Tingyi (Cayman Islands) Holding Corp (頂益控股), China's biggest instant noodle maker, and Uni-President Enterprises Co (統一企業), Taiwan's biggest, are extending their noodle war to Taiwan from China.
Tingyi, founded by brothers Wei Ing-chou and Wei Ying-chiao in northern China 10 years ago, said it will start making and selling its popular Master Kang (
The company's quest to grab a slice of a NT$10 billion (US$287 million) market that analysts say is already saturated won't be easy. There are five other major instant noodle makers in the local market.
"To complete our Greater China strategy, we have to enter the Taiwan market, even though it has negative or flat growth," Tingyi chief financial officer Frank Lin said in an interview.
"Based on the brand name, consumer curiosity and the product's quality and price, getting 10 percent should be simple," Lin said.
Taiwan's instant noodle war will be fought in supermarket aisles. Uni-President controls 3,000 7-Eleven stores, while Tingyi will rely mostly on the 70 supermarkets operated by family-run affiliate Wei Chuan Food Corp (味全食品).
"The competition will not be on the noodles, but on the distribution channels," said Richard Huang, who helps manage NT$8 billion of equities at Shinkong Investment Trust Co (新光投信).
Tingyi shares dropped HK$0.02, or 1 percent, to HK$1.96 at 11:41am in Hong Kong. Uni-President shares rose NT$0.15, or 1.3 percent, to NT$11.40. Wei Chuan shares rose NT$0.30, or 2.9 percent, to NT$10.80.
Tingyi's move to Taiwan may be a boost for Wei Chuan, in which the Wei family bought a controlling stake through its privately held Ting Hsin (Cayman Islands) Holding Corp in 1998.
Wei Chuan had posted five annual losses since 1996, though its shares surged 56 percent this month.
"After standing firm in China, Tingyi is helping its affiliate stand firm in Taiwan," said Lin Kuan-ho, who helps manage about NT$2.1 billion of stocks at First Global Investment Trust Co. (
"In terms of brand name, product range and distribution, Wei Chuan's organization is quite weak, compared to Uni-President."
Tingyi is leasing a factory from Wei Chuan to make instant noodles that it says will be attuned to local taste buds.
The noodles will be slightly blander than the saltier, oilier Master Kang version.
"A new entrant will definitely create pressure," said Lee Chin-shian, a spokesman for Ve Wong Corp, which earns 20 percent of its sales from instant noodles. "There will be competition on price and taste."