Uni-President Enterprises Corp (UPE, 統一企業) yesterday confirmed that founder and honorary chairman Kao Ching-yuan (高清愿) died last week at the age of 88.
A private funeral was held in Tainan’s Yongkang District (永康) yesterday, attended only by Kao’s family and friends, as well as Uni-President employees.
Born in Tainan on May 24, 1929, Kao was from a poor family and was not formally educated beyond elementary school. He founded UPE in 1967 and served as its chairman until 2013.
Photo: Yang Ya-min, Taipei Times
The company grew to become a conglomerate encompassing food manufacturing, retail, leisure and express-delivery services. It also operates the Starbucks coffee chain in Taiwan via a joint venture with the Seattle-based group.
The conglomerate is also known for operating 7-Eleven, the nation’s largest convenience store chain, through its affiliate President Chain Store Corp (PCSC, 統一超商).
Kao launched the convenience store chain in the 1980s, aiming to expand retail channels available for UPE products.
Photo: Wu Chun-feng, Taipei Times
UPE’s footprint expanded in the 1990s, with manufacturing bases set up in China, Indonesia, Thailand and other countries.
Kao, who had only one child, handed over the business to his son-in-law, Alex Lo (羅智先), in November 2013. Since then, the company has continued to grow under Lo’s leadership, weathering a series of food-safety crises in Taiwan while expanding its presence in China.
Lo’s management style and strategy of focusing on improving margins over sales growth has been well received by the market, with foreign institutional investors raising their holdings in UPE from about 44 percent to 52 percent in the past decade.
However, a potential succession challenge is on the horizon, as Lo had established a rule stipulating that key executives must retire at the age of 60 to make way for new talent.
Lo’s 60th birthday is this year.
Lo is expected to conform to the rule he has set, but major stakeholders in the company are likely to try to convince him to stay to avoid disruptions in leadership, industry observers said.
In addition, the company’s triennial board elections are to take place this year.
UPE’s net income rose 26.8 percent annually to NT$14.11 billion (US$435.79 million) last year, with earnings per share (EPS) of NT$2.48. Consolidated sales dipped 0.5 percent year-on-year to NT$416.15 billion.
PCSC’s net income decreased 9.8 percent to NT$8.24 billion last year, with EPS of NT$7.92, while consolidated sales grew 2.52 percent to NT$205.5 billion.
Despite a tepid consumption environment, UPE is expected to see continued solid growth and market share gains in all segments, driven by new product launches and contributions from its Chinese subsidiary, Uni-President China Holdings Ltd (UPC, 統一中國控股), Yuanta Securities Investment Consulting Co (元大投顧) said in a note this week.
Uni-President China last year saw net income rise 192 percent annually to 835 million yuan (US$129.18 million) as it continued its high-end product focus, coupled with a strong pipeline of new products, Yuanta said.
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