Tokyo, March 4 - Japan Tobacco Inc said on Tuesday it would continue to manufacture food in China despite taking a financial hit after 10 Japanese fell ill after eating dumplings contaminated with pesticide that the firm had imported.
Both Tokyo and Beijing have called for close cooperation to investigate the case, which has prompted heavy Japanese media coverage and set off a food scare.
Japan Tobacco Chief Executive Hiroshi Kimura told a news conference that the company's frozen food sales for February had fallen 60 percent as a result of the scare, but that it had no intention of completely pulling out of manufacturing in China due to the large amount of imports from there.
"It's easy to get ingredients, the infrastructure's there and also the labour situation is good, so in the future I believe it's an important place.
"It's hard to be a global company without China."
JT's frozen food sales were 50 billion yen ($48 million) for the business year that ended in March 2007.
Kimura said the company would intensify inspections at its Chinese plants and would concentrate more of its manufacturing there in group companies, particularly Katokichi Co.
Japan Tobacco has bought 94 percent of Katokichi and Kimura said a formal decision to make it a fully owned unit is likely soon.
The dumpling contamination has become a delicate matter for Sino-Japanese ties, sensitive at the best of times.