Sat, Jul 26, 2003 - Page 10 News List

Foreigners thirsty for sip of Taiwan Tobacco & Liquor

By Jessie Ho  /  STAFF REPORTER

Foreign investors have approached state-run Taiwan Tobacco and Liquor Corporation (TTL, 台灣菸酒公司) with a view to gaining a slice of the lucrative alcohol and cigarette market here, a company official said yesterday.

"Many foreign firms have made inquiries about investment after we announced our privatization plan," said Morgan Hwang (黃營杉), chairman of the state-run monopoly. "We will meticulously select our partners."

TTL, a 56 year-old company with NT$35 billion in working capital, was spun off from the Taiwan Tobacco and Alcohol Monopoly Bureau (台灣省菸酒公賣局) last July, and is set to complete privatization by the end of next year. By that time, over 50 percent of its shares will be released to private investors, at a price of about NT$20 each.

"Prospective firms that can ensure job opportunities for the more than 7,000 employees in the company, while increasing competitiveness and feeding into related local industries will be taken into consideration first," Hwang said.

While Hwang did not reveal any of the companies that have expressed an interest in pumping cash into TTL, one Belgian beer brewer said that it and all major brand names in the market would jump at the chance of getting involved in TTL's privatization project.

"Taiwan's beer market is lucrative," said Vincent Wang (王得進), the marketing and sales coordinator for Beck's Beer, a brand of Belgian beer giant Interbrew. "Foreign firms including us are interested in getting a slice of TTL's annual billion-dollar profits through investing in the company."

Last year, TTL reported NT$62.8 billion in revenue, a decline of 15 percent from the previous year due increased competition after the local liquor market was liberalized. Its share of the beer market also dropped from 82 percent in 2001 to 74 percent last year.

The 8-percent drop was grabbed by China's Tsingtao Beer (青島啤酒), which became the second-largest beer in Taiwan within just a year of entering the Taiwanese market. Wang, however, shrugged off speculation that TTL is going downhill.

"TTL's beer sales have already bounced back and swept over the market this summer, demonstrating the strength of the company and its products," Wang said.

Tsingtao Beer may be still a formidable rival for the indigenous Taiwan Beer, but after the government banned Tsingtao's TV commercials in February in retaliation for China's ban on Taiwan Beer's ads, its sales have been declining.

TTL's Hwang was also upbeat about this summer's sales results to date, saying the company has recently taken back 4 percent in market share with its new Gold Medal Taiwan Beer (金牌台灣啤酒) release.

"The demand for new products almost exceeds supply so we are considering dropping the commercials and going back to the promotion of Taiwan Beer," Hwang said. "I believe our revenues for this year will reach NT$69 billion."

One analyst is looking forward to seeing foreign investment in the new privatized TTL.

"In addition to advancing competitiveness, foreign companies will be a great help in promoting TTL's products in the international community," said Chou Tien-chen (周添城), an economics professor at National Taiwan University.

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