New President of Taiwan Tobacco & Liquor: Determination Made Me

 Introduction: Recently, the Taiwan Times interviewed President Huang Ying-shan regarding the company's restructuring plan. The president of Taiwan Tobacco and Liquor Corporation, Huang Ying-shan, is changing the trajectory of this former monopoly company, altering the work of its employees and brewing strategies for privatizing its liquor business.

  Chinese e-cigarette news: In July 2013, after the corporatization of the state-owned Taiwan Tobacco and Liquor Corporation, Huang Ying-shan, former head of the National Taipei University Business School, became the first president. Recently, the Taiwan Times interviewed President Huang regarding the company's restructuring plan.   President Huang Ying-shan is changing the trajectory of this former monopoly company, altering the work of its employees and brewing strategies for privatizing its liquor business.   Reporter: For you, was it difficult to transition from being a professor to managing a state-owned company?   Huang Ying-shan: I have been in my current position for over six months, and frankly, this job is much easier than I originally thought. The basic quality of the company's employees is very high. What they lack is experience in marketing and planning, which is where my expertise can contribute. In the past, many presidents of state-owned enterprises were appointed for political reasons. Although they enjoyed a certain reputation in specific fields, they generally lacked management skills.   Reporter: Market observers are very concerned about your qualifications, saying you lack experience in managing a company. What do you think about this?   Huang Ying-shan: Many people indeed have doubts about my abilities, saying I lack practical market experience. However, I started my career as a salesperson at Sampo Corporation, and before becoming vice president at the company's U.S. affiliate, I worked at Sampo for 11 years. I served as general manager at China Color Printing for seven years and as executive manager at Haneda Machinery for two years. I have 32 years of teaching experience and 21 years of experience in private companies. Therefore, it is incorrect to say that I lack experience in private enterprises.   Reporter: How long is your work contract with Taiwan Tobacco and Liquor Corporation?   Huang Ying-shan: Three years.   Reporter: As the leader of a government-controlled enterprise with annual sales revenue of NT$65 billion and 7,000 employees, how do you plan to maintain the company's competitiveness in the market?   Huang Ying-shan: First, we must improve profit levels and sales volume. However, the key issue is restructuring the company. We have four business segments—spirits, beer, tobacco, and distribution—but the marketing situation is chaotic. It is well-known that our organizational structure is outdated and has many problems. So far, I have not undertaken major restructuring actions, but I am determined and confident in addressing these issues.   In fact, I have a different view of state-owned enterprises because they are also part of the management system, which requires them to achieve many goals. Unlike private companies that focus solely on profit, state-owned companies must operate within a bureaucratic framework.   Reporter: Do you have plans to reduce redundancy and improve efficiency?   Huang Ying-shan: Currently, I have not made any plans. Frankly, as the president of a state-owned company, my task is not to lay off employees and increase unemployment. On the other hand, most of our employees have worked under this bureaucratic system for many years, and this year is the first year of adjustment to the new company culture. To be realistic, I will observe their performance for a year and a half before making any decisions I deem necessary.   Reporter: How high are the company's management costs?   Huang Ying-shan: Our management costs are high, accounting for 30% to 40% of our sales revenue. Believe it or not, about 200 employees earn over NT$2 million annually. However, our high labor costs are not a problem that can be solved overnight. This is a traditional issue that cannot be resolved simply by cutting their salaries. According to the law, as long as we are profitable, we cannot reduce employee salaries. Therefore, I plan to assign them more tasks, hoping they can create more value.   Reporter: The state-owned long-distance bus company, Taiwan Bus, has been operating independently since 1980, but its business has been in decline since then. Does Taiwan Tobacco and Liquor Corporation have a different development path than Taiwan Bus?   Huang Ying-shan: We certainly will not follow in the footsteps of Taiwan Bus. We are adopting a private business strategy to operate the company. Although we recognize that the government acquisition process is highly inefficient, we still have to comply with the law.   Reporter: What is your overall sales target for this year?   Huang Ying-shan: Initially, we expected sales revenue to grow by 10%, reaching NT$64.9 billion. Due to an increase of about NT$6 billion, or 23%, in sales revenue in the first four months compared to last year, we expect annual sales to reach NT$69 billion this year. However, if we can successfully enter the mainland market with our best-selling cigarette brand, Changshou, by the end of this year, our annual sales could reach NT$100 billion.   Recently, we signed a trademark exchange agreement with Shanghai Tobacco Company, allowing us to sell the Changshou brand in mainland China while they can sell the Zhonghua brand in Taiwan. We expect total sales of Changshou cigarettes to reach 2 million cartons next year, generating NT$35 billion in revenue.   Reporter: One of the missions of Taiwan Tobacco and Liquor Corporation is to enhance the image of its products, elevating the local flavor to the level of international brands. What challenges do you face in achieving this goal?   Huang Ying-shan: First, we must develop and sell high-priced liquor products. Currently, the highest-priced liquor is about NT$1,200 per bottle, with most priced at several hundred NT$ per bottle. I believe we have the potential to develop high-quality liquor products priced between NT$2,000 and NT$3,000 per bottle. Additionally, we can customize products for international markets targeting Chinese communities, such as Japan and Singapore.