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2000
Overview
The division's trading interests include the importing and
retailing of motor vehicles and the wholesaling and retailing of sports
and casual footwear in Hong Kong, Taiwan and Mainland China. The industrial
interests principally comprise joint ventures with a variety of multinational
partners in waste management and in the manufacturing and distribution
of beer, paint, aluminium cans and busduct. The economies of the division's
principal markets fared differently in 2000. While Mainland China and
Hong Kong showed strong GDP growth, the Taiwanese economy weakened significantly
in the second half of 2000, eroding consumer confidence.
The Taikoo Motors and Swire Resources groups recorded good profit growth
for the year, whilst the industrial businesses had markedly varied fortunes.
As part of the refocusing of the businesses within the division, Swire
Loxley was sold to Dah Chong Hong Holdings for HK$87 million and Taikoo
Motors sold its 60% share in Taikoo Truck to the Volvo Truck Corporation
for HK$5 million. Swire Engineering was sold for book value, Swire Engineering
Services was closed shortly after the year end and further rationalisation
was carried out in the Carlsberg Brewery group and Taikoo Sugar.
Trading Companies
TAIKOO MOTORS GROUP
Taiwan: The Taikoo Motors Offshore group is the exclusive distributor
and dealer for Volvo, Volkswagen and Kia cars, and is a distributor and
wholesaler of Volvo trucks and buses. This business recorded strong profit
growth with sales well ahead of budgeted levels. Taikoo Motors is now
the largest importer of passenger vehicles into Taiwan with sales of 8,750
vehicles in 2000. Attributable profit was adversely affected by a non-recurring
payment of withholding tax on prior years' profits and by flood damage
as a result of Typhoon Xangsane.
Hong Kong: The Taikoo Motors group is the exclusive distributor and dealer
in Hong Kong for Volvo and Hyundai cars. Pressure on prices continued
to restrict profit growth.
Mainland China: Taikoo Enterprises is the exclusive distributor for Volvo
passenger vehicles. Sales in 2000 were more than double the previous year
as the market continues to liberalise and import licences become more
readily available. The business traded profitably for the first time.
Taikoo Motors has recently strengthened its brand portfolio with the addition
of the Kia distributorship in South China.
SWIRE RESOURCES
The company is the largest importer
and retailer of sports and casual footwear in Hong Kong. It also distributes
specialist lines of sports apparel. Its operations comprise 40 shops in
Hong Kong and 12 in Mainland China.
The business returned to significant profit in 2000 due to an improved
range of products and enhanced stock control. 1.7 million pairs of shoes
were sold during the year.
Industrial Companies
Subsidiaries
SWIRE ENGINEERING
The company continued to trade at
a loss in 2000 and was sold to the Chinney Alliance Group for book value
in October.
SWIRE ENGINEERING SERVICES
This company was closed shortly after
the year end due to the expiry of the initial baggage handling contract
at Hong Kong International Airport. The company was established to build
and manage the initial operations of the baggage handling system, and
had traded profitably since inception.
TAIKOO SUGAR
The company made a loss in 2000 due to increased costs and
bad debts. The decision was taken at the year end to outsource the company's
production and distribution activities. Taikoo Sugar will continue to
be responsible for marketing and product development for its full range
of products.
SWIRE DURO
Losses were incurred due to continued weakness in the Hong
Kong construction market. Towards the year end, orders for marble installation
contracts began to strengthen.
Jointly Controlled Companies
CARLSBERG BREWERY
HONG KONG
The premium beer market in Mainland China
remains over-supplied due to a proliferation of foreign joint-venture
breweries with attendant price erosion. During the year the company sold
75% of Carlsbrew Brewery (Shanghai) to The Tsingtao Brewery Co for RMB
154 million. The company exceeded its sales and profit targets in Hong
Kong, but Mainland China sales suffered a volume decline which resulted
in the business making an overall loss.
CROWN CAN HONG KONG
Market conditions deteriorated significantly in 2000 with pressure
on volume and price. There remains substantial canning overcapacity in
Mainland China and prospects for the next 12 months are weak.
CROWN VINALIMEX PACKAGING
Demand for aluminium cans in northern Vietnam fell during the
year and the company recorded a loss.
ICI SWIRE PAINTS
The company recorded 30% sales growth in Mainland China for
the second consecutive year through the launch of several new paint products
and increased market share. The company, which has manufacturing facilities
in Guangzhou and Shanghai, is successfully building a significant market
presence in Mainland China. Operating profit exceeded targets, though
a non-recurring charge of HK$10 million relating to the write-off of pre-operating
expenses resulted in an overall loss.
SWIRE SITA WASTE
SERVICES
Swire SITA recorded satisfactory results for the year. In July,
the company purchased a 53% interest in Far East Landfill Technologies,
which operates the North West New Territories landfill. It also tendered
successfully for the management of a waste to energy incineration project
in southern Taiwan which started in December. Its subsidiary, CSR Macau,
also had a satisfactory year.
SCHNEIDER SWIRE
The company traded profitably in 2000 due to strong export
demand for its busduct products. Margins improved as more raw materials
were sourced within Mainland China.
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