Hey Song taps into China
into the ever-growing China market, having announced that it is to
make a significant investment to build a production facility in the
south of the country.
The company has confirmed that in mid-April it will instigate ground-breaking on a massive yuan 400 million (€39.4m) production facility near the city of Suzhou in the province of Jiangsu.
Hey Song is proving to be a late-comer to the increasingly developed China drinks market, but the company says that despite the timing it is undaunted and that it believes now is a good time, a report in the China Daily said.
Hey Song set up business on the mainland in 2002, several years behind many of the leading competitors. Entry into the China market traditionally takes some time to formalize and it is only now that the company is seeing significant inroads for its ambitions to expand aggressively.
"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.
However, many analysts believe that the company will struggle to meet this ambition as the market for soft drinks there is increasingly showing signs of both maturity and saturation. The world's two leading soft drinks manufacturers - Coca-Cola and Pepsi - are both well established in the market. Now the biggest market players are trying to preserve their established market shares through more innovative packaging, pricing promotions and introduction innovative production methods in an attempt to improve margins.
As well as the established global giants, Hey Song will also be up against a host of other players - both domestic and international - who have also joined the market relatively recently. Those players include names such as Wahaha (Danone), Robust, Xurisheng, Fenhuang, Coconut Palm, Lulu and Dole.
However, despite all the growing competition, Hey Song says that it foresees the China market becoming its leading market outside of Taiwan. This ambition is matched by the size of the Suzhou production facility which, according to the company, will have two production lines, each with a capacity for 600 bottles a minute, in the 26,000 square metre work area. The space also exists for a third line if demand grows quickly. The company is aiming to concentrate on the manufacturing of its Sarsaparilla drink, which is currently a market leader in Taiwan.
"If the five lines are completed, we will hopefully be an influential brand on the domestic market," said Chang.
