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Taisun Enterprise Chairman Kenneth Chan

Food Sector Must Solve Its Own Problems


Food Sector Must Solve Its Own Problems


Amid a spate of food scandals that has people fuming at the government for lax oversight, one food industry kingpin says in an interview with CommonWealth Magazine that it's up to the industry itself to clean up its act.



Food Sector Must Solve Its Own Problems

By Ming-ling Hsieh, Kuo-Chen Lu
From CommonWealth Magazine (vol. 559 )

As one food scandal after the other erupts in Taiwan, shocked consumers call for harsher punishments and stricter law enforcement to bring unscrupulous food makers in line. Yet Kenneth Chan, chairman of food and beverage maker Taisun Enterprise Co. Ltd. and the Taiwan Food Industry Development Association (TFDA), believes that corporate self-control is the key to safer food.

On the eve of his interview with CommonWealth Magazine, Chan visited the Taipei-based Chinese National Federation of Industries, hoping to convince its 22 member associations from food-related sectors of the need for socially responsible corporate practices.

Within the TFDA, Chan has taken the lead in pushing for greater food safety, including joining hands with U.S. software solution provider Oracle to improve source management. Toward that aim, specifications and standards for some 900 food source materials were set up, international food laws and regulations collated and an early warning system established for international food scares. 

Taisun Enterprise's factory in Tienchung, Changhua County, has just obtained certification by the U.S.-based SQF (Safe Quality Food) Institute, becoming the first SQF-certified Taiwanese food maker. In order to gain SQF certification, which is supported by multinational buyers such as hypermarket chain Wal-Mart Stores and fast food giant McDonald's, companies must meet specific requirements for safe food processing, safe products, and management of food safety risks. Chan believes that Taiwan's scandal-tainted food industry can only rely on itself to restore its reputation and regain consumers' trust. 

The following are excerpts of comments made by Chan during his interview with CommonWealth Magazine.

Industry, government and academia are the three forces that can influence a nation's development. 

Now we are ranting at the "officials," but it is not the government that can truly solve this problem; it is definitely the private sector. I-mei Foods Co. President Luis Ko gave me an example. He said, just like in Taiwan, Japanese soy sauce used to be brewed old style in wooden barrels.

Later on, scientists found out that wooden barrels cannot be sterilized well enough, so soy sauce makers switched to cement tanks after World War II. However, cement tanks would get cracks, so they switched again, this time to steel, thinking it would solve the problem for good. But they found that the acidic and alkaline substances in the soy sauce production process corroded the steel, forcing them to look into different grades of steel to withstand the abuse.

As in this case, who is supposed to take the lead in such developments? Should we depend on legislation being drawn up? Or should we rely on the Ministry of Health and Welfare to regulate them?

I think the private sector should stand up to the task. Just like in the soy sauce example, progress and development need to begin with the companies themselves.

Taiwan's Food Industry "Comfortable Much too Long."

The entire system must be adjusted. The time has come for industrial upgrading. However, industrial upgrading is not a job a single company can get done on its own; it's a job that all companies have to do together.

Taiwan's food industry still remains stuck in the 1990s and the 2000s. We are domestic consumption-oriented and are not under pressure to compete with companies from outside Taiwan; we have been comfortable much too long. Many national standards and regulations are very much out of date. Why did the Chuan Tung [brand] oil [tainted oil made from recycled cooking oil by Chang Guann Co.] still meet regulations? It's because the regulations are out of date.

When the regulations are old or hardly enforced and neglected for a long time, then manufacturers can easily meet the standards, leaving plenty of room for fraud.

Only industrial upgrading will lead to an upgrading of standards. We urge the 22 food-related industry associations to take the lead in instigating change. The industry associations know best what needs to be controlled and where the high-risk areas are.

Product attributes within the associations are very similar. Therefore, they are the most appropriate entities to take the initiative in setting industry standards that are in line with international practices. The 22 associations need to customize their own GMP [good manufacturing practices] and set their own standards at a more ambitious level to establish a mechanism for separating the wheat from the chaff.

Presently many associations are poorly run and have no connection with local associations. When problems occur, they are unable to rise to the occasion. Yet, they're the ones who should take the lead in industrial upgrading and serve as a bridge between government and the public, and they should provide the government with suggestions in a white paper.

I will use the PDCA cycle [plan, do, check, act] to explain this.

Planning and doing are definitely industry responsibilities. Scholars do the analysis [check], while the government is the final actor.[Taiwan's food industry] must establish such a cycle.

At this point in time, however, there is no cooperation, only confrontation.

Industrial Alliance for 'Upward Management'

Now everyone is talking about source management, but what is source management?

We can learn from the example of multinational food company Nestle. At one point, a Nestle product manufactured at a factory in Southeast Asia failed to meet European Union regulations. So it hired a consulting firm to establish an ERP [enterprise resource planning] system called PLM [Product Lifecycle Management].

Under the system, laws and regulations from around the world were gathered, and when Nestle designs a product in the future, all purchased raw materials must be checked [for compliance] one by one.

Because of this requirement, quality control and purchasing personnel will have to fill out product specification forms for purchases from upstream suppliers.

Product specifications are quality control values. If we let our industry peers know these specifications and make everyone cooperate and insist on following them, then our upstream raw materials suppliers will naturally become cleaner.

For instance, when I buy B-grade granulated sugar, what do I need to test for? How do I test? This is a kind of skill, a kind of know-how. That's where everyone should cooperate. The leading companies should take the initiative, industry association leaders should take the initiative and educate everyone. If the retail industry works in concert with the industry associations, retailers can also take the initiative, because this would force upstream manufacturers to act.

What we are talking about now is nothing but the rules of the game. You should not rely on the government to make the rules of the game – you should rely on the industry for that.

What we are talking about is self-discipline. Self-discipline means conscience. The time has now come for our industry to decide whether it wants to get this done.

Translated from the Chinese by Susanne Ganz