Foodmaker Wei Chuan Foods Corp (味全食品) yesterday said it plans to build a new plant in China’s Guangzhou for its refrigerated product business, as it aims to expand its presence in southern China.
“We think the refrigerated product market in China still has great potential,” Wei Chuan chief executive Michael Su (蘇守斌) told reporters after an investors’ conference in Taipei.
Wei Chuan’s refrigerated products include refrigerated juice and lactic acid drinks.
Su said the company is still discussing the details of the project, considering southern China’s different climate and customer preference compared with other areas in China.
Wei Chuan has plants in Hangzhou City and in Hubei Province to supply products to nearby customers and has been working on a project to build a refrigerated products plant in China’s Suzhou City to meet growing demand in eastern China.
The facility, which cost between 500 million and 600 million yuan (US$75.17 million and US$90.21 million ), will start distributing refrigerated products to customers in the greater Shanghai area in the fourth quarter of next year at the earliest, Wei Chuan said.
The firm’s expansion of its footprint in China comes as it hopes to accelerate its turnaround amid mounting losses over the past few years.
Wei Chuan, known for its Linfengying (林鳳營) “High Quality Milk” brand in the Taiwanese market, is a major unit of Ting Hsin International Group (頂新集團) and has been suffering from a consumer boycott since its parent company was embroiled in a food safety scandal in 2014.
The firm — which once held a solid 40 percent share of Taiwan’s milk market — now has less than a 25 percent share in the local market, data showed.
The company is cautious about its business outlook for the domestic market and is considering improving its financial structure through some asset renewal projects, it said, declining to elaborate.
Compared with the rather conservative outlook for the Taiwan market, Wei Chuan said it is more optimistic about its operations in China, where it has a leading position in refrigerated juices with a 40.2 percent market share.
Chinese customers in the third quarter of the year generated sales of NT$2.87 billion (US$95.02 million) for the company, accounting for nearly 56 percent of its NT$5.22 billion in total sales, while Taiwanese customers contributed 42.5 percent.
From January through last month, cumulative revenue reached NT$13.17 billion, representing a 0.99 percent decline from NT$13.3 billion in the same period last year.
The company posted net profit of NT49.28 million for the first half of this year, compared with net losses of NT$442.78 million in the same period last year.
That translated into earnings of NT$0.1 per share, compared with losses of NT$0.86 per share a year earlier.
The company has not yet released its audited results for last quarter.
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