Thu, Dec 05, 2019 - Page 12 News List

Grape King’s China unit disappoints

‘UNCERTAINTY’:The company had expected Shanghai Grape King to post 50 percent annual growth in sales, but performance was hampered by a slowing market in China

By Kao Shih-ching  /  Staff reporter, in Taoyuan

Grape King Bio Ltd research department director Chen Chin-chu, left, and chairman Andrew Tseng yesterday pose for photographers at the company’s new plant in Taoyuan’s Longtan District.

Photo: Kao Shih-ching, Taipei Times

Grape King Bio Ltd (葡萄王) yesterday said its Chinese unit, Shanghai Grape King Enterprises Corp (上海葡萄王), has performed sluggishly this year, posting a double-digit decline in sales to about NT$705 million (US$23.11 million) in the first 10 months.

The supplier of probiotics and mycelium health foods had expected the Chinese unit to post 50 percent annual growth in sales, Grape King Bio chairman Andrew Tseng (曾盛麟) told a media briefing in Taoyuan.

Shanghai Grape King was affected by lower orders from two of its major clients in China amid a slowing market dragged by stricter marketing regulations and falling consumer spending due to a US-China trade dispute, Tseng said.

The unit mainly manufactures beauty drinks, such as those containing collagen, for corporate clients.

“Chinese customers are willing to spend on health foods, but they are reducing their spending due to uncertainty about economic development,” Tseng said.

Sales in China have posted annual declines every month since April, with third-quarter sales falling more than 50 percent from a year earlier, Tseng said.

The company expects its Chinese business to recover in the second quarter of next year due to a low comparison base and its diversification strategy.

It aims to gain 10 new clients with possible orders of more than 10 million yuan (US$1.42 million) each next year, Tseng said.

Shanghai Grape King would also begin offering probiotics next year to diversify its product range, he added.

In contrast, Grape King’s business at home remained rosy, posting a double-digit growth in sales in the first 10 months, while its direct-sales subsidiary, Pro-Partner Inc (葡眾), reported that sales rose 5 percent annually, Tseng said.

With a new plant in Taoyuan’s Longtan District (龍潭) beginning operations in July to supply more probiotic products, the firm’s Taiwanese business is expected to remain strong next year, he said.

Grape King has partnered with Uni-President Enterprises Corp’s (統一企業) distribution subsidiary to market more of its health food products, such as Come Best tonic drink, at President Chain Store Corp ( 統一超商) stores and drugstore chain Cosmed (康是美), Tseng said.

Meanwhile, GK Bio International Sdn Bhd, a joint venture by Grape King and Malaysia-based All Cosmos Bio-Tech Holding Corp (全宇生技控股), would begin marketing Grape King’s products next year after gaining approval from Malaysian authorities, Tseng said.

Overall, the company reported that consolidated revenue inched up 0.07 percent annually to NT$7.32 billion in the first 10 months, while net profit fell 1 percent annually to NT$880 million in the first three quarters.

Earnings per share totaled NT$6.49, compared with NT$6.57 last year, company data showed.

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