NEW YORK ( TheStreet) -- Campbell Soup ( CPB) said it has agreed to form a joint venture with Swire Pacific to support the development of its soup business in China.

The joint venture, called Campbell Swire, will begin operations in early 2011.

Campbell will have a controlling, 60% stake in the joint venture. Profit and losses will be shared in proportion to each party's ownership stake in the JV.

The company says about 355 billion servings of soup are consumed in China every year, presenting a "tremendous" business opportunity for the company.

"Swire has been an effective distribution partner for Campbell since we launched our business in China in 2007, and we look forward to the next phase of our relationship together," Campbell's CEO Douglas Conant said in a prepared statement.

The joint venture will be based in Campbell's current offices in Shanghai and will be responsible for manufacturing, packaging, branding, marketing, selling and distributing soup, broth and stock products in China.

On Jan. 7, Campbell announced that had it entered an agreement with British dry food manufacturer Symington's to launch a range of Campbell's-branded dry soups and pasta, and rice meals in the United Kingdom.

Campbell's announcements come as the company struggles with lackluster soup sales. In the first quarter, the company's U.S. soup sales fell 5%, with sales of ready-to-serve soups declining 13%. "Increased promotional spending did not produce the planned volume gains," Conant said in a press release. "This was due in part to even steeper promotions by competitors, which we chose not to match."

Shares of Campbell have inched up 0.9% to $34.86 in late morning trading. Other food companies have also been advancing. H.J. Heinz ( HNZ) has risen 0.7% to $48.67 and TreeHouse Foods ( THS) is up 0.4% to $49.71.

-- Written by Andrea Tse in New York.

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