In “From Asia To Africa: The International Expansion Of Hon Chuan Enterprise” Celeb

Huayong Chen, Allen Kk Chan state the objective Hon Chuan needs a new market in which to
expand its manufacturing business, a beverage packaging and filling company. Hon Chuan went to
mainland in China and Southeast to seek much bigger market. The African base may help the
company reach the turnover milestone of NT$20bn (approximately US$640m) in the next year.
They have so far failed to reach the NT$20bn turnover that has been targeted every year since 2013.
Rather than only selling products, Tsao decided to make a brave move after losing a key customer
in mainland China and expand their business into Africa by establishing its own factory. Hish-
Chung Tsao modify his strategy and had present the strategy to the directors at the next broad
meeting. In his mind, there should be three stages. The first stage is occupying the markets of
Mozambique and South Africa. The second stage would involve establishing more factories and
penetration more African locations. The final stage is launching their own brand. Africa was a new
battlefield to Hon Chuan which it had little knowledge.
To explore the African market, Hon Chuan started participating in exhibition in South
Africa. There, it obtained orders from Shimada, a company from Mozambique. Hon Chuan sold
plastic caps and performs to Shamida, which earned it NT$50m (approximately US$1.6m) annually.
With the help of these business activities, Hon Chuan gained important knowledge about
Mozambique and Africa.
Much more effort might be needed. Tsao intention was not just to add another
manufacturing base, but to develop its own brands as an OBM as the company had done in
Cambodia just one year earlier. In Africa, Pepsi and Nestle could all be Hon Chuan’s customers for
packaging and filling services, but if Hon Chuan want to launch their self-owned brand products
they would become competitors. The first step of Hon Chuan in Mozambique might be relatively
easy because South Africa was the largest market and the centre of the region. .The diversity of
African countries increased the difficulty of regional manufacturing and marketing. The implication
if Hon Chuan headed north next, transportation was a problem. Many distributors and sellers had no
vehicles to deliver product. Next, electric power was usually supplied in limited hours per day, even
in many capital cities. Tsao realised that a strong team was very important, but HR would be
another implication. Most employees had no strong motivation to leave their comfortable
environment. Others, it was challenging to deal with cross-cultural issues in management and
marketing. Language barrier would be another problem. He updated report showed that the
production lines in Mozambique factory had already been fully loaded for the first two months,
having earned NT$32m (approximately US$1.1m).