S'pore takes minority stake in Jilin food zone

PHOTO: S'pore takes minority stake in Jilin food zone

CHANGCHUN, CHINA - The previously stalled Sino-Singapore Jilin Food Zone has moved a step forward after both sides signed a deal to set up a joint management firm, in which Singapore will hold a minority stake.

This marks the first time that the Chinese will take a majority stake from the start in a bilateral project as both sides usually have an equal share.

The Chinese will have a 60 per cent stake in the Sino-Singapore Jilin Food Zone Development and Management Company, with Singbridge, a unit of Temasek Holdings, taking 40 per cent. It will have registered capital of 100 million yuan (S$21 million).

"We have no objection to them taking the majority stake but they are very clear that they want to make sure that their set-up meets the Singapore standard," said Ms Chong Phit Lian, chief executive of Singbridge Corporate, who on Monday inked the deal to set up the joint company with the Jilin city government.

State-led projects, namely the Suzhou Industrial Park and the Tianjin Eco-City, both started with an equal stake for Singapore and China. But the Chinese took on a bigger share - 65 per cent - of the Suzhou park later.

Projects led by governmentlinked firms, namely the Sino- Singapore Guangzhou Knowledge City and the Singapore-Sichuan Hi-Tech Innovation Park, are helmed by companies owned equally by the Singapore and Chinese sides.

In the case of the food zone, Singapore's smaller stake has to do with how "a lot of change in mindsets and systems" is needed in food safety in China, said Ms Chong. "So we feel that the commitment from the (Jilin) government is very important."

But the company will have a Singaporean chief executive, she told Singapore reporters after the signing in Changchun, the capital of Jilin province.

"Yes, they are (the) majority but a lot of key positions will be filled by Singaporeans or Singapore nominees," she said.

Slated to be 1,450 sq km, an area twice the size of Singapore, the food zone was first mooted when Prime Minister Lee Hsien Loong met then Chinese Premier Wen Jiabao in 2008.

The project, meant to feature pig and rice farms and food-processing factories, was put on hold after Temasek reportedly doubted its commercial viability. It got going again last September when Mr Lee signed a pact on the food zone with Mr Wen in Beijing.

Asked if Singbridge was concerned about being unable to ensure food safety given its smaller stake, Ms Chong said the Chinese had shown "very strong commitment".

For instance, they had the food zone certified free of foot and mouth disease by its Ministry of Agriculture, endorsed by the Agri-Food and Veterinary Authority of Singapore last year.

The Jilin provincial government has also approved the setting up of a single agency to oversee food and drug safety in the food zone, needed for an integrated food safety system.

"Being a one-stop service centre, it will be far more effective than having the responsibility rest with 10 to 12 different agencies," Dr Lee Boon Yang, senior adviser to Temasek Holdings, said when he led a Singapore delegation to meet Jilin provincial party secretary Wang Rulin before the signing.

The food zone has attracted more than 10 investors, including Keppel Telecommunications & Transportation, which is building a logistics park.

hoaili@sph.com.sg


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