Tingyi, the Chinese company behind the leading Master Kong noodle brand, is investing in the latest processing technology from Europe to grow an efficient beverage business that is threatening the market share of its competitors.

The Hong Kong-listed company best known for its noodles has been making beverages for several years but its sales have gained so much momentum in the last year that they have overtaken those of its core noodle business. Turnover from beverages reached US$918 million for the first nine months of 2006, up by 55.8 per cent on the prior year, and well past the $754 million from noodles.

Tingyi, which claims to have pioneered the ready-to-drink tea category in China, leads this market with a 50 per cent share, thanks to use of the Master Kong brand, already well-known by consumers of its noodles. It plans to add a further 16 production lines for juices and tea next year. But its efficient production technology has also allowed it to create a profitable bottled water business.

In water, it is still behind beverage leader Wahaha but has increased its volume share from 6 per cent this time last year to 12.4 per cent to become the number two, according to AC Nielsen data.

The company had previously entered the bottled water business in 1997 but high machinery costs meant it soon exited the business that came to be dominated by Wahaha. However experience with European machinery has now given it an edge in this low-margin product, which it started producing again last year.

Chinese beverage makers have been hit by the rising cost for PET, the plastic increasingly preferred to bottle drinks. Tingyi says it was 10 per cent higher in this year's third quarter compared with the previous year's same period. It is now planning to add a further 27 bottled water production lines in 2007.

Source:佚名