October 18, 2023 / Commercial Times / Shih Lien Group Chairman Chen Feilong (center) announced on the 17th that his son Chen Zhengwen (right) will compete for the directorship of the Taipei Industrial Association. Next to him is Shih Lien Group President Li Kanwen. Photo/Li Liman
Namchow Group Chairman Chen Fei-lung stated on the 17th that Namchow is deeply cultivating the Southeast Asian market with Thailand as its core. The second phase of the new plant in Thailand is expected to be operational in the latter half of 2024. In addition to supplying rice-based snacks, noodle products will also be upgraded. Coupled with the new plant's automation, production capacity will be significantly increased.
Corporate estimates, with the boost from Thailand's growth curve, suggest that Nan Pao's consolidated revenue is expected to reach the NT$30 billion mark within three years. With plans to invest in the third phase of its new plant in Thailand, Nan Pao does not rule out the possibility of spinning off Nan Pao Thailand for a local listing.
Nien Y. Chen, Executive Vice President of the Nanqiao Group, analyzed that the mainland Chinese baking market is flourishing post-pandemic, but competition within the supply side is also fierce. The frozen and refrigerated dough market, in particular, is undergoing significant changes. Competitors in the baking industry are no longer limited to industry peers; the biggest competitors now are large retailers. In mainland China, this includes supermarkets like Hema Fresh, and in Taiwan, it includes the leading supermarket chain PX Mart, all of which are actively expanding their private-label baked goods. "This is both a challenge and an opportunity for suppliers!" he said. Currently, the traditional bread industry accounts for 40% of the mainland Chinese baking market, hypermarkets account for 20%, and the rest is from online e-commerce and convenience stores.
Regarding the Southeast Asian market, it is considered a new blue ocean for Nan Chiao's operations. In addition to directly operating in Thailand as a base market, Nan Chiao is further planning to develop trade in surrounding countries. Through distributors and agents, products from the Thailand plant will be sold to countries such as Singapore, Myanmar, Malaysia, Indonesia, and Vietnam, targeting local chain retail channels and the catering industry. In the future, as the market expands and demand grows, Nan Chiao plans to invest in the third phase of its Thailand plant.
Chen Zhengwen stated that in addition to supplying semi-finished products such as frozen and refrigerated dough, Nanqiao's official websites in mainland China, including Dulaoye Kitchen and Tmall flagship store, also offer products like food ingredient kits. This strategy differentiates them from hypermarket operations and may be replicated in Southeast Asian markets in the future.
Regarding the cross-strait market, Chen Zhengwen pointed out that Taiwan enters its traditional peak season in the fourth quarter, while mainland China's catering industry is seeing a shift in development post-pandemic. Overall, the processing of semi-finished products is in short supply, and he is optimistic that cross-strait operations in 2023 will be better than in 2022. Institutional investors estimate that Nan Chiao's overall revenue in 2023 is expected to approach NT$25 billion. In 2024, new production lines will be added in Taiwan, mainland China, and ASEAN. The goal is to achieve consolidated revenue of NT$30 billion within three years.
Nanqiao's consolidated revenue for the first nine months of 2023 reached NT$16.809 billion, a 12.34% increase year-on-year. The fourth quarter is traditionally a peak season, and there's a chance it could drive full-year revenue to NT$25 billion. Chen Zhengwen stated that in addition to the new factory in Chongqing, a second frozen noodle production line is being planned in Shanghai, possibly located in Guangzhou. After China's reopening, the catering industry experienced a surge in performance. Nanqiao's new Chongqing factory is expected to commence production in 2024, and the second phase of the new factory in Thailand will also begin production in the second half of 2024. The company is optimistic about its overall operations in 2024.
