TAI-YEN INDUSTRIAL CO., LTD.

Enterprise’s Prospect

　For 50 years, Taiwan Salt industry was operated by government directly. Therefore, TAIYEN with its historical duties had to undertake the missions to fulfill government policies. And it also could grow up and prosper under government protection. However, as social environment changed greatly in recent two years, such as privatization and liberalization, that would not allow TAIYEN to be complacent and conservative, and to close itself to outside world. The trend of economy globalization and the potential competition in open market (as a member of WTO, our government has to open our market) worked as an invisible force pushing TAIYEN forward.So we have to work out some strategies and projects to cope with this situation.

Conventional TAIYEN

　TAIYAN, just as its name expresses, specializes in salt production.From its establishment in March, 1952 as Taiwan Salt works to its reorganization as a company in July, 1995, TAIYAN’s business was limited to salt product, the sales of salt by-products, decreasing cost and raising efficiency that include renewal of salt field facilities, open up new salt fields, set up salt-wash and by-product plants, salt field mechanization and preparing to construct Tung Hsiao Electrodialysis Salt Factory.During this period of time, the job of TAIYEN is to regulate supply and demand of salt product, and to stabilize salt price. It provided sufficient cooking salt for general public and military consumption, and also for industry, agriculture and fishery to use.The quality of salt used by general public is improved in sequence of crude salt, washed Salt, iodized high quality salt, high quality salt, non-lodized salt and dietary salt .

　In this period, TAIYEN had gradually varied its products, though it stayed with salt production. Its profit mainly comes from a stable market and increased additional value of its new products. Besides, it had the right to monopolize the market, so it was very steady on its profit. In general, conventional TAIYEN survived in an environment without any competition and consequently was short of clear, concrete competitive strategy.

TAIYEN under Compound Managemen

　In 1990’s, the economic trend was liberalization and internationalization. And the main goal of government policies was to apply for joining GATT/WTO (General Agreement on Tariffs and Trade/ World Trade Organization).And with implementation of “the Fair Trading Law ” in 1991, those enterprises granted a monopoly to the markets suffered quite an impact.In 1992, the Ministry of Economic Affairs announced second batch of four state-run enterprises, including TAIYEN, which would be privatized. In 1995, the Ministry of Economic Affairs drafted “the Scheme for Liberalizing Salt Products”, and, step by step, let the salt products import freely.“The regulations of salt policy” would be abrogated after the privatization of TAIYEN. The enormous changes of external environments forced TAIYEN to alter its structure. It was reorganized into a limited company in July, 1995.Since then, it reduced gradually its evaporating brine scale, made investment in overseas salt works and varied its salt products.A variety of businesses was then its management strategy that was the foundation of TAIYEN’s privatization and, later, its smooth development. But the compound management would disperse company’s resources, and was difficult to generate a comprehensive effect.Furthermore, since salt price was low and for other products it was hard to find a market so that was not an easy way to make profit increase sharply. An adjustment of the management strategy was needed badly.

TAIYEN under Focus Management

　After its privatization, according to the plan of Ministry of Economic Affairs, TAIYEN had to return 98.7% of its land and about four (4) billion NT dollars to the national treasury; and, since the market was open, its salt products used to be under government protection were facing competitive pressure. At that time, TAIYEN had not many resources and the environment changed greatly, after thinking carefully over the situation, it revised a part of its management strategy and policy, and promoted enterprise reformation. The most dramatic change was to switch compound and diversified management strategy to focus management strategy concentrating in its core products.The so-called focus management strategy is to concentrate company’s limited resources on those that it can do and those that have additional values. That is to consolidate core businesses first, that include original core business (inedible salt and edible salt) and biotechnology business (collagen and microorganism pharmaceutical products), because in which TAIYEN has the chance to be a leader in the market. In order to echo its prospect, TAIYEN revises its strategy for “becoming an international leader in the field of biotechnology and marine science.”

　The enterprise transition is just like snake slough, pupa turning into butterfly. It must go through the challenges in external environment and the conflict within organization. Besides to encourage staffs to develop the spirits of “profession, innovation and efficiency”, the execution of the focus management strategy together with an effective operating system is crucial to TAIYEN’s long-term operation.