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SHANGHAI: Although a latecomer to the mainland market, Taiwan drinks giant Hey Song believes there is no time like the present to start tackling the competition.
In mid-April, the company will start building its 400 million yuan (US$48 million) factory in Jiangsu Province's Suzhou. Hey Song's top executives say it is prepared to take three years to break even on the mainland.
"Our competitors got the jump on us, so we've got to be 10 times quicker than them in terms of occupying the market," said Fred Chang, managing director of Hey Song (Suzhou) Co Ltd, which was set up on the mainland in 2002.
Analysts say the stance shows that Hey Song - one of Taiwan's biggest drinks manufacturers - has a lot of faith in the mainland market which, despite growing competition, will probably turn into its strongest market in the future.
According to Chang, Hey Song's wholly-owned Suzhou subsidiary will have two production lines, each with an output capacity of 600 bottles per minute, in a 26,000-square-metre workshop.
The lines will turn out more than 20 types of products, ranging from fruit juice drinks to tea drinks. They will also produce Hey Song's primary product, Sarsaparilla, a carbonated drink.
As one of the most popular carbonated drinks in Taiwan, Sarsaparilla has a history of more than 50 years and is regarded as a successful example of a homemade drink taking on foreign giants like Coca-Cola and Pepsi-Cola.
While Hey Song is ready to put another production line into operation whenever it is needed, two more lines are in the company's blueprint for the second-phase of construction at Suzhou. It is estimated to cost more than 300 million yuan (US$36 million).
"If the five lines are completed, we will hopefully be an influential brand on the domestic market," said Chang.
Chang said Hey Song will cash in on its operating experience in Taiwan to ensure its mainland business runs smoothly.
In Taiwan, the company is famous for its marketing campaigns that involve music, as it always unveils young singers to promote its brand.
Hey Song expects to reach a sales volume of 200 million yuan (US$24 million) this year, a big part of which will be poured into further advertising and promotion.
"Good short-term sales figures are not our primary target, we want to stress a sustainable capability," said Victor Chang, marketing director of Hey Song's Suzhou operation.
Fred Chang said: "Our focus will be quickly turning Hey Song into a famous brand on the mainland. To achieve that goal, I'd rather take early losses and view it as a kind of investment."


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