The state-run Taiwan Sugar Corp (Taisugar, 台糖) is mulling shutting down its poorly-performing coffee shop in Taipei, marking a failed attempt in its efforts to locate profitmakers outside its core business.
Transformed from Taisugar's money-losing convenience store six months ago, the shop on Jinshan South Road, was a brainchild of the enterprise's former chairman Kong Jaw-sheng (龔照勝), who was appointed to head the Financial Supervisory Commission in July.
The shop, which sells high-priced coffee and orchids, received widespread news coverage when it opened its doors in March with a celebrity-studded event.
"The shop only generates around NT$15,000 in sales a day, falling far short of our expectations," Taisugar spokesman Huang Jorn-hun (
Huang said the location of the shop was not ideal for luring customers to sit down and sip a cup of coffee.
In addition, orchid production has been slack in the current dull season, he added.
"We'll observe its performance for another two months before making the final decision," he said.
If there is no improvement, Huang said, the property would be changed back into a center showcasing biochemical products and cosmetics, as it is located in a neighborhood with many well-to-do residents.
Taisugar, in which the government owns a 96.6 percent stake, has been losing money in its main businesses of sugar, gas stations and convenience stores, but its annual financial reports still look good because of land sales from its massive holdings. The state-run company is the nation's largest landowner, with 54,657 hectares.
The company's core sugar business suffered a loss of NT$3.5 billion last year, mainly because of high personnel costs and subsidies paid to farmers.
For the first eight months of the year, Taisugar reported a loss of NT$816 million. But Huang said the company is expected to see a turnaround with a pre-tax profit of NT$2 billion by the end of December, which he attributed to brisk land sales.
After Lin Neng-pai (
"Manufacturing health-care products will be a key business for the company," Huang said, in view of the successful experience of Taiwan Salt Co (Taisalt,
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