Investment Opportunities in the
Food Industry in Taiwan
I. Introduction
Food is essential to our daily lives. After decades of development, the food
industry in Taiwan has transformed from one covering only basic food
processing operations and an export oriented secondary industry focused on
supporting other industries and agriculture policies to a modern industry aiming
to satisfy food demands in the domestic markets and raising the quality of life for
all residents in Taiwan. In recent years, consumers have placed a greater
emphasis on healthcare enhancement and convenience that food will bring to our
life and hence, the food industry has also changed its development goals to
provide quality health and convenient food to satisfy the domestic demands of
dietary health. As cross strait exchanges have increased by the day, qualit ies of
food made in Taiwan (MIT) are gradually accepted and preferred by consumers
in the Chinese market, the food industry in Taiwan also starts their development
in China. This will undoubtedly expand market territories for the food industry.
The excessive population growth has increased the demand for food, and China,
facing the crisis of population over-growth, will sooner or later be plagued by the
issues of food supply. This is a great opportunity for Taiwan which is a country
that shares similar dietary cultures and is in close proximity to China. Therefore,
investing in Taiwan now not only means direct access to the China market, but
also preparation for the next wave of foreseeable growth.
II. Investment Opportunities in the Food Industry in
1
Taiwan
Top 10 reasons to invest in the food industry in Taiwan
(1) The food industry in Taiwan has solid technology strengths and possesses
superior management ability
(2) The food related education is universal in Taiwan, abundant supplies and
high quality talents in the field of technologies and management are also
available
(3) High availability of related industries such as food processing machinery,
packaging and distribution industries
(4) The size of the domestic market exceeds NTD$1 trillion and demands for
high quality food are on the rise
(5) The industrial supply chain is very flexible and can collaborate based on
different requirements: task division by specialization, flexible collaboration
between large and small enterprises, OEM, small batch with high diversity or
mass product production is possible
(6) Diverse dietary cultures in Taiwan, making it an ideal choice to develop
different cuisines and conduct product sampling before distributing products
worldwide
(7) The food industry in Taiwan has started their deployment effort in China.
With investment in Taiwan, foreign enterprises can maximize their returns by
capitalizing on the China networks developed by Taiwan companies
(8) The Taiwan government and private enterprises are aggressively expandin g
international markets with food as the cultural carriers and capital is available
and continuously infused into the food industry
(9) The market demands in China are enormous and are still growing along with
rising production costs and prices. Food products produced in Taiwan are
stable in terms of cost and quality, and if they are exported to China to fill the
market demands, then sizeable profits are expected.
(10) Competitive and complementary relationships exist between food industries
2
in Taiwan and China. The upstream and downstream value chains are fairly
complete and foreign enterprises can capitalize on these relationships and
cross-strait exchanges to gain bargaining chips for their business operations.
III. Introduction of Major Manufacturers in the Food
Industry in Taiwan
In terms of size of operations, Taiwan Tobacco & Liquor Corp,
Uni-President and Taiwan Sugar Corp are the top three in the industry. As the
largest one, Taiwan Tobacco & Liquor Corp achieved a net profit ratio of 12 %.
