Wei Chuan Foods Corp (味全食品) yesterday said it expects next quarter’s revenue to grow from a year earlier on the back of new orders from Starbucks Corp.
Wei Chuan this month began production of the US chain’s bottled products, which would be distributed in convenience stores in more than 20 Chinese cities, including Beijing, Shanghai and Guangzhou, chief executive Michael Su (蘇守斌) told an annual shareholders’ meeting.
The company is also in talks with some China-based restaurant chains and brands to increase its revenue sources, Su said.
The company, which primarily manufactures lactic acid drinks, juice and yogurt in China’s eastern provinces, said it plans to build a new plant in Suzhou by the end of next year and continues capacity expansion at its existing plants in Hangzhou and in Hubei Province.
The 64-year-old Wei Chuan’s expansion of its Chinese operations is part of its turnaround plan following mounting losses over the past years, as the company has been the target of a nationwide consumer boycott since its parent group, Ting Hsin Group (頂新集團), was embroiled in a food safety scandal in Taiwan in 2014.
Wei Chuan held only 22.5 percent share in the local milk market last year, down from the peak of 40 percent prior to 2014, according to its annual report.
Revenue from China, taking up about 55 percent of the company’s total sales, has surpassed sales from Taiwan since 2015, data showed.
In the first five months of this year, cumulative revenue expanded 10.56 percent annually thanks to the rapidly growing business in China, the company said, adding that the growth momentum should continue throughout this year.
Wei Chuan said it also aims to improve its financial structure through an asset renewal project for an idle plant in New Taipei City’s Sanchong District (三重).
The company is seeking potential buyers for the facility valued at an estimated NT$11.8 billion (US$387.47 million), it said.
Wei Chuan posted a net profit of NT$664.26 million for the whole of last year, or earnings per share of NT$1.31, ending three consecutive years of losses.
Revenue was NT$17.75 billion over the period, a 3.95 percent increase from NT$17.07 billion a year earlier, with gross margin increasing to 31.29 percent from 26.86 percent.
Shareholders yesterday approved a proposal not to distribute a cash dividend this year.
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