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Wei Chuan president says company remains financially sound

2014/10/11 22:54:09

Chang Chiao-hua appologizes

Taipei, Oct. 11 (CNA) Wei Chuan Foods Corp. President Chang Chiao-hua said Saturday that his company remains financially sound despite being implicated in a food scare that has tarnished the company's image and provoked widespread public anger.

Chang said at a press conference that the company had outstanding short-term loans of NT$1.05 billion (US$34.6 million) and long-terms loans of NT$4.32 billion as of the end of September, but it also had NT$250 million in cash and untapped credit lines totaling NT$4.81 billion.

The maturity of the loans and conditions for use of the lines of credit have not been influenced to date by the scandal, and the company will continue to seek bank support, Chang said.

Local governments and consumer groups have launched a campaign to boycott products of the Ting Hsin International Group because of repeated food safety issues over the past year, a boycott likely to hit Wei Chuan the hardest because it is the group's most visible subsidiary.

To win back consumer confidence, the company will establish a research center on food safety and hire experts to ensure better quality control, Chang said.

In addition, he pledged that Wei Chuan would no longer buy ingredients whose origins could not be tracked or use materials that do not come with quality certificates provided by the suppliers, and it will not sell products that do not meet Wei Chuan's own standards.

Chang said that in the future the company intends to concentrate on its core dairy product and beverage businesses and phase out the edible oil and meat floss businesses that have recently come under scrutiny.

It will also consider terminating its export business, Chang said, because overseas sales account for less than 1 percent of the company's total turnover.

Wei Chuan shares fell a combined 12.7 percent in Wednesday and Thursday trading in Taipei after the scandal broke, and the expanding boycott and rumors of banks restricting the company's credit raised concerns over the company's financial stability.

It has been caught in the whirlwind surrounding the Ting Hsin International Group, one of Taiwan's most prominent food companies known for its Master Kong instant noodle brand.

The group is facing an unprecedented crisis over repeated problems with cooking oils.

Already hurt by two oil scandals over the past 11 months, Ting Hsin absorbed another blow earlier this week when subsidiary Cheng I Food Co. was found to have been selling 68 lard-based edible oils containing animal feed oil not meant for human consumption.

Wei Chuan used some of those oils in products marketed under its own brand name.

Wei Chuan itself had to recall several of its oil products in September after finding that they had been partly made from oil recycled from kitchen waste or extracted from industrial grease.

In November 2013, some edible oil products marketed as "pure" by Wei Chuan were found to have been adulterated with low-cost oils.

(By Han Ting-ting and Lee Hsin-Yin)

Related stories:
●Oct. 11: Boycott of Ting Hsin products gains further momentum
●Oct. 10: Food giant facing unprecedented crisis in oil scandal