President Joins Hands With NissinHualong to Tap China's Beverage Market

Taipei, Dec. 13, 2005 (CENS)--President Enterprises has beaten other foreign rivals to acquire a 33.3% stake in Jinmailang Beverage Co., a newly established subsidiary of NissinHualong Food, becoming the major partner of the NissinHualong for tapping China's huge beverage market.

A sharp contrast to their rivalry in China's instant-noodle market, the new cooperative link between President and NissinHualong has sent shock waves through the foodstuff market.

President spent 300 million yuan for its shareholding in Jinmailang. As the company's mainland investments have reached the ceiling set by the authorities in Taiwan, it sold out its 40% shareholding in Zhuhai Kirin Beer for US$40.5 million to finance the investment.

The Jinmailang Beverage boasts a paid-up capital of over 700 million yuan initially, with NissinHualong holding 33.4% of shares and President 33.3%. Executives of the company from Taiwan and China are permitted to own 33.3% of the company's shares. After its operation reaches a certain level, the company reportedly will solicit new investment partners to expand its capital.

Jinmailang plans to roll out fruit juice, tea, and bottled water initially, which are scheduled to hit the market in the first half next year. The projected sites for its factories are located in Longyao and Shunyi of Hebei province, which are slated for completion by the end of next year. Before that, it will outsource its production. The revenue target next year is set at 1 billion yuan and 20 beverage production lines will be in place by 2010. It aims to boost its revenue to 10 billion yuan by 2015.

Since the beverage and instant-noodle markets feature different busy seasons but similar sales channels, the entry of Jinmailang into the beverage market can fully utilize the existing sales channels of its two major shareholders. In addition to the existing 5,000 salesmen of NissinHualong, Jinmailang will recruit 1,000 new salesmen in southern China to tap the rural markets in the region.

Of the three largest instant-noodle companies in China, both Master Kong and President have also stepped into the beverage market. Focusing on the sales of low-price instant noodles, NissinHualong has overtaken President to become the second largest instant-noodle marker in China. The gap of their market shares is less than two percentage points.

The long-standing experience and R&D strength of President in beverage production will give NissinHualong a strong support in its venture into China's beverage market.