Amid the global economic downturn, one particular enterprise on one of Taiwan’s outlying islands has not only remained unaffected, but bucked the trend last year by earning its highest revenue in its 56-year history.
Kinmen Kaoliang Liquor Inc (金門酒廠) is fully owned by the Kinmen County Government. The company is renowned for producing a high-proof distilled liquor made from fermented sorghum under the Kinmen Kaoliang brand name. Kaoliang is the Chinese word for sorghum. The fiery liquor is so famous and well-liked by consumers that it has become synonymous with Kinmen.
Last year, the company recorded revenues of NT$12.2 billion (US$366.86 million), its highest since its inception in 1953, posting 8.04 percent growth over 2007 and pre-tax earnings totaling NT$4.78 billion, also a new record.
PHOTO: CNA
The company started with one distillery and as market demand grew it set up a second distillery in 1997, equipped with more modern and automated facilities. In 2007, the second distillery added a second production line.
Although the company increased its production capacity to 24.71 million liters last year and has held more than 80 percent of Taiwan’s domestic market, it has been unable to keep pace with growing demand, partly because China opened its market to Kinmen Kaoliang in 2004.
General manager Wang Yi-min (王毅民) said the company intends to invest NT$3 billion to set up a third production line at the second distillery. When the new facilities become operational at the end of this year, production capacity would rise to about 30 million liters a year.
Kinmen Kaoliang is also planning to build a cellar that can store up to 30 million liters of the drink, he said.
“Kinmen Kaoliang Inc is the economic lifeline of the Kinmen county government and all Kinmen residents,” Wang said, explaining that the company’s sales have become a major source of funding for local construction and welfare programs.
To reward its 1,100-strong workforce for its hard work in the last year, the company hosted a New Year luncheon on Tuesday and gave away numerous prizes in a lucky draw, with the top prize being a new car worth nearly NT$600,000.
No one went home empty-handed, as the least valuable prize awarded was a dozen bottles of specially produced memorial liquor worth NT$8,000.
Lunar New Year falls at the end of this month and each employee could receive a year-end bonus and a performance bonus totaling three to four months salary, in addition to the regular monthly wage.
The history of the liquor factory’s development is a success story of how an infertile island turned a disadvantage into an asset. Kinmen has an annual average rainfall of only 98mm and the soil is so poor that it is only suitable for growing sorghum and peanuts.
The idea of building the liquor factory originated in 1952 with Kinmen’s first defense commander, General Hu Lien (胡璉). A makeshift distillery became operational in 1953, with soldiers familiar with liquor basics serving as technicians.
In its first 23 years, the fiery drink was sold in Taiwan under the counter because of the country’s tobacco and wine monopoly system at that time. As the reputation of the product grew, the factory kept expanding.
Many drinkers say they like Kinmen Kaoliang not only because of its smell and taste but, more importantly, because the 58 percent proof liquor — stronger than most brandy and whiskey — does not give them a hangover.
The liquor comes in a wide range of packages, with the standard 58 percent and 38 percent alcohol bottlings being the mainstays.
Since the middle of 2007, the company has provided free three-year storage for buyers of a 30-liter flagon of Kaoliang. The liquor is kept in military tunnels bored into a mountain that have been turned into cellars.
The public response to the liquor in 30-liter pottery flagons, priced at NT$21,000 each, has been overwhelming, mainly because the longer the liquor is stored in a cellar, the more fragrant and valuable it becomes.
It is believed that after three years of storage, the 30-liter package will be ideal for such occasions as wedding banquets, birthday parties or other celebrations.
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