China Pacific Catering Services Ltd (CPCS, 華膳空廚), an in-flight catering service venture between China Airlines Ltd (CAL, 中華航空) and John Swire & Sons (HK) Ltd, plans to invest NT$1 billion (US$33.6 million) to boost its capacity by 50 percent by the end of 2015.
The company yesterday said that it is to invest NT$1 billion in buying a plot of land as large as 8,800m2 in Taoyuan to build the caterer’s third plant — which is scheduled to be completed by the end of 2015.
“We hope the new plant will help boost the company’s capacity,” CPCS president Charles Peng (彭宗漢) told a media briefing on Monday.
Founded in 1994, CPCS is one of the biggest flight caterers in Taiwan. Currently, CAL holds a 51 percent stake in the venture, while Swire — the parent company of Hong Kong’s Cathay Pacific Airways Ltd (國泰航空) — has the other 49 percent.
The investment reflects the company’s optimism about the nation’s tourism sector, which may boost the number of flights arriving at Taiwan Taoyuan International Airport and further drive up demand for in-flight catering services, Peng said.
In addition, the construction of a third terminal and other infrastructure at the airport, as well as the planned “airport city” project in Taoyuan, have also strengthened the company’s confidence in making big investments, Peng added.
Taiwan Taoyuan International Airport currently provides services for about 25 million visitors a year, with that number expected to nearly double to 45 million by 2020, Peng said, citing government data.
Peng said that CPCS expects the new factory to increase the number meals produced each day by more than 33 percent to 60,000, up from 45,000 meals a day, Peng said, adding that it is “a very conservative estimate.”
That would help the company offer in-flight catering to 250 flights per day, significantly boosting its sales and profits, Peng said.
CPCS plans to arrange syndicated loans and to sell new shares to finance the expansion plan.
The caterer made NT$2 billion in revenue last year and posted a NT$148 million net profit in the first half of this year, from which CAL booked a net income of NT$75.55 million, according to the airline’s stock exchange filing.