November 4, 2003

Taiwanese Company Making Inroads Into Mainland China's Dairy Products and Fresh Milk Market

Taiwanese-owned Tingyi (Cayman Islands) Holding Corp, the top instant-noodle producer in China well known for its Master Kang brand, is now preparing to make inroads into dairy products and fresh milk market on the mainland, industry sources said Monday. Currently, the "Master Kong" brand instant noodles constitute about 40% of the entire instant noodle market in China.

Tingyi, which acquired more than 50% of Wei Chuan Foods Corp shares in 1998 when the food company was facing a financial crisis, will borrow Weichuan's experiences in both fresh milk processing and marketing distribution know-how to accelerate the new business operation on the mainland, said a Tingyi executive.

Currently, three leading brands of dairy products in China are invested in and operated by domestic Chinese companies. As the quality of their products are no better than substandard varieties, Tingyi hopes to invade into the Chinese dairy market by offering high-quality bottled fresh milk at higher retail prices.

Initially, the Tingyi-bottled fresh milk will be sold in the relatively more affluent eastern China region to sound out the success of the company's marketing strategy.

In the past several years, Tingyi and Weichuan have already cooperated in producing and promoting a fresh and frozen fruit juice called "Daily C" in eastern China.

The companies have planned to make Taiwan the test market for new products and then sell the items with the best potential in China, said Weichuan chairman Wei Ying-chung, who founded Tingyi in northern China 10 years ago, at the company's 50th anniversary ceremony in September.

Wei Chuan is planning to double its annual sales to NT$20 billion over the next five years to become the No. 1 food maker in the Greater China market, Wei said at that time.