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IGA BOOSTS PRESENCE IN CHINA

CHICAGO -- IGA here said it is scheduled to add three major Chinese retailers with 363 supermarkets to its membership next week, a move that will boost the total volume of IGA's members by approximately $1.2 billion.The formal signing ceremony is scheduled to take place during IGA's Summit in Rancho Mirage, Calif., next week.IGA currently licenses 58 stores in China operated by two companies, with

CHICAGO -- IGA here said it is scheduled to add three major Chinese retailers with 363 supermarkets to its membership next week, a move that will boost the total volume of IGA's members by approximately $1.2 billion.

The formal signing ceremony is scheduled to take place during IGA's Summit in Rancho Mirage, Calif., next week.

IGA currently licenses 58 stores in China operated by two companies, with combined volume of $450 million.

According to Tom Haggai, IGA chairman and chief executive officer, the addition of the three chains in China will make IGA the second-largest foreign supermarket operator in China, topped only by Paris-based Carrefour, whose estimated China sales are $1.8 billion.

With the rapid unit growth of the three companies, Haggai said IGA's volume could pass Carrefour before the end of the year.

The three companies are:

Wuhan Zhongbai, with 300 stores and annual volume of about $602 million;

Qingdao Liquin Group, with 14 supermarkets and 11 department stores and volume of about $400 million;

BuBuGao, with 49 stores and annual volume of approximately $245 million.

Haggai said the chains asked to become IGA banner licensees. They will receive assistance with category management practices and other merchandising initiatives, he said.

Until late last year, foreign companies could enter the country only in partnerships with Chinese businesses. However, with China's acceptance into the World Trade Organization, those restrictions were lifted.

IGA worked with the China Chain Store and Franchise Association, which asked IGA to help Chinese companies become more competitive, Haggai said.