Chairman's job at Taisugar may not be so sweet

Poised for an overhaul after the government named a new chairman on Monday, Taiwan Sugar Corp (Taisugar, 台糖) should focus on its core industries such as hog-farming, biotech research and development and horticulture, pundits said yesterday.

"Taisugar should start streamlining its organization, returning government-owned land to the state for further management and focusing its management on some of its core industries," said Lai Shyh-bao (賴士葆), a professor of business administration at National Chengchi University.

State-run Taisugar owns 55,000 hectares of land in Taiwan.

Taisugar's newly appointed chairman, Wu Nai-jen (吳乃仁), said on Monday in the legislature that the company plans to lay off 1,200 workers by the end of June, keeping 5,700 staff on hand as part of its consolidation plans.

Wu also laid down a money-making precondition as a guideline for the company's future development, saying that remaining profitable would be his main concern.

"I am not opposed to investment diversification as long as it makes money," Wu told legislators, adding that the company has built a solid reputation in its orchid business and biotechnology development.

But management talent is lacking at the company, he said.

A CEO at a division of Taisugar who requested anonymity, said that Taisugar's business diversification was a result of the company's transformation since sugar-making is no longer profitable in Taiwan.

"Land, capital, image and products are what Taisugar's management need to build on," the CEO said, adding that the company's diversification was also in preparation for eventual privatization.

The Taisugar conglomerate may be overhauled since some of its investments may face staunch post-WTO competition, he said

"The new management may think about consolidating some investment segments while allowing other business segments to expand," the CEO said.

Taisugar is only interested in developing related industries that show strong potential, he said.

For example, Taisugar started developing hog-farming in the mid-1960s since the waste byproduct could be used to fertilize cane sugar fields. Then, in the early 1980s, it pursued horizontal development, expanding into horticulture and other land development schemes, the CEO said.

"Optimization of Taisugar's management diversification is the ultimate challenge the new chairman has to face in the near future," he said.

Lai said, however, that the fate of Taiwan Sugar lies in privatization. He said that the government should release 80 percent of the state-run company's shares to the public to boost the company's competitiveness.