Mon, Apr 26, 2004 - Page 10 News List

Taiwan Tobacco to hold privatization vote today


Taiwan Tobacco and Liquor Corp (台灣菸酒公司), the nation's largest alcoholic-beverage producer, will hold a company-wide poll today to let employees voice their opinion about the government-set privatization plan, the company said in a statement yesterday.

Taiwan Tobacco was spun off from the Taiwan Tobacco and Alcohol Monopoly Bureau (菸酒公賣局) in July 2002, and the government is hoping to finalize its privatization plan by the end of this year.

Viewing the privatization plan as a way to strengthen the company's competitiveness, Taiwan Tobacco's management submitted a proposal to the Cabinet last April, highlighting their plans for better corporate management by bringing in strategic partners and selling shares to private investors.

But the company has not yet received a greenlight from the Cabinet, as members of the com-pany's labor union have protested several times against such plans, the statement said.

The company has been facing stiff competition from foreign rivals, particularly those from China, since Taiwan joined the WTO on Jan. 1, 2002.

Company chairman Morgan Hwang (黃營杉) told lawmakers earlier this month that the company's market share had been decreasing significantly.

He pointed out that its rice wine market share had declined to 8 percent of the nation's total sales of white liquor, and that the counterfeit "Long Life" cigarettes from China already held a 10-percent share of the local market.

To overcome the bottleneck in its privatization push, the company decided to hold a companywide vote and mapped out four possible directions for employees to vote on, the statement said.

According to the statement, the choices are: to bring in strategic partners and sell shares to complete the privatization plan; to sell the company's shares and gradually privatize the company; to maintain the company as a state-run entity while undertaking corporate restructuring or to split up into four state-run units -- tobacco, beverage, beer and distribution.

The choices:

* Bring in strategic partners and sell the company's shares to complete the privatization plan

* Sell the company's shares and gradually privatize the company

* Maintain the company as a state-run entity but undertake corporate restructuring

* Split into four state-run units: tobacco, beverage, beer and distribution

Employees will be able to cast their ballots between 9am and 3pm, the statement said, and the results will be made public tomorrow.

The company said privatization is a means to an end but not the goal. While the government decided to privatize all state-run enterprises about a decade ago, time has changed and it is necessary for all parties to re-think the policy, the statement said.

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