Uni-President chief backs service trade pact with mainland
By Ted Chen ,The China Post
April 5, 2014, 12:09 am TWN
TAIPEI, Taiwan -- In a recent earnings conference, Uni-President Enterprises Co. (統一企業) President Alex Lo (羅智先) expressed an upbeat outlook on the prospect of expanding into the vast China markets while voicing his support for the Cross-Strait Trade in Services Agreement.
The latest earnings call marked Lo's first public appearance with investors since his ascension to his position as conglomerate president, and he used the occasion to voice his support for the Cross-Strait Trade in Services Agreement. According to Lo, such trade agreements often bring an inevitable give and take of terms, and given international precedents, Taiwan stands to gain more good than harm from opening markets.
In addition, Lo stated that Taiwan's strong service industries are well equipped to face heightened competition from Chinese rivals, while urging peers in the sector to bolster their confidence in their abilities.
Lo remarked that the conglomerate's Uni-President China Holdings Limited (統一中控) is poised to establish a formidable presence in the China market in the next decade and see explosive annual growth at 5 to 10 percent. Despite a 9-percent year-on-year revenues gain in China, Lo mentioned that sales growth in the beverage and instant noodles product lines has been hampered by fierce price competition in the region. Lo however stated that against the company's policy of not engaging in price competition, a persistent promotional discount campaign launched to market its instant noodle products in China had managed make tremendous progress toward unseating the hegemonic hold on the market by another Taiwanese rival.
Lo stated that the encouraging development is ahead of the company's internal predictions, while urging competitors to compete in other ways than with lower retail prices.
UPE 2013 Net Income Posts 30-percent Annual Growth
The Uni-President Group recently held a joint earnings conference for its numerous divisions, including the Uni-President Enterprises Co., (UPE, 統一企業) Ton Yi Industrial Co. (統一實業) and Uni-President China Holdings Limited (統一中控), with conglomerate president Alex Lo expressing an upbeat outlook on the prospects of expanding into the Chinese market.
UPE, the bellwether of Taiwan's food industry, reported 2013 revenues of NT$423 billion, with net income reaching NT$12.764 billion, a near 30-percent year-on-year gain, yielding earnings-per-share performance of NT$2.48. The company also announced its policy to pay out 85 percent of earnings, with payouts of cash and share dividend to reached NT$1.5 and NT$0.6 respectively.
Most notably, President Chain Store Co. (統一超商), the operator of the 7-Eleven chain, yielded a net income of NT$8.037 billion last year, contributing NT$3.6 billion in profits to its parent company.
The conglomerate's beverage bottling arm, Ton Yi Industrial Co., last year garnered revenues of NT$33.1 billion, up 18.7 percent year-on-year and earning NT$1.609 billion in operating profits while recording earnings of NT$0.8 per share, vastly exceeding last year's performance of NT$0.16, on account of the tumbling cost of steel materials.
Uni-President China Holdings Limited last year generated revenues of 23.329 billion yuan across the strait, yielding net income of 9.16 billion yuan, up 7.1 percent year-on-year, on account of strong demand in beverages and instant noodles.