Vigor Kobo plans to expand in China

By Amy Su  /  Staff reporter

Tue, Jan 01, 2013 - Page 13

Vigor Kobo (維格餅家), a bakery specializing in traditional Taiwanese cakes and pastries, plans to expand to 100 sales channels in China in the near future on the back of support from China’s Fosun Group (復星集團), one of its major shareholders.

The expansion plan might help Vigor Kobo report higher sales in China than in Taiwan this year, a company official said yesterday.

“The year of 2013 will be the first year the company develops in China,” Vigor Kobo president Wallen Her (何萬誠) said.

In November, the Ministry of Economic Affairs’ Investment Commission approved Fosun’s application to acquire a 20 percent stake of Vigor Kobo through Hong Kong subsidiary Laxton Investments Ltd, making it the first Chinese company granted permission to invest in Taiwan’s food sector.

Her said Vigor Kobo’s plant in Kunshan, Jiangsu County, China, is expected to be fully operational this month for manufacturing products for the market of China, while the company is ready to launch its flagship store in Shanghai’s Yuyuan Tourist Mart (豫園商城) — the largest retailing conglomerate in China — in June.

Her said opening a store in Yuyuan will provide extraordinary opportunities for the company, citing data that an average of 38 million Chinese consumers and foreign tourists are expected to visit the tourist mart per year.

Furthermore, the company plans to launch 50 to 100 new retail channels owned by Fosun — such as Lianhua Supermarket Holdings Co Ltd (聯華超市) and Jiu Guang Department Store (久光百貨) — as its target in the preliminary stage of expansion in China, Her added.

Her said the company will keep focusing on Shanghai, as well as in Jiangsu and Zhejiang provinces, in the near future.

Although Taiwanese traditional cakes are popular souvenirs among Chinese tourists visiting Taiwan, Her said the company intends to develop and produce new and original pastries for sales in China to diversify its product range.

For the market of Taiwan, the company plans to spend around NT$300 million (US$10.3 million) building its second tourism factory in Greater Kaohsiung, other than the current 15 sales outlets.

But following the expansion in Greater Kaohsiung, Her said the company may not launch too many large expansion plans in Taiwan over the near future amid the nation’s limited market scale.

Under the company’s internal analysis, sales contributed by foreign tourists accounted for around 70 percent of company revenue last year.

Vigor Kobo posted net profit of NT$69.55 million, or NT$4.05 per share, in the first 10 months of last year, higher than the full-year profitability in 2011, which reported net profit of NT$45.97 million, or NT$3.06 per share, the company said in a statement.

Shareholders yesterday approved Vigor Kobo’s plan to set up an additional seat on its board, with Laxton elected to sit on the company’s six-member board.

The company began trading on the Emerging Stock Market on Dec. 24, with shares dropping 10.83 percent to close at NT$107 on Friday.

Vigor Kobo is allowed to file an application for switching its listing to GRETAI Securities Market after six months of trading on the smaller bourse. However, the company yesterday did not specify its timeframe of such bourse switching.