milk sold in the United States, Canada and Japan, the release said.

    "I believe the co-operation with Sanyuan will play an important role in expanding International Paper's market share in fresh milk packaging in China," Su said.

    "China is a market with huge potential for International Paper," he said .

    "We will provide packaging solutions and all-round support to Sanyuan," he said.

    International Paper accounts for half of the domestic pasteurized milk packaging market, sources said.

    Established in 1898, International Paper is the world biggest wood product and paper making company. It invested over US$29 million in 1994 to set up the Shanghai company.

    Guo Weijian, general manager of Beijing Sanyuan Foods Company Ltd, expressed the same wish that the market share of pasteurized milk could be enhanced through co-operation with International Paper.

    "Through the alliance, consumers could have a deeper understanding of pasteurized milk and the standard of Chinese milk products will be lifted to accord with international practices," he said.

    With a history of 48 years, the Beijing Sanyuan Foods Company Ltd accounts for 70 per cent of fresh milk in Beijing.

    Guo urged the placing of fresh milk symbols on milk products. "Only then could milk enterprises compete fairly," he said.

    Wang Huaibao, vice-chairman of the China Milk Industry Association yesterday agreed that pasteurized milk is more nutritious than UHT milk.

    "The development of China's milk industry is still in its initial stage," he said yesterday.

    Wang's association intended to publicize a regulation on the fresh milk symbol last year.

    But the plan finally fall through and it was reported that Tetra Pak pressed the association not to adopt the standard out of profit concerns.

    Meanwhile, another national association, the China Milk Product Industry Association appeared to disagree with the China Milk Industry Association on the issue.

    "Pasteurized milk and UHT milk both have their advantages and disadvantages. To slander each other will have a negative impact on the industry's development," Song was quoted as saying earlier in the media. Enditem

    (China Daily)