Bloomberg News

IBM to Build Food-Safety System for Pork in China’s Shandong

December 15, 2011

(Adds planned law revision in third paragraph.)

Dec. 14 (Bloomberg) -- International Business Machines Corp., the world’s largest computer-services company, won a contract to build a food-monitoring system in China as the nation toughens supervision of food safety after scandals.

The system for Shandong Commercial Group Co. will ensure the safety of pork products in the coastal province, Harriet Ip, a spokeswoman in Singapore for Armonk, New York-based IBM, said in an e-mail today. Financial terms weren’t disclosed for the project, scheduled for completion in 2013.

The government in China, the world’s largest pork consumer, said this month it will revise laws to improve food safety after one person was sentenced to death and 77 others handed jail terms over meat harmed by an illegal additive. China has reported other food safety problems this year including toxic fish, tainted bean sprouts and Sichuan peppercorns dyed with a coloring agent.

“Food supply-chain management technology and services is a big market,” IBM’s Ip said in the e-mail. “Demand for food safety products in China is expected to increase 15 percent per annum through 2013,” when the market will reach 13 billion yuan ($2 billion), she said.

IBM said its project is part of a 195 million yuan cold- supply chain that Shandong province is building in line with China’s efforts to improve food safety. The contract forms a “very small portion” of the project, which will have full monitoring and tracing capabilities, from farms to warehouses and retailers, Ip said.

System Tested

Shandong Commercial has already tested IBM’s food- monitoring system at 6 slaughter houses, 6 warehouses and about 100 hypermarkets or supermarkets across the province, Ip said.

Pork consumption in China may gain almost 10 percent from last year to 57 million metric tons in 2015, Wang Yinji, deputy general manager at COFCO Ltd., the country’s largest grain trader, said last month.

State-owned Shandong Commercial’s main business interest is in retail, according to its website. The company also has operations in the pharmacy and real estate industries and employs more than 130,000 people, it said.

--Edmond Lococo. Editors: Lena Lee, Subramaniam Sharma.

To contact Bloomberg News staff for this story: Edmond Lococo in Beijing at elococo@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net


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