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- Tingyi sees limited growth for instant noodles
Date: 26-Jul-2007 Sources: (Shenzhen Daily)
TOP domestic instant noodle maker, Tingyi (Cayman Islands) Holding Corp., sees limited growth potential for noodles in the near term and will focus instead on beverages, an executive at a major shareholder said Tuesday.
Michael Su, managing director of Taiwan's Ting Hsin International Group, which founded the Hong Kong-listed Tingyi and owns a 33.19 percent stake, expects over the next two to three years to add between 10-20 new production lines across its noodles and beverages sectors per year.
'In terms of noodles, the production that can increase (is) probably not much, most of the investment will focus on beverages,'Su told a media briefing.
Tingyi has a 43.3 percent share of the mainland instant noodle market in terms of value, according to analysts and its own estimates, and 179 production lines for noodles.
The company's ready-to-drink teas have 53.6 percent market share. Drinks accounted for 47 percent of the company's total turnover in 2006 and noodles for 45 percent.
In April, the company said it expected turnover of beverages in 2007 to grow 30 percent and 10 percent for noodles.
Tingyi, which uses the Master Kong brand name, competes with regional and international players across the beverage, noodle and snack categories, including Taiwan's Uni-President Enterprises, Coca-Cola, Nabisco and Wahaha, a partner of France's Danone.
The mainland's instant noodle industry, the world's largest, plans to hike prices for its lowest-priced products by up to 40 percent to cover rising palm oil and flour costs, local media reported Tuesday.
The price hike, after rises last month for higher-priced instant noodles of major brands, such as Tingyi's Master Kong, is aimed at protecting the industry from losses after production costs surpassed sales.
Prices of instant noodles generally sold at 1.5 to 1 yuan (6.6-13.2 U.S. cents) per package will be increased by around 0.2 yuan each July 26, the Beijing Times said, citing industry officials.
Tingyi, which sells instant noodles, beverages, bottled water and crackers, in May posted a 21 percent rise in net profit to US$48.72 million for the first three months.
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