Sat, Jun 15, 2002 page18

• Taiwan Tobacco to get corporate makeover

  TRANSFORMATION The government-run Taiwan Tobacco and Wine Board will become a company on June 1 and in three years will undergo a privatization plan

  • By Kevin Chen / STAFF REPORTER
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  The state-controlled Taiwan Tobacco and Wine Board (菸酒公賣局) is scheduled to transform itself into a company on July 1, changing its name to Taiwan Tobacco and Liquor Corp (台灣菸酒公司), board spokesman Wei Yao-hsuan (魏垚萱) told the Taipei Times yesterday.

  With its corporatization, Taiwan Tobacco will not only produce wine, liquor and beer, but also expand its business into recreation and distribution services.

  "The biggest difference for our corporatization is that we will take responsibility of our business turnover, good or bad, and we must work like a real company, with a targeted sales goal," Wei said.

  Before the nation's accession to the WTO earlier this year, Taiwan Tobacco was the only manufacturer of cigarettes and alcoholic drinks in Taiwan. As the private sector is allowed to enter the domestic market after WTO entry, Taiwan Tobacco needs to develop new capabilities to survive.

  Taiwan Tobacco, which recorded average annual revenues of around NT$75 billion over the past four years, has set a goal of NT$80 billion in revenues this year, according to Wei.

  Along with that target are goals of creating new products and improving productivity.

  Wei said the new company is planning to develop more bus-inesses, including producing cigarettes and alcoholic items for other companies on a contract basis, as well as tapping biotech businesses related to fermentation and spice development for its alcoholic products.

  "In a nutshell, we will reshape our management team, redesign incentive systems and introduce new products [to survive in the market]," he said.

  Indeed, according to a proposed scheme drafted by the Council for Economic Planning and Development, Taiwan Tobacco will undergo a privatization plan during the next three years following its corporatization.

  "The privatization work is expected to be completed before July 2005," Wei said, adding that the company is working hard to reduce its workforce.

  "We have cut our workforce from 14,000 to 7,900 over the past three years."

  Minister of Finance Lee Yung-san (李庸三) said yesterday that Chu Cheng-hsiung (朱正雄), Taiwan Tobacco's director general, will serve as acting president for the new entity, while one of the three vice finance ministers will temporarily serve as the company's chairman, until the Cabinet finalizes the selection of qualified candidates.

  Vice Finance Minister Sam Wang (王得山), who was widely speculated by local media to take chairmanship of Taiwan Tobacco during the transition period, said the Executive Yuan will soon recruit the most qualified top executives from the private sector to lead the company. But he didn't specify how long that period of selection would take.

  While employees at Taiwan Tobacco generally felt puzzled over why the government wants to reshuffle the management team at a time when the company is undertaking corporatization and faces tougher competition, Wei said the company needs some fresh bloods to improve management.

  "For almost nine years we haven't recruit one new person here," Wei said. "I think we need to have some new professionals [join the team] or we will look bad," he said.
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