As its name implies, Taiwan Tobacco & Liquor Corp supplies addictive
products – tobacco and liquor as its primary products and it has entered the field
of biotech and health food and product distribution. The sales territory covers the
US, Japan and China. Taiwan Tobacco & Liquor Corp has in-house professional
RD teams behind all its major products and possesses competitive advantages
over national boundaries. The second largest manufacturer is Uni-President. As a
publicly listed company, Uni-President is a regular champion in corporate
revenue in the entire industry. Its net profit ratio even exceeded 26.48% in 2012,
and its scopes of products cover all fields in the food industry. Uni-President also
extends its operations in other related fields in addition to its core business,
establishes compete support networks and enters into strategic and outsourcing
partnership to enhance operational efficiency and establish a complete industrial
value chain covering from the upstream to the downstream. Uni-President also
invests in its operations in China, Thailand, Indonesia and Vietnam and has
development potential found in international brands. Following Uni-President is
Taiwan Sugar Corp., or the third largest manufacturer in the industry. Taiwan
Sugar Corp owns large land resources, controls agricultural breeding and
production technologies. For the fields of sugar, swine breeding and orchids,
Taiwan Sugar Corp has established complete RD, production and marketing
systems. It holds a dominant position in the fields of several core technologies
3
and its businesses range from livestock breeding, organic produce, sugar, cooking
oil, wholesale, merchandise marketing and biotech and healthcare. (please refer to
Table 1)
Table 1 Introduction of Major Manufacturers in the Food Industry in Taiwan
2012 2011 2010
Revenue Revenue Revenue
Net profit Net profit Net profit
(in NTD$1 (in NTD$1 (in NTD$1
ratio (%) ratio (%) ratio (%)
million) million) million)
Taiwan Tobacco &
81,066 12 64,436 12.30 57,293 15.15
Liq uor Corporation
Uni-President 46,852 26.48 51,829 18.22 48,962 22.32
Taiwan Sugar Corp 40,681 11.98 41,606 12.63 32,769 33.15
Dachan 23,612 3.11 23,083 4.64 21,033 5.13
Datongy 17,530 2.53 16,631 3.52 15,629 4.28
Charoen Pokphand
15,186 2.03 15,063 0.90 14,039 2.45
Enterprise
Wei Chuan 15,091 5.01 13,833 4.95 13,237 12.32
Standard Food 12,163 18.4 12,544 19.59 11,423 18.65
Fwuso w Industr y 10,275 -0.56 10,219 5.39 9,002 2.52
Fopco 10,895 0.36 9,818 0.43 8,453 2.12
Taisun Enterprise 8,331 -2.52 7,754 2.58 7,274 3.27
Central Unio n Oil
7,949 0.83 6,940 0.90 6,332 0.93
Corp
Lianhwa Foods
5,296 6.93 5,320 6.73 4,433 6.89
Corp
HeySong 5,659 143.37 5,416 7.24 4,414 7.49
A.G.V. Products
3,504 1.46 3,312 0.34 3,620 4.9
Corp
HSIN TUNG
3,430 0.35 3,260 3.89 3,372 3.46
YANG Corp
Lianhwa Foods
3,937 40.03 4,085 37.42 3,288 60.37
Corp
Tairoun 3,132 4.58 3,116 4.61 2,776 4.04
TAIYEN CO. INC 2,291 3.41 2,296 8.44 2,151 8.43
Grape King Inc. 2,885 21.45 2,401 19.69 2,143 20.17
Hunya Foods 2,685 6.23 2,480 7.27 2,069 7
4
2012 2011 2010
Revenue Revenue Revenue
Net profit Net profit Net profit
(in NTD$1 (in NTD$1 (in NTD$1
ratio (%) ratio (%) ratio (%)
million) million) million)
Namcho w 2,348 19 2,333 14.91 2,016 25.68
VE WONG CORP 1,939 5.17 1,963 2.10 1,936 5.96
TenRen 2,056 10.03 2,040 11.48 1,870 11.22
Chang Cuann 1,555 5.33 1,612 3.92 1,407 6.24
Taiwan Fructose 1,509 13.32 1,417 2.61 1,380 4.53
Herngyih 1,209 11.19 1,150 10.53 1,185 13.2
Source: Market Observation Post System, Food Industry Research and Development Institute
IV. Competitiveness of the Food Industry in Taiwan
(I) Status of the food industry in Taiwan and its development trends
Over the years, industrial size has remained around 5,000 to 6,000
companies and by the end of 2012, the number had reached 5,235, the employed
population in the industry grew to 132,000 and the average work hours and
average monthly salary per employee has not changed much since previous years,
indicating that the industry remains relatively stable. As for the size distribution,
99% of the manufacturers are small to medium enterprises (SMEs) and largest
enterprises will tend to lead new developments in the industry.
According to the Department of Statistics, Ministry of Economic Affairs,
the 2013 industrial production of the food industry reached NTD$594.4 billion.
The food industry is one of important industries in Taiwan and is constantly
ranked among the top 10 industries in Taiwan. It is forecasted that the industrial
production will continue to grow.
