12th July,
2000
Vitasoy takes profit as US becomes
growth engine
Health benefits of soy fuel stronger demand in nearly
all markets
July 12, 2000, Hong Kong - Vitasoy
International Holdings Limited (VIHL)
(SEHK code: 0345) announced a healthy profit growth
of 19.1% for the year to March 31, 2000. Profit attributable
to shareholders stood at HK$126 million, up from HK$106
million the previous year, as total sales rose by 2.7%
to HK$1,885 million.
Basic earnings per share were HK19.4 cents
(1999: HK16.4 cents). The Company's board of directors
has proposed a final dividend of 6.7 cents per share
which, together with the interim dividend of 3.8 cents
per share, would give a total dividend of 10.5 cents
for the whole year (1999: 8.8 cents). The Company also
announced a bonus issue of one for every two shares
held.
Vitasoy International is one of Hong Kong's
leading manufacturers of non-carbonated drinks with
production lines in Hong Kong, Mainland China and the
United States. Its distribution network sprawls across
the world, including Hong Kong, Mainland China, North
America, Australia, New Zealand, Europe, Southeast Asia
as well as Macau and extending to new markets in other
parts of the world.
In announcing the results, VIHL Executive
Chairman Winston Lo Yau-lai described the Company's
growth in the past year as "basically US-led".
"The year under review was challenging,
but rewarding. Challenging because there was stiff competition
in our home market, because of the need for strengthening
our foothold in the Mainland China market, and because
we were embarking on a new manufacturing joint venture
in Australia. However, it was also rewarding because
of the achievement of a major breakthrough in the United
States, " said Mr Lo.
"It is noteworthy that our organic
growth was chiefly attributable to a dramatic turnaround
in sales and profit in our US operation, " he explained.
"The growing popularity of soy products
among US consumers to some extent accounts for the excellent
performance of our USA Group and paves the way for high
and sustainable sales growth in the American market.
"It has become an increasingly popular
trend in the US to include soyfoods in the daily diet
as more and more consumers are now aware of the health
benefits of soy. The fact that the US Food and Drug
Administration has approved health claim labeling on
soy products also complements our promotion efforts.
"All these developments in our favour,
coupled with our aggressive marketing and new product
launch efforts, have contributed to VIHL's profit in
the US market."
Vitasoy International is a leading soyfood
supplier in the US, enjoying a high degree of brand
recognition. Aside from soymilk, the Company's NASOYA
and AZUMAYA brands of tofu are keenly welcomed by customers
in health food sales outlets and mainstream supermarkets,
capturing nearly 50% of the US supermarket segment.
The Company's plant in Ayer, Massachusetts, commenced
production in November 1998 and is now fully operational.
According to Mr Lo, it is the Company's
strategy to leverage on its market leader position and
strong brand name to further increase its presence in
the US.
"The US market will be the Company's
engine for growth in future years," Mr Lo emphasized.
"In view of the vast potential of
the US market, we are working on more aggressive strategic
plans to further consolidate our presence there."
With a view to concentrating on global
expansion, VIHL recently set up in its Hong Kong headquarters
a corporate management office headed by Mr Lo himself
for the purpose of formulating long-term expansion strategies
and overseeing the Company's operating units worldwide.
In line with its strategy of global diversification,
VIHL entered into a joint venture with an indigenous
partner in Australia towards the end of last year to
manufacture, market and distribute soy products. The
Company's UHT (ultra high temperature) soymilk now enjoys
a leading position in the Australian market.
Back in Hong Kong where VIHL is headquartered,
notwithstanding a drop in sales during the past year
due to the prevailing economic conditions, the Company
was able to achieve reasonable profit by actively containing
its costs.
"Hong Kong remains a key market for
Vitasoy International in view of the stable sales and
profit we can derive from it," said Mr Lo.
"It is our policy to leverage on our
strong brand loyalty in this market to expand our distribution
network in order to sustain growth in sales and profit."
The Company has continued to grow its domestic
market by expanding its distribution network and launching
new products. It has recently set up a fully automated
distilled water production line in Tuen Mun with a view
to capturing additional share in the distilled water
market segment in the domestic market.
Describing Mainland China as highly competitive,
Mr Lo was satisfied that the VITASOY brand was becoming
more and more established. In order to tap the low-end
segment of the market, the Company would introduce beverages
in more economical packaging like returnable bottles
and launch a better variety of products.
Looking ahead, Mr Lo believes that VIHL's
growth in future years will be global, driven largely
by the US market and to some extent by the Australian
market. He also anticipates the Hong Kong market to
remain a stable source of revenue for the Company whereas
Mainland China will offer tremendous market potential
to be explored.
Vitasoy International Holdings Limited
is one of the leading manufacturers and distributors
of non-carbonated drinks with a base in Hong Kong. Founded
in 1940 and with production facilities in Hong Kong,
Mainland China and the United States, Vitasoy has successfully
developed and launched more than 120 products in different
forms and sizes that are consumed in over 25 markets
throughout the world.
-- END --
For further information, please contact:
Public Relations Department
Vitasoy International Holdings Ltd.
Tel: 2468 9644 or
E-mail :
pubrel@vitasoy.com
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