Uni-President buys 5 percent stake in Chinese juice firm

Uni-President Enterprises Corp (統一企業), the nation's largest food conglomerate, secured a 5 percent stake in China's biggest producer of fruit juices yesterday, in a bid to tap the massive juice market across the Taiwan Strait, the company said in a statement filed to the Taiwan Stock Exchange.

The deal with China Hui Yuan Juice Holdings Co (中國匯源果汁控股), a subsidiary of Beijing Hui Yuan Juice & Beverage Group (北京匯源集團), also reflects closer cooperation between Uni-President and its Chinese rival, the statement said.

cooperation

"This deal helps build a foundation of mutual trust between the two companies. It is expected to strengthen our business cooperation and strategic alliance with China Hui Yuan, which was separated out of the [Beijing Hui Yuan] group to facilitate the investment deal," Uni-President spokesman Simon Hung (洪士民) told the Taipei Times in a telephone interview.

Uni-President released news of the US$30.30 million investment plan after the stock market closed.

The company's shares slid 0.67 percent to close at NT$14.85 on the stock exchange yesterday.

The deal was first reported by the Financial Times on Monday, which said the Chinese side was in informal talks with Coca-Cola Co, Pepsi Co and the Paris-based Groupe Danone, in addition to Uni-President.

Hung said the company is eager to seek merger targets or possibilities of buying into its overseas competitors, as the company is aiming to become Asia's largest food manufacturer by 2017.

Expansion

In recent years Uni-President has expanded its operations to China, the Philippines, Thailand, Indonesia and Vietnam. The company's beverage sales in China accounted for over 50 percent of its overall operations across the Taiwan Strait.

Beijing Huiyuan Group, established in 1992, holds a leading position in China in manufacturing pure, refrigerated juice. Its 50 production lines can churn out 2.16 million tonnes of juice per year. The group forecasts that this year the newly established juice maker -- China Hui Yuan -- will rake in 2.6 billion Chinese yuan in annual sales, with a net profit of 250 million yuan, the statement said.