(II) Wide industrial breath for all investment types
Among 22 sectors in the food industry in Taiwan, the top seven sectors are:
Prepared Animal Feeds Manufacturing (industrial production: NTD$81.4 billions,
5
14.2% industrial total); Slaughtering (industrial production: NTD$66.6 billions,
11.2% industrial total);Other Food Manufacturing (industrial production:
NTD$64.7 billions, 10.9% industrial total ); Non-Alcoholic Beverages
Manufacturing (industrial production: NTD$52 billions, 8.8% industrial total);
Grain Mill Products and Starches and Starch Products Manufacturing (industrial
production: NTD$40.5 billions, 6.8% industrial total); Grain Husking
Manufacturing (industrial production: NTD$31.5 billions, 5.3% industrial total.);
and Manufacture of Dairy Products (industrial production: NTD$30.3 billions,
5.1% industrial total.) The main material sources are produces and other material
related industrials (please refer to Table 2) and include deep processing
industries such as dairy products manufacturing industries. As for the industrial
growth, they vary from year to year, and the price inflation for bulk feed
ingredients in the last three years also causes both product prices and industrial
production to rise.
Table 2 Industrial Production of the Food Industry in Taiwan
(Broken down by Sectors)
Unit: NTD millions
2009 2010 2011 2012 2013
Slaughtering 53,789 58,443 61,300 65,927 66,581
Manufacture of Frozen Meat 20,559 21,104 24,600 25,967 26,016
Manufacture of Meat
5,056 5,399 5,600 5,663 5,850
Products
Manufacture of Frozen Fish,
5,488 6,934 7,200 7,059 6,668
Crustaceans and Molluscs
Manufacture of Frozen Fruit
2,011 2,707 2,600 3,064 3,022
and Vegetables
Manufacture of Fruit and
3,529 3,892 3,800 3,450 4,398
Vegetables Products
Manufacture of Edible Oils
24,678 27,963 30,600 28,852 26,181
and Fats
Manufacture of Dairy
24,091 26,645 27,000 28,259 30,335
Products
Grain Husking 36,566 28,368 33,800 35,875 31,526
Manufacture of Grain Mill 37,262 38,043 39,900 38,647 40,465
6
2009 2010 2011 2012 2013
Products
Manufacture of Prepared
73,587 76,900 85,200 85,698 84,141
Animal Feeds
Manufacture of Bakery
22,056 23,618 23,900 24,528 23,367
Products
Manufacture of Macaroni,
Noodles, Couscous and
12,799 13,436 14,400 14,779 13,689
Similar Farinaceous
Products
Manufacture of Sugar 6,875 9,691 9,600 8,218 7,168
Manufacture of Cocoa,
Chocolate and Sugar 5,125 6,102 6,300 7,280 6,899
Confectionery
Manufacture of Tea 4,273 4,636 4,800 7,323 6,904
Manufacture of Seasoning 16,410 18,267 17,600 16,833 17,900
Manufacture of Prepared
23,909 24,878 25,500 27,652 26,339
Meals and Dishes
Manufacture of Other Food
Products Not Elsewhere 55,968 66,342 71,200 63,361 64,717
Classified
Manufacture of Beer 25,755 24,555 23,900 25,994 23,592
Manufacture of Other
10,217 9,909 10,200 26,430 26,580
Alcoholic Beverages
Manufacture of
46,480 49,333 51,200 51,291 52,037
Non-alcoholic Beverages
Total 556,950 593,958 630,400 602,149 594,373
Source: April 2014 Statistics by Food Industry Research and Development Institute
The fastest growing sector in 2013 is Manufacture of Fruit and Vegetables
Products, Manufacture of Dairy Products and Manufacture of Seasoning, the
