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Made-in-China noodles may flag Taiwan price war

Tingyi (Cayman Islands) Holdings Corp (鼎益控股), China's biggest noodlemaker, plans to sell instant noodles in Taiwan, signaling a possible price war with Taiwan's biggest foodmaker, Uni-President Enterprises Co (統一企業).

Tingyi, started in 1992 by the Taiwanese Wei brothers, expects to grab a tenth of the nation's noodle market, Chief Financial Officer Frank Lin said without specifying a time frame.

Based in Tianjin, in northern China, Tingyi will enter Taiwan with the "Master Kang" (康師傅) brand that's helped it win two-fifths of China's US$1.8 billion noodle market.

Its announcement may herald more such challenges for Taiwan's food, textile, steel, chemical and other industries as eased cross-strait trade rules -- expected after China and Taiwan's imminent entry into the WTO -- allow companies to market lower-cost China-made products in Taiwan.

"There will be price pressure with more brands and more choices," said Simon Lu, who helps manage NT$1 billion (US$29 million) in equities at Truswell Securities Investment Trust Ltd in Taiwan.

Tingyi shares rose 10.5 percent to HK$1.26 in morning trade in Hong Kong. Shares of Uni-President Enterprises were trading at NT$11.70, up 2 percent.

Singapore-listed Want Want Holdings Ltd (旺旺), a Taiwanese company that gets 90 percent of its sales from China, recently announced similar plans, saying it will sell its China-made snacks in Taiwan.

Sister Company Tingyi is betting that the retail network of its sister company, Wei Chuan Food Corp (味全食品), the sixth-biggest Taiwan food company by market value, will give it a head start in Taiwan. Wei Chuan, controlled by the same Taiwanese interests as Tingyi, makes baby formula, soy sauce and canned food.
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