The state-run Taiwan Tobacco and Liquor Corp (
"There may be a window of opportunity for Taiwan Tobacco to enter Chinese markets next year, which I hope will be a revolutionary year," Hwang said yesterday in a telephone interview from Beijing where he is currently conducting a week-long inspection tour.
The 56-year-old corporation began encountering difficulties in expanding its domestic market share after Taiwan opened up its market to foreign competitors, including Chinese brands, a few years ago.
Taiwan Tobacco, which has NT$35 billion in working capital, was spun off from the Taiwan Tobacco and Alcohol Monopoly Bureau (菸酒公賣局) in July last year.
"To maintain our survival, Taiwan Tobacco must soon branch out abroad and China is a very important and lucrative destination," Hwang said, adding that Chinese tobacco and liquor makers have also expressed interest in Taiwan's market.
Last year, Taiwan Tobacco reported NT$62.8 billion in revenues -- a decline of 15 percent from the previous year which it attributed to increased competition. Its share of the beer market also dropped to 74 percent last year from 82 percent in 2001.
That 8 percent was grabbed by China's Tsingtao Beer, which became the second-largest selling beer in Taiwan within just a year of entering the market.
Taiwan Tobacco's two flagship brands -- Taiwan Beer and Long Life cigarettes -- may be launched in China next year, according to the company's plans, Hwang said.
The company has also authorized a law firm specializing in patents and trademarks to negotiate with Chinese officials. But Hwang denied speculation that China has requested a tobacco franchise from the company in return for its entry into Chinese markets.
While Huang is visiting Beijing, the company's union yesterday petitioned the Ministry of Finance to express their opposition to the government's plans to privatize the business.
"We are strongly opposed to the ministry's hasty move to privatize the company," said Shieh Su-fan (
The government is hoping to finalize the company's privatization plan by the end of next year. But Shieh said the union disagrees with arguments that the privatization plan will strengthen the company's competitiveness and that bringing in strategic partners will improve the company's management.
Shieh also said that the union disagreed with the government's plan to sell more than 50 percent of the company's shares to private investors at about NT$20 per share.
To demonstrate their displeasure, the union plans to to stage a large-scale labor action on Nov. 1.
In response to the union's petition, Chang said privatization measures will be hammered out to protect workers' rights while maintaining the company's competitiveness.
When asked what he thought about the petition presented by his employees in Taipei, Hwang said that privatization is inevitable for Taiwan Tobacco.
"Amid intensifying competition, privatization may not be a necessary move for us in one year or two, but it is a must in the long term," Hwang said.
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