Food and beverage maker Ve Wong Corp (味王) yesterday said it expects its Vietnam operations to drive growth, as business is sluggish in Taiwan.
“Our Taiwanese business is likely to be sluggish this year as supermarket sales have been declining since the fourth quarter of last year,” Ve Wong chairman Chen Ching-fu (陳清福) said after the company’s annual general meeting in Taipei. “However, we believe our business in Vietnam would thrive this year due to a growing population and young workforce.”
Vietnam has contributed about 20 percent to the company’s total sales in the past few years, compared with 40 percent each from Taiwan and Thailand, Ve Wong said.
The company is mulling further investments in Vietnam, as expanding its business in Southeast Asian markets is one of the four goals for the 60-year-old company, Chen said.
Other goals include upgrading equipment, launching new food products with fewer additives and developing the company’s idle assets, he said.
Ve Wong established a new food packaging unit at Chiayi Dapumei Precision Machinery Park (嘉義大埔美精密機械園區) late last year, which started operating this year and has been taking orders from other companies, the company said.
The company’s revenue edged up 1.55 percent to NT$2.5 billion (US$80.28 million) in the first five months of the year from NT$2.46 billion a year earlier, but analysts said its Taiwanese business might see sales fall by between 5 and 10 percent annually this year.
About 60 percent of its sales are from monosodium glutamate products, while instant noodles contribute about 18 percent and soy sauce make up 8 percent, company data showed.
Shareholders asked Ve Wong to maintain a high dividend payout policy of about 90 percent, as it did from 2014 to 2016, but the company said it would keep the capital for future investments.
“To stay competitive, we have been putting the majority of our earnings into buying new machines for making soy sauce and instant noodles, automating production, and installing energy-saving air conditioners and air pollution control facilities in recent years,” Ve Wong spokesman Wei Ching-hsiung (魏璟雄) said.
The company said “it will not waste a single dollar from investors” and asked shareholders to be more patient.
Shareholders approved the company’s plan to distribute a cash dividend of NT$1 per share, which translates into a payout ratio of 54.95 percent based on last year’s earnings per share of NT$1.82.
It also represents a dividend yield of 3.76 percent based on the stock’s closing price of NT$26.60 yesterday in Taipei trading.
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