FamilyMart will add China shops after a new deal

Taiwan FamilyMart Co (全家便利) plans to join forces with China-based noodle maker Ting Hsin Group (頂新集團) to set up a chain of convenience stores in the booming market across the Strait, officials said yesterday.

Taiwan's second-largest chain told the Taipei Times, "We are now in talks with our Japanese parent company FamilyMart Co, Itochu Corp and Ting Hsin to open stores in China," said a FamilyMart official close to president Pan Chin-ting (潘進丁).

Japan-based Itochu is primarily a trading company.

"Several of our high-ranking officials have recently met with Japanese executives from Itochu and the prospects seem positive," said the official who preferred to remain anonymous.

He did not say if they have reached a final agreement, but did say "We will be in China, that's for sure."

A local Chinese-language newspaper, however, reported that the four parties have decided to establish a holding company registered in the Virgin Islands with paid in capitalization of US$3 million.

Based on their initial plans, Ting Hsin Group will own 55.5 percent of the holding company and has won the licensing to manage FamilyMart stores in China, the paper said.

Ting Hsin controls China's biggest instant-noodle maker Tingyi (Cayman Islands) Holding Corp (頂益控股), which sells China's well known "Master Kang" (康師傅) brand of noodle.

But the FamilyMart official dismissed the report, saying only that they have sent a six-member team to Shanghai to conduct preliminary studies on logistics, supply and management practices there.

Officials at Ting Hsin were unavailable for comment.

FamilyMart's chairman Tu Cheng-tsu (杜正次) had said at a shareholders meeting earlier in June that the company, along with its Japanese parent company and Itochu Corp, would launch its first FamilyMart store in March 2003 in Shanghai, with the aim of having 3,000 outlets in China by 2010.

With around 1,200 outlets already in operation in Taiwan, FamilyMart plans to open 114 outlets this year, Chang Jen-dung (張仁敦), spokesman and vice president of the company, said. It set up 150 new outlets last year, he said.

Since the local market may be reaching saturation, FamilyMart and rival President Chain Store Corp (統一超商), which operates nearly 3,000 7-Eleven stores in Taiwan, may be looking for future growth in China.

US-based 7-Eleven Inc said last month they plan to open as many as 500 outlets in Beijing over the next five years and have granted a license to a new joint-venture company consisting of President Chain Store, 7-Eleven Japan Co, and a Chinese partner that has yet to be determined, to open shop next year in the Beijing area.