Uni-President Enterprises Co (統一企業) chairman Kao Ching-yuan (高清愿) yesterday tendered his resignation, handing over the reins to his son-in-law after decades at the top of the country’s food sector.
The 84-year-old Kao, who spent 46 years with the nation’s largest food company conglomerate, will still sit on the company’s board after resigning from the chairmanship, the company said in a statement.
Uni-President president Alex Lo (羅智先), 57, will assume the chairmanship as well as his current position at the company, which his father-in-law founded in 1967 in Greater Tainan’s Yongkang (永康).
Lo, who entered the company in 1985, took his current position in 2007 and is likely to keep the title of president until his tenure ends in 2016, he said at the company’s shareholders’ meeting earlier this year.
"We do not consider the management change as surprising but believe the new position will further empower Lo in enhancing the group’s operational efficiency and synergy among different group entities," Deutsche Bank analyst Joelian Tseng (曾慧瓊) said in a client note yesterday.
Uni-President’s chairmanship change, which took effect yesterday following a board meeting, came amid the latest food safety scare in Taiwan.
Several food manufacturers — including Ting Hsin International Group (頂新集團) and Namchow Group (南僑集團) — have been questioned and inspected to determine whether their products contain the food additive copper chlorophyllin, which is banned from use in edible oil and noodle products because it results in oil oxidation upon heating, which can lead to liver and kidney damage if ingested.
Uni-President’s retailing subsidiaries Santa Cruz Organic Food (聖德科斯) and President Chain Store Corp (統一超商) have been ordered by local health regulators to take some of their products — including energy soup, green milk tea and cold noodles — off the shelves this week after they were found to contain copper chlorophyllin, rather than the natural chlorophyll listed on their packaging.
Uni-President yesterday said it expected the incident to have limited impact on its business and shareholders’ interests. It did not comment on whether there was a connection between its chairmanship change and the food safety issue.
Tseng said the incident would have limited impact on the company, given the small earnings contribution from those subsidiaries and the affected products.
With a portfolio ranging from instant noodle and beverage products, retailing and pharmaceuticals to property development and securities brokerage, Uni-President is one of the nation’s largest conglomerates.
In China, the company also has exposure in instant noodle and ready-to-drink tea and juice businesses through Uni-President China Holdings Ltd (統一中國控股) and Uni-President Southeast Asia Holdings Ltd.
Lo faces challenges to restructure the company and improve its profitability amid a tougher environment in its home market and in China, where competition is increasing, but consumption weakening.
Analysts say that the company needs to continue strengthening its brand image and enhancing product differentiation to adapt to the tougher environment.
Last year, Uni-President reported consolidated revenue of NT$427.52 billion (US$14.43 billion), up 10.2 percent from 2011, while net profit grew 31.3 percent year-on-year to NT$12.41 billion, or earnings per share of NT$2.41.
In the first three quarters this year, the company saw its net profit increase by an annual rate of 8.9 percent to NT$10.98 billion, or NT$2.13 per share. Consolidated revenue expanded 5.04 percent to NT$359.64 billion in the first 10 months from a year earlier, according to company filings to the Taiwan Stock Exchange.
Uni-President shares rose 0.93 percent to close at NT$54 yesterday on the Taiwan Stock Exchange.
This story has been updated since it was first published.