growth rates are 27.50%, 7.35% and 6.34% respectively. In the order of their
growth rate, are: Manufacture of Grain Mill Products, Manufacture of Meat
Products, Manufacture of Other Food Products Not Elsewhere Classified,
Manufacture of Non-alcoholic Beverages, Slaughtering, Manufacture of Other
Alcoholic Beverages, Manufacture of Frozen Meat, Manufacture of Frozen Fruit
and Vegetables, Manufacture of Prepared Animal Feeds, Manufacture of Bakery
7
Products, Manufacture of Prepared Meals and Dishes, Manufacture of Cocoa,
Chocolate and Sugar Confectionery, Manufacture of Frozen Fish, Crustaceans
and Molluscs, Manufacture of Tea, Manufacture of Macaroni, Noodles, Couscous
and Similar Farinaceous Products, Manufacture of Beer, Grain Husking, and
Manufacture of Sugar,
Table 3 2013 Export of the Food Industry in Taiwan
Unit: kg, NTD$1,000
Export Export Export Export
(kg) (NTD$1,000) Growth Rate Growth Rate
Slaughtered meat 56,501 2,475 -71.87% -71.45%
Dairy Food 14,336,302 1,562,265 52.00% 63.90%
Canned Food 8,770,338 1,011,355 9.03% 12.03%
Frozen Food 594,903,244 39,197,395 -6.00% -15.98%
Dehydrated food 15,721,917 1,549,775 19.76% 4.94%
Preserved Food 13,179,550 2,023,784 6.03% 5.79%
Grain and Bakery
Food 12,422,403 1,671,218 8.73% 18.08%
Sugar
Confectionery and 6,642,416 1,148,437 26.42% 25.91%
Chocolate
Cocoa Products 390,181 60,547 20.81% 37.84%
Coffee and
Substitutes 15,607,830 710,236 -11.25% -4.21%
Animal and
Vegetable Fats and 53,433,805 2,756,311 35.30% 16.32%
Oils
Grain Husking
products 45,985,172 1,772,359 13.17% 11.51%
Sugar
Confectionery and 11,248,844 493,279 30.73% 21.76%
molasses
Condiment 41,640,440 2,124,579 -37.80% -38.66%
Alcoholic
Beverages 11,741,151 1,399,145 3.97% -7.74%
None Alcoholic
Beverages 224,591,986 5,860,089 7.64% 3.51%
Feed 56,065,214 2,655,974 -9.46% -5.17%
Tea 4,828,714 1,363,531 13.84% 11.42%
Other Food Products 136,302,791 14,755,507 12.78% 10.98%
8
Export Export Export Export
(kg) (NTD$1,000) Growth Rate Growth Rate
Tobacco 4,640,485 2,196,786 3.24% 3.69%
Residues and waste 150,568,391 433,630 -30.70% -26.48%
Refrigerated Food 77,632 26,909 -10.47% 2.52%
Total 1,423,155,307 84,775,584 -4.82% -5.89%
Source:April 2014 Statistics from Food Industry Database by FIRDI
The total export value in 2013 is NT$82.6 billion, 6.09% decline in
comparison to 2012, because the major export sector, Frozen Food, has declined
15.99% this year, and export value of condiment decreases NT$1.3 billion. But
other sectors maintain a strong export growth, for example Dairy Food, Canned
Food, Grain and Bakery Food, Sugar Confectionery and Chocolate, Cocoa
Products, Animal and Vegetable Fats and Oils, Grain Husking products, Sugar
Confectionery and molasses, Tea, and Other Food Products all enjoy a double
digit export growth. Taiwan’s export structure has changed since 2013. Though
Frozen Food remains to be the most important export product, its export share
has declined from 53% of total food export in 2012 to 47%. Other products like
None Alcoholic Beverages, Animal and Vegetable Fats and Oils, Preserved Food,
and Other Food Products are taking up more shares.
