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Hon Chuan of Taiwan may invest to expand S.E. Asian plants

  • Taipei, May 21, 2012(CENS)


    Taiwan Hon Chuan Enterprise, Co. Ltd, a leading beverage-packaging material maker on the island, plans to invest NT$10 billion (US$333 million) within 10 years to expand manufacturing plants in Southeast Asia to fully tap the market there, said chairman H.C. Dai recently.


    Hon Chuan's sales in Southeast Asia reached NT$1.57 billion (US$ 52.33 million) in 2011, or 11% of the total. Institutional investors estimated that, with the new plants being set up gradually, the firm's annual revenue in Southeast Asia is expected to surge over 40% year on year to NT$ 2.2 billion (US$73.33 million) this year, or up to 13% of Hon Chuan's annual revenue.


    Hon Chuan plans to establish 2-3 new plants yearly in Southeast Asia and has 8 plants across Thailand, Vietnam, Indonesia and Malaysia, also planning to set up plants in Myanmar, the Philippines, Pakistan, Cambodia and Laos.


    The institutional investors predicted that the company's annual revenue will grow at an annual rate of 40%-50% based on the project of new plants in Southeast Asia. Such a growth rate is better than the firm's 20%-30% sales increase in China and Taiwan's 5%-10%. The company's annual revenue in Southeast Asia is expected to hit a high of NT$10 billion (US$333 million) within five years, overtaking that of Taiwan, with the revenue of the Hon Chuan group likely to reach around NT$30-34 billion (US$1 billion-US$ 1.13 billion).


    In the first four months of 2012, Hon Chuan's sales revenue in Southeast Asia shot up 47% from the same period of last year to NT$804 million (US$ 26.8 million), with revenue in April alone surging an annual 129% to NT$ 285 million (US$ 9.5 million), to which the company attributes influx of orders after the start-up of its new plant in Vietnam and the completion of capacity expansion at its Thai plant.


    With the peak season coming and start-up of the new factory, institutional investors said that the company's profits this year may be 20% higher than last year's.


    Chairman Dai stressed that the Chinese market is huge but competition fierce and attracting global makers. So the company should focus more on Southeast Asia where the population is also high, with ample demand for beverages in mostly tropical climates, coupled with rising disposable income.


    (by Annie Chen)