Wei Chuan Foods Corp (味全食品) yesterday said it is to invest nearly 600 million yuan (US$88.5 million) building a new plant in China’s Suzhou, as part of efforts to accelerate the firm’s turnaround.
The facility — which is to distribute refrigerated products to customers in the greater Shanghai area — is expected to begin production in the fourth quarter of next year, a company official said by telephone yesterday.
The official, who requested anonymity, said revenue generated by the firm’s plant in China’s Hangzhou has surpassed sales at its Taiwanese plants since last year.
Last year, sales at the Chinese operations made up 53 percent of the company’s total sales of NT$17.1 billion (US$562 million), while sales in Taiwan contributed 45 percent, company data showed.
Overall sales in China reached nearly NT$9 billion last year, a 15.6 percent increase from the previous year, Wei Chuan said.
That figure is forecast to reach NT$10 billion this year in light of growing demand for refrigerated dairy products.
The 64-year-old company’s business strategy to raise revenue contribution from the Chinese market came as it has been the target of a nationwide boycott of its products in Taiwan for the past three years.
Wei Chuan, a major unit of Ting Hsin International Group (頂新集團), has suffered from a widespread boycott after its parent company was embroiled in a food safety scandal in 2014 involving the sale of tainted cooking oil at its subsidiaries.
“We will not withdraw from the domestic market,” Wei Chuan chief executive officer Michael Su (蘇守斌) said at the firm’s annual shareholders’ meeting in Taipei on Tuesday.
Over the past three years, the company has continued to invest in improving its food safety standards to win back the public’s trust, Wei Chuan said.
The firm reported a net profit of NT$46.72 million in the first quarter, or earnings per share of NT$0.09, ending 10 consecutive quarters of net losses, while first-quarter sales increased 2.2 percent year-on-year to NT$3.6 billion on improving demand.
However, the company still posted an operating loss of NT$126 million in the first quarter, improving from a loss of NT$533 million in the same period last year.
Shareholders on Tuesday approved a proposal not to distribute a cash dividend this year after the firm posted a net loss of NT$776 million for the whole of last year.
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