President Chain Store Corp (統一超商), the largest convenience-store operator in the nation with more than 3,500 7-Eleven stores, yesterday announced a joint venture with Guangdong-based Livzon Pharma-ceutical Group Inc (麗珠醫藥集團) to tap China's booming retail market.
The 50 million yuan (US$6.05 million) venture, Shenzhen President Cosmed Corp (統一康是美), is 65 percent owned by President Chain and 35 percent by Livzon, President Chain said in a statement.
The new venture will open 100 Cosmed outlets within five years in Shenzhen and Guangzhou, selling cosmetics and pharmaceutical products, the statement said, with the first drugstore expected to open sometime this quarter in Shenzhen.
President Chain Store president Hsu Chung-jen (徐重仁) and Zhu Baoguo (朱保國), chairman of Joincare Pharmaceutical Group Industry Co (健康元藥業集團), Livzon's parent company, signed the agreement in Shenzhen.
"I believe that with our market presence and systematic management and marketing strategy, we'll be able to bring a variety of products and services to meet consumers' need," Hsu was quoted as saying in the statement.
President Chain runs 113 Cosmed stores in Taiwan, making it the country's second-largest drugstore chain after the Hong Kong-based Watsons Taiwan, which has 241 outlets. It plans to open 87 more Cosmed stores in this country by 2006. Cosmed reported NT$2.95 billion in revenues last year.
Livzon was established in 1985 and became the first Chinese pharmaceutical company to list both A and B shares in China's stock market in 1993. It is now one of the top 500 companies in China by sales, and one of the top 50 pharmaceutical stores.
President Chain is keen to capitalize on China's retail market before Beijing opens the sector to overseas investors by the end the year.
While the company is hoping to duplicate its Taiwanese experience by running 7-Eleven stores in Beijing, Seven-Eleven Japan Co beat it to the punch and will open the first such store next Thursday.
Seven-Eleven Japan obtained an approval in January to set up a venture, with two Chinese companies, to open 7-Eleven outlets in Beijing. The Japanese company has said it owns a 65 percent stake in the venture.
Last year President Chain said it would take a 14 percent stake in Seven-Eleven Japan's Beijing venture under a preliminary agreement. However, it is still in discussions with the Japanese company about getting a bigger share, a President Chain official said.
"We will not give up the [7-Eleven] franchise project in Beijing," Zenia Lee (李玉雯), a President Chain public relations official said yesterday.
Lee said the company will negotiate with US-based 7-Eleven Inc for permission to to set up shop in China.
She said several high-level executives of the US company are scheduled to visit Taipei in the middle of the month.
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