Food and retail conglomerate Uni-President Enterprises Corp (統一企業) yesterday said it plans to focus on selling high-priced instant noodles in China in a bid to find a niche amid fierce market competition there.
The Tainan-based firm sells instant noodles and beverages in China through its Hong Kong-listed subsidiary, Uni-President China Holdings Ltd (統一中國控股).
Revenue generated by instant noodles makes up nearly 30 percent of Uni-President China’s total sales, while the beverage business contributes 60 percent, company statistics showed.
“We will put more efforts into the promotion of the Expert of Soup (湯達人) and Man Han Feast (滿漢大餐) series in China,” Uni-President chairman Alex Lo (羅智先) told reporters after an investors’ conference in Taipei.
Average selling prices of Expert of Soup and Man Han Feast are about 5 yuan (US$0.75) and 18 yuan respectively, compared with 2.5 yuan for many low-priced instant noodles in the Chinese market.
Lo said Uni-President China would target a specific demographic under the new strategy, rather than trying to grab a broader share of China’s massive market.
However, the company faces other challenges, such as rapid changes in China’s food industry, he said.
For example, it could become more difficult for the company to find workers for entry-level positions as China’s labor force is expected to start shrinking in the next few years, Lo said.
“Uni-President China needs to rethink its strategies every three to five years in response to structural changes in China,” he added.
Uni-President China on Tuesday posted a net profit of 570 million yuan for the first half of this year, a decline of 26.5 percent from 775 million yuan a year earlier.
The latest figure translated into earnings per share of 0.13 yuan, compared with 0.18 yuan a year earlier, company data showed.
In the first six months of the year, Uni-President China saw revenue decline 7.1 percent to 10.89 billion yuan from 11.7 billion yuan, due mainly to intense competition in China.
Gross margin declined by 3.3 percentage points to 33.6 percent over the period, which the company attributed to increasing raw material prices and its ongoing restructuring plans.
Uni-President Enterprises — which also has several Taiwan-listed subsidiaries, including President Chain Store Corp (統一超商) and Ton Yi Industrial Corp (統一實業) — also released its latest financial statements yesterday.
Net profit in the first half inched up 0.8 percent annually to NT$9.18 billion (US$302.4 million), or earnings per share of NT$1.61, while sales fell 7.24 percent to NT$196.2 billion, the company said.
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