bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

helpersCheckIsPostiesArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

moreOnThisArticles

urlAlias

commentCount

sponsorType

authorLocations

authors

paywallTypes

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

socialHeadline

headline

flag

firstTopic

glossary

flattenTypeIds

publishedDate

additionalInfoBoxes

images

image

relatedLinks

relatedNewsletters

__typename

createdDate

sponsor

factSheets

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

copyrighted

customTimezone

liveContents

SCMP Reporter

VITASOY International Holdings' is placing high priority on strategy to ensure products are properly distributed, sold and consumed as it launches an aggressive expansion into the mainland soft drink market.

  The company has built a plant in Shenzhen and plans to set up more production facilities in northern areas to supply a distribution network through Guangdong, Shanghai and Beijing.

  The expansion plans spread over the next two years, in what Vitasoy sees as having the potential to make up about 30 per cent of its total drinks market.

  The three key elements in the expansion plans are setting up another large production facility, an advertising campaign, and a reliable distribution network.

  Phase one, the new factory, was completed on July 15, when the Shenzhen Vitasoy (Guang Ming) Foods and Beverage Co plant was opened.

  Vitasoy invested $124.6 million for its 70 per cent share of the plant. The 20-year joint venture also involves Guang Ming farm, which holds the remaining 30 per cent.

  The new facility, which replaces Vitasoy's Aberdeen plant, will supply the Hong Kong and Chinese soy-drink markets.

  The next project will be establishment of a second plant to cater for northern areas of China.

  Vitasoy company secretary John Lau said the firm was exploring opportunities close to Shanghai or Beijing to set up a plant similar to its Shenzhen deal.

  He said no firm decision had been made on a new site or how much the firm planned to spend. It might invest about $150 million in the project.

  ''With the second plant, we will be able to supply the northern and central parts of the country and we are looking at having it open sometime in 1996,'' Mr Lau said.

  He did not rule out the possibility of Vitasoy forming another joint venture for the project, saying the firm would consider all possibilities that were economically viable.

  The company also is planning to spread its advertising campaign to northern areas to promote its products.

  Mr Lau said the Vitasoy name already was popular in southern provinces where residents saw advertisements on Hong Kong television.

  ''We aim to narrow the price gap between our products and any mainland rivals. What we have to offer the mainland market is the better quality of our drinks,'' he said.

  ''We recognise the consumer power of the local population so we need to reduce prices to narrow pricing gaps.''   The company also hopes to set up its own distribution system, allowing more reliable supply of product around the country, and better receipt of payments.

  Vitasoy chairman and managing director Winston Lo said at the opening ceremony of the Shenzhen plant that the joint venture demonstrated the company's long-term commitment to developing the mainland market.

  ''With strengthened capacity in Shenzhen, we are poised to expand our current business in Guangzhou and to develop new business in Shanghai and China,'' he said.

  He predicted the mainland would make up about 30 per cent of the company's total beverage sales in the next three to five years and said Vitasoy was optimistic about its future.

  China's relatively low per-capita consumption level in non-alcoholic beverages pointed further to its tremendous market potential.

  ''With the phenomenal growth in China's economy under reform, and a marked increase in local consumption power, we believe this favourable development will continue in the coming years,'' Mr Lo said.

  The company, founded by Dr K S Lo in the 1940s, has grown into one of the largest manufacturers, producers and distributers of non-carbonated and non-alcoholic drinks in Hong Kong.

  It produces more than a million packs of drinks a day and sells in more than 20 countries, with group turnover of about US$130 million for 1992-93.



Vitasoy sets its mainland priority on delivering the goods