Taiwan Salt Co said yesterday that it was considering taking legal action against a biotech company that was established by retired Taisalt employees in China. The Chinese company's beauty products are reportedly very similar to Taisalt's best-selling collagen-rich cosmetics.
Former Taisalt president Wang Chih-hang (王志漢) and other former employees, including the former deputy director of Taisalt's biotech factory, Tsai Chien-kuo (蔡建國), reportedly set up a company in Shanghai early this year.
The company plans to produce collagen-related products, ranging from collagen for medical use to skincare toiletries and health food, which closely resemble Taisalt's product lines, according to a Chinese-language newspaper report.
The report said that Wang's company plans to source the raw materials from US-based BioCore Medical Technologies, which is also Taisalt's supplier.
"We are still looking into the case and trying to determine if Wang used classified company information or illegally used company technology," Taisalt spokesman Lee Tso-yu (李左祐) said yesterday.
Wang cannot be reached for comment.
Wang retired from the company in May last year, when Taisalt was still a state-run enterprise under the Ministry of Economic Affairs.
According to the Civil Servant Service Law (公務人員服務法), public officials are not allowed to hold high-level positions in private companies that have a similar business scope within three years of retirement. Under the same stipulation, the Mainland Affairs Council forbids retired public servants from working in China.
However, because Taisalt completed its privatization in November last year, it is uncertain whether the law can be retroactively applied to the company, said Lin Chih-peng (
To prevent similar incidents in the future, Taisalt now requires its employees to sign a contract which prohibits them from leaking company information after retiring or leaving the company, Taisalt personnel director Huang Ching-ju (
Whether Wang's Chinese investment is legal or not, low production costs apparently place the company in a position to pose a threat to Taisalt.
"We've contacted Wang regarding the matter, and he told us that he would not sell his products in Taiwan, but this forces us to speed up our expansion plan in China," Lee said.
Taisalt plans to introduce its Lu-Miel collagen cosmetics series, which has proven to be over-whelmingly popular among local consumers, in China by the end of the year, Lee said.
Taisalt posted sales of NT$1.97 billion (US$58.4 million) for the first half of the year, a 32 percent jump from the same period last year. Collagen products contributed 30 percent of the total, he said.
Even without competition from a similar company, Taisalt needs to come up with a sophisticated and internationalized marketing strategy to achieve success in the market, said David Silver, director of BiotechEast Co, a Taipei-based public relations and marketing consultancy specializing in the industry.
"I've heard about the company's intention to market its products in other countries, but haven't seen concrete strategies to come with it," Silver said.
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