Thu, Feb 20, 2014 - Page 13 News List

Hey Song to distribute Choya plum liqueur

EXCLUSIVE RIGHTS:The beverage maker is hoping the new deal could boost its sales and margins after losing a bid to renew its sales rights to Kinmen Kaoliang

By Camaron Kao  /  Staff reporter

Local beverage manufacturer Hey Song Corp (黑松) yesterday said it had acquired the exclusive rights to sell Choya plum liqueur in Taiwan and aims to double sales of the Japanese liqueur to NT$200 million (US$6.61 million) a year.

Hey Song is to start selling the liqueur on Monday after Choya Umeshu Co completes its product upgrade and packaging changes.

Hey Song plans to cut the price of the liqueur to NT$580 per bottle from between NT$675 and NT$729 now to expand its market share, said Wang Ming-chuan (王銘泉), director of the company’s commercial division.

“High prices are the reason behind the product’s declining sales in recent years in Taiwan,” Wang said.

Choya plum liqueur is currently sold in several Japanese department stores, convenience chain stores and hypermarkets in Taiwan.

Hey Song plans to expand its sales channels to include supermarkets, restaurants, karaoke bars and about 1,000 outlets operated by Taiwan Tobacco and Liquor Corp (台灣菸酒), Wang said.

Choya leads the market in Japan, accounting for more than 40 percent of the market for plum liquer, Hey Song said.

It commands an even bigger share in Taiwan, accounting for about NT$100 million of total market sales of NT$130 million a year, Hey Song said.

The right to distribute Choya plum liqueur in Taiwan is a boost for the company after it lost a bid to renew its right to sell Kinmen Kaoliang liquor to food maker Vedan Enterprise Corp (味丹).

While Kinmen Kaoliang contributed about NT$2 billion in annual sales to the company, Wang said the gross margin for Choya plum liqueur is higher, without offering exact figures.

The company also has a new factory in Jhongli City (中壢), Taoyuan County, that will start operating by the end of the second quarter, company chairman Chang Pin-tang (張斌堂) said, adding that it will produce carbonated lactic acid drinks and juices.

Built at a cost of NT$1 billion, the factory can produce 600 bottles of beverages every minute, and should boost the company’s annual revenue by NT$1 billion when it is running at full capacity, Hey Song said.

“We will launch new products when the factory is ready for operation. Utilization rates will depend on the sales of our new products,” vice president Pai Chin-wen (白錦文) said.

Hey Song reported a revenue of NT$6.54 billion for last year, down 4.68 percent from NT$6.86 billion in 2012, as the company, like its peers, was affected by food safety concerns, Pai said.

The company posted a loss of NT$177.16 million in the first nine months of last year, compared with a profit of NT$371.31 million a year earlier, company data showed.

The company has not released its full-year results, but Pai said he expects full-year losses to be smaller than the figure for the first three quarters.

For this year, Hey Song expects to see smaller losses from its Chinese subsidiaries as it focuses on niche markets and on selling nutritional drinks such as banana milk, he said.

The company has not finalized plans to dispose of its land in Shenkeng District (深坑), New Taipei City (新北市), as it is still waiting for the government to approve its application to change it from residential to industrial-use land.

In 2012, the company reported a profit of NT$8.11 billion, bolstered by an income of NT$8.2 billion from the sale of a plot of land near the Breeze Center (微風廣場) department store in Taipei.

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