Thu, Apr 14, 2016 - Page 14 News List

Wei Chuan to terminate partnership with Calbee

By Aileen Chuang  /  Staff reporter

Wei Chuan Foods Corp (味全食品) is to terminate its four-year partnership with Calbee Inc in a bid to focus on its dairy and frozen goods businesses, the Central News Agency reported yesterday.

The split in the companies’ four-year partnership also comes as the leading Japanese snack food maker makes moves to fine tune its business strategy in Taiwan, the Chinese-language Economic Daily News reported on its Web site.

Wei Chuan and Calbee, which operates the well-known snack brand Jagabee, launched a joint venture — Calbee (Taipei) Foods Co Ltd (台北卡樂比食品) — in June 2012 and established production lines of its potato products in Douliu Township (斗六) in Yunlin County.

Wei Chuan, which holds a 49 percent stake in Calbee Taipei, had intended to grab up to a 35 percent share of the potato snack foods market in Taiwan to become the No. 1 brand in the market.

However, affected by the substandard cooking oil scandal of Wei Chuan’s biggest shareholder, Ting Hsin International Group (頂新集團), not only have consumers boycotted Wei Chuan’s dairy products, but also Jagabee’s products have also seen a drop in sales, the reports said.

Calbee started negotiations to end its cooperation with Wei Chuan late last year in view of the dwindling Jagabee sales in Taiwan, the reports said.

The Japanese company reportedly plans to end its partnership with Wei Chuan by liquidating Calbee Taipei instead of buying back its 49 percent share in the joint venture, the reports said.

However, since Calbee is still interested in the local market, the company might seek alternatives to sell its flagship products, while stopping mass production in Taiwan, according to the reports.

Shares of Wei Chuan fell 4.02 percent to close at NT$20.3 yesterday in Taipei trading. The stock has declined by 17.14 percent over the past 12 months, compared with the broader market’s 10.49 percent setback, Taiwan Stock Exchange data showed.

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