Pillar in US salt sector inks joint venture in China

Morton collaborating with State firm to expand product offerings

Morton Salt, the largest salt producer in the United States, announced on Wednesday it is expanding its product offerings and capabilities in China through a reinforced collaboration with China National Salt.

The collaboration includes trademark and technology licensing agreements. It was signed by top executives from both Morton and China National Salt (Shanghai) Co.

As part of the deal, the joint venture will import, market and sell a broad array of packaged Morton culinary salts, water softening salts and Epsom salts across China.

In addition to these finished goods, the JV is building a new packaging facility in Shanghai to increase its production and distribution of select salt products in the country. The new operation is expected to be completed in March 2015.

China is currently the largest salt-consuming country due to its expanding chemical industry and the dietary needs of its nearly 1.4 billion people. Chinese consumption accounts for one-quarter of the global total.

The country is projected to be the largest salt importer in the world, according to British-based Roskill Information.

Morton products account for more than 50 percent of the salt market in the US. Its products have been imported to China on a small scale over the past decade. The expanded scope will provide Chinese consumers with a larger product selection.

"Our expansion in China through this joint venture is an exciting step toward achieving our vision, which is to establish Morton Salt as the premium salt brand in China," said Morton CEO Christian Herrmann.

Morton's products account for nearly 60 percent of the imported salt market in China, and its sales are growing by 30 percent every year, according to a document provided by the company.

"Sales of Morton Salt in China have risen steadily in recent years, signaling a strong demand for our products," said Herrmann.

As a State-owned enterprise approved for selling salt products under the government's salt monopoly policy, China National Salt (Shanghai) is responsible for the management of Shanghai's table salt market.

"This is a milestone for the global salt industry ... we're delighted to work with Morton to bring one of the leading consumer brands in US to even more people in China," said Wang Xueshi, general manager of China National Salt (Shanghai).

The expanded cooperation came when the Shanghai government called for faster pace of SOE reform in the city. The move also marks a solid step in the reform of salt monopolies.

In the China (Shanghai) Pilot Free Trade Zone, foreign investors are already allowed to sell salt at the wholesale level. The official China salt association has said it is studying an overall reform plan for the industry.

Southwest Securities said the reform will open the door to a 100 billion yuan ($16.2 billion) table salt market in the country.