[Intl-tobacco] Taiwan Tobacco head to review privatization mechanism

Sat, 02 Jul 2005 18:34:05 -0400

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Published on TaipeiTimes <http://www.taipeitimes.com>
http://www.taipeitimes.com/News/biz/archives/2005/07/02/2003261920

New TTL head to review privatization mechanism

By Jackie Lin
STAFF REPORTER
Saturday, Jul 02, 2005,Page 10

Stressing that privatization of state-run enterprises is an
international trend, Ray Dawn (=E8=91=A3=E7=91=9E=E6=96=8C), the new helmsm=
an of Taiwan
Tobacco & Liquor Corp (TTL, =E5=8F=B0=E7=81=A3=E8=8F=B8=E9=85=92=E5=85=AC=
=E5=8F=B8), said yesterday that he will
soon review and improve TTL's privatization scheme to seek consensus
from both the government and employees.

"I don't think the government should run any business. The state should
exit from the market so that [state-owned] companies can better compete
with their private rivals," he said at a ceremony during which he took
over leadership of the company from Morgan Hwang (=E9=BB=83=E7=87=9F=E6=9D=
=89).

Hwang will assume the chairmanship of the state-owned Taiwan Power Co
(Taipower, =E5=8F=B0=E9=9B=BB) next week.

During his 989-day tenure at TTL, Hwang injected his marketing expertise
into the century-old company and successfully led it to retake its
market share at a time when foreign imports were threatening TTL's
leading position.

TTL posted NT$8.65 billion (US$280 million) in pre-tax income last year,
up from NT$8.54 billion in 2003.

However, the privatization process has been thwarted by union objections.

The company's labor union is pleading with lawmakers to ensure that the
7,000 employees will be able to keep their jobs.

According to the Ministry of Finance's timetable, TTL should have been
privatized last year.

Dawn, 47, a former director of Kaohsiung City's Bureau of Finance, said
that the key to privatization was engaging in comprehensive
communication with labor representatives, in addition ot devising
complementary measures to offset the possible impact on employees.

"The interests of our customers, employees and shareholders must be
safeguarded during the privatization process," he said.

In response to demands from anti-tobacco groups that TTL rename its
leading cigarette brand, "Long Life" (=E9=95=B7=E5=A3=BD), to avoid mislead=
ing
consumers, Dawn said that there was room to review the trademark and
make appropriate changes.

As Long Life is a well-known brand name that has been popular for more
than a decade, further discussion is needed to decide whether it should
be given up, Dawn said.

Chan Shih-chu (=E8=A9=B9=E8=B3=9C=E5=B1=80), director of TTL's tobacco depa=
rtment, said that
the renowned brand name is the company's most important asset, and that
changing the name would cause significant losses and jeopardize the
company's corporate operations.