Table 4 2013 Import of the Food Industry in Taiwan
Import Import
Import Import
Volume Value
Volume Value
Growth Growth
(kg) (NTD$1,000)
Rate Rate
Slaughtered meat 25,394,769 5,947,759 37.73% 48.00%
Dairy Food 159,088,113 19,452,562 5.23% 18.35%
Canned Food 43,592,963 1,997,758 -3.09% -3.45%
Frozen Food 543,964,588 41,101,241 -8.80% -0.13%
Dehydrated food 123,642,154 7,636,928 3.27% 6.89%
Preserved Food 66,137,451 3,362,219 -1.17% 4.47%
Grain and Bakery
20,402,991 2,155,646 10.16% 13.54%
Food
Sugar Confectionery
18,401,671 3,084,611 0.38% -0.55%
and Chocolate
Cocoa Products 6,047,742 738,480 14.05% -3.51%
9
Import Import
Import Import
Volume Value
Volume Value
Growth Growth
(kg) (NTD$1,000)
Rate Rate
Coffee and
30,874,885 4,765,470 15.61% 1.48%
Substitutes
Animal and vegetable
328,158,692 10,503,322 -1.51% -10.71%
fats and oils
Grain Husking
570,607,746 9,903,988 -9.35% -5.35%
products
Sugar Confectionery
629,294,347 8,346,993 -24.93% -27.61%
and molasses
Condiment 43,945,583 2,947,475 -6.17% -8.87%
Alcoholic Beverages 190,520,046 23,031,732 1.38% 6.51%
None Alcoholic
74,145,638 3,043,938 6.76% 11.94%
Beverages
Feed 348,556,714 8,609,843 -2.69% 2.52%
Tea 31,529,617 2,045,808 0.50% 5.98%
Other Food Products 284,260,114 20,641,764 -18.50% 3.25%
Tobacco 19,644,481 16,582,173 3.19% 3.13%
Residues and waste 777,379,775 12,124,606 -3.24% -4.34%
Refrigerated Food 354,871 103,286 -46.16% -20.41%
Total 4,335,944,951 208,127,601 -8.39% 1.50%
Source:April 2014 Statistics from Food Industry Database by FIRDI
The overall import value reached NT$191.5 billion, which is 1.35% growth
from 2012. The major import growth is driven from Slaughtered meat, Dairy
Food, Grain and Bakery Food, Animal and Vegetable Fats and Oils, and None
Alcoholic Beverages sectors, which grows more than 10% last year. On the other
hand, import of Sugar Confectionery and Molasses sector declines the most,
27.61%.
Nevertheless, some sectors experienced both import and export growth in
2013. For instance, Dairy Food (export increases 64% and import increase 18%)
and Grain and Bakery Food (export increases 18% and import increases 14%),
which suggest that Taiwan food products have great potential in global market if
we can effectively improve their competitiveness, attractiveness and visibility.
10
(III) Major Exporting Countries for the Food Industry in Taiwan
In 2013, the major export countries and regions for the food industry are
listed below. The largest exporting country is Japan, which is then followed by
China, USA, Hong Kong, Thailand, Korea and Vietnam, and the export from
these countries combined is over 70% of the entire industrial export. (Please refer
to Table 5)
Table 5 2013 Top 12 Exporting Countries for Food Industry in Taiwan
Unit: NTD$100 millions
Export
Rank Country % Total Export
(NTD$100 millions)
1 Japan 222.58 18.63
2 China 200.56 16.78
3 USA 131.66 11.02
4 Hong Kong 101.59 8.50
5 Thailand 100.36 8.40
6 Korea 55.10 4.61
7 Vietnam 50.10 4.19
8 Indonesia 38.76 3.24
9 Malaysia 34.05 2.85
10 Philippines 28.21 2.36
11 Australia 26.53 2.22
12 Singapore 25.34 2.12
Other Other 180.19 15.08
Total Total 1,195.04 100.00
Source: Statistic of Customs Administration, Ministry of Finance (2014.04):
(IV) Major Importing Countries for the Food Industry in Taiwan
In terms of importing regions, the US is the number one importing source,
then followed by China, New Zealand, Australia, Japan, France and UK, and the
exports from these countries combined are about 60% of the entire industrial
export. (please refer to Table 6)
Table 6 2013 Top 12 Importing Countries for Food Industry in Taiwan
11
Import
Rank Country % Total Import
(NTD$100 millions)
1 USA 462.35 21.41
2 China 173.25 8.02
3 New Zealand 163.77 7.58
4 Australia 149.12 6.91
5 Japan 130.63 6.05
6 France 105.65 4.89
7 UK 104.50 4.84
8 Malaysia 76.29 3.53
9 Thailand 74.76 3.46
10 Netherlands 67.36 3.12
11 Vietnam 62.30 2.89
12 Canada 59.05 2.73
Other Other 530 24.56
Total Total 2,159.33 100.00
Source: Statistic of Customs Administration, Ministry of Finance (2014.04)
12
