Sat, Dec 23, 2006 - Page 12 News List

Taiwan Tobacco and Liquor plans China expansion

By Jackie Lin  /  STAFF REPORTER

Taiwan Tobacco and Liquor Corp (台灣菸酒公司), the nation's largest beer and liquor producer, plans to set up representative offices in Beijing and Shanghai as part of its internationalization efforts, company chairman Martin Tsai (蔡木霖) said yesterday.

"The application to expand our business across the Taiwan Strait has been approved by the Mainland Affairs Council, but it might take another four months before the Chinese government gives the green light," he said during a press conference.

three phases

Tsai outlined a three-stage plan for the company's expansion in China.

In the initial stage, Taiwan Tobacco will focus on marketing its well-known products, including "Long Life" (長壽) cigarettes, beer, rice wine and Kaoliang liquor (高梁酒), to build up brand awareness and set up distribution channels.

In the second stage, the company plans to grant authorization to or look for original equipment manufacturing (OEM) partners to turn out the products.

cooperation

The third and last stage will involve joint ventures or mergers to directly manufacture and sell its products in China, as well as provide manufacturing services to competing brands in line with the company's internationalization goals.

Taiwan Tobacco is a state-controlled enterprise that falls under the supervision of the Ministry of Finance.

The company has already achieved its full-year earnings target in the first 11 months of the year, with pre-tax profits reaching NT$6.9 billion (US$211.9 million), Tsai said.

He estimated that sales would grow 10 percent to NT$61.8 billion this year.

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