Uni-President expands Chinese operation.
Taipei, June 20, 2012 (CENS) -- Uni-President China Holdings will invest US$237.5 million (NT$7.093 billion) to establish and expand foodstuff plants in such places as Jiangsu, Hunan, Inner Mongolia, and Ningxia in mainland China, announced Uni-President Enterprises yesterday (June 19).
As a result of the aggressive expansion, the group's production bases in China will jump to 31 by the end of next year, more than double 14 at present. Thanks to its thriving business in mainland China, the group will challenge the sales mark of NT$400 billion this year.
Uni-President announced 10 expansion and new-plant projects in mainland China, including four new general food plants in Jiangsu, Hunan, Inner Mongolia, and Ningxia, which call for total investment of US$120 million. Meanwhile, it will expand production lines in Hainan, Guiyang, Zhanjiang, Kunshan, and Xinjiang.
Uni-President pointed out that in view of the strong consumption in China's beverage market, the investments will focus on the production of beverages and instant noodle, especially in Inner Mongolia and Ningxia, which boast untapped market potential. The establishment of new plants can extend the reach of the company's sales network in China.
Uni-President Enterprises raked in NT$9.4 billion of after-tax net profit last year, down 13.6%, on sales of NT$51.8 billion, up 5.9%. The main reason was 40% decline in profits for its mainland Chinese operation. Last year, the group boasted consolidated sales of NT$388 billion, with market value exceeding NT$200 billion.
In recent two years, Uni-President has been investing aggressively in mainland China, at an annual scale of NT$10 billion. This year, for instance, it plans to spend NT$10 billion in establishing eight general foodstuff plants and one bottled-water plant.
The company racked up an extraordinary performance in mainland China in the first quarter this year, when its profits in the market nearly tripled year-on-year. In the quarter, its sales of instant noodles in China jumped 20%.
In the recent two years, the company's share in mainland China's instant-noodle market has jumped to from 9% to 15%, ranking second place. Its goal is to boost the market share to one third.