Economic Daily reporter He Xiu Ling/Taipei report/2023/10/18 Nanqiao Chairman Chen Fei Long (left) and Nanqiao Holdings Executive Vice President Chen Zheng Wen (right) discuss the future of the baking market. Reporter He Xiu Ling/Photography
Oils and fats giant Nanqiao (1702) Executive Vice President Chen Zhengwen stated yesterday (17th) that he is optimistic about the high-speed growth period for baking oils and fats in mainland China. This year, the company is "attacking from both sides," having established trading companies in Hong Kong and Singapore to leverage mainland China's tax incentives and export its baking oils and fats to Hong Kong, Macau, and ASEAN markets. Analysts estimate that Nanqiao's revenue could reach NT$30 billion in three years.
This year, Nien-Yen established trading companies in Hong Kong and Singapore with the aim of leveraging China's tax incentives to aggressively target the ASEAN market. The company hopes to export baking ingredients to ASEAN markets such as Malaysia, Indonesia, and Vietnam, where there are tariff advantages.
Regarding the ASEAN market layout, Chen Zheng-wen said that Nanqiao has a factory in Thailand. The Thai market has always been doing very well, and its scale continues to expand. The first phase has been completed, and the main focus of the new production line in the second phase is baby rice crackers, with market demand continuously increasing.
The ASEAN markets outside of Thailand will be managed by a Singaporean trading company, which is slated to become the Southeast Asian operations hub responsible for exporting baking fats and frozen dough. The Hong Kong and Macau markets will be managed by a Hong Kong trading company.
When Chen Zhengwen discussed the mainland baking market, he mentioned that major retail channels in mainland China are integrating their supply chains. This integration applies to both bread and desserts, with the slogan "from a grain of wheat to a loaf of bread." Retailers, in particular, have store channels that enable a complete supply chain for baked goods. For Nan Qiao, as a supplier, this presents both challenges and opportunities.
Chen Zhengwen said that Nanchiao is involved in baking oils and frozen dough in mainland China, with investments in three major regions: Tianjin, Shanghai, and Guangzhou.
The use and consumption of baked goods on the mainland are becoming more diverse, with a wide variety of options from large hypermarkets to small individual businesses like cafes and beverage shops. All of these require baked goods, creating a new business opportunity with intense competition. Nanqiao is confident it can break through.
He gave an example, Namchow has a customer in mainland China that makes Yunnan flower cakes, using edible roses in the cakes. "In 2009, the chairman (Chen Feilong) said we should introduce the concept of Taiwanese souvenir gifts and cultivate it long-term. Once the pandemic lockdown was lifted, tourism and consumption significantly boosted sales." This is precisely because the product has local characteristics and differentiates itself from national hypermarkets.
Nanqiao reported an after-tax net profit of NT$526 million for the first eight months of this year, a year-on-year increase of 34.41%. Earnings per share (EPS) stood at NT$2.12, up from NT$1.58 in the same period last year. Cumulative revenue for the first nine months of this year reached NT$16.8 billion, a year-on-year increase of 12.31%.
