SHANGHAI, Aug. 25 -- ASSOCIATED British Foods Plc announced yesterday it would invest 70 million pounds (US$140 million) to set up a joint venture in China to boost sugar capacity.

One of the world's leading international food, ingredients and retail groups said the new venture, Bo Tian, will be formed in partnership with Hebei Tian Lu Sugar Group in north China's Hebei Province, according to a statement posted on its Website.

ABF will hold 51 percent in the venture, which is still waiting for government approval, and Tian Lu will hold the remainder, the British company said.

Tian Lu will contribute its existing beet sugar business to the joint venture and ABF said the investment will fund future development and expansion of the venture.

"This acquisition represents another exciting development for us in China," said George Weston, chief executive of ABF, in the statement.

"Our experience in operating cane sugar factories in southern China combined with our skills as the lowest cost beet sugar producer in Europe will enable us to introduce improvements quickly and efficiently to China's beet sugar industry."

By cooperating with Tian Lu, ABF would boost its sugar production to over 500,000 tons this financial year.

The Chinese beet sugar industry is centered in the northeast where the provinces have abundant high quality arable land with ideal weather conditions to produce high sugar content in the beet.

Tian Lu operates four beet sugar factories nationwide including Wangkui and Yi'an in Heilongjiang Province, Zhangbei in Hebei Province and Qianqi in Inner Mongolia Autonomous Region.

Its sugar output was 145,000 tons last year with sales revenue of 517 million yuan.

The country's much larger cane sugar industry is centered in southern China where ABF has four cane sugar refineries in Guangxi Zhuang Autonomous Region.