Taiwanese billionaire plans to expand his family company

Taiwanese billionaire Wei Ing-chou, whose “Master Kong” brand is the world’s largest producer of instant noodles, plans to buy mainland Chinese food companies and expand the real estate holdings of his Tingyi (Cayman Islands) Holding Corp. before retiring in four years,

Bloomberg reported.

Wei plans to leave the company in four years when he turns 60, aiming to ease investor concerns about management succession at the family-controlled company.

Wei did not identify successor candidates, the report said. The eldest of his three sons, Wei Hong-ming, is a manager in the company; his third son, Wei Hong-chen, is an assistant manager.

Albert King of Prophet Capital Inc. in Tapei told Bloomberg, “[T]his is a family business. We have to observe if the chairman still wields influence after stepping down.”

Wei’s parents founded Tingyi as an oil and grease company in 1958. In the early 1990s, he began to transform it into Taiwan’s biggest maker of packaged foods. Tingyi sold $2.2 billion of instant noodles in 2008, according to the report. It began producing beverages in 1996.

Ting Hsin International Group, Tingyi’s biggest shareholder with a 36.6 percent stake at the end of 2008, is controlled by Wei Ing-chou and his three younger brothers.

The company’s Hong Kong-traded stock has more than doubled in 2009, compared with a 52 percent gain for the benchmark Hang Seng Index.

About half the money raised from the sale of Tingyi [Taiwan depository receipts] will help Wei Chuan Food Corp. — an affiliated producer of condensed milk, milk powder, canned food and drinks — add facilities in China and Taiwan, Wei said. The remainder will be used for Ting Hsin’s real estate business, he said.

Prophet Capital’s King cautioned that Tingyi’s “expertise is in the food business and it has little experience in buying companies.” (Source: Bloomberg, Dec. 15, 2009.)