- Asia Pulse -
Japan\'s UCC Ueshima Coffee Co. just said that it will purchase a 50.47 per cent stake in
Unicafe Inc. for three billion yen (US$33.5 million) next month and turn the coffee producer into a subsidiary. This capital tie-up is expected to help the smaller Unicafe revitalize its business and to enable UCC to bolster its market share.Japan's UCC Ueshima Coffee Co. said Friday that it will purchase a 50.47 per cent stake in
Unicafe Inc. (TSE:2597) for three billion yen (US$33.5 million) next month and turn the coffee producer into a subsidiary.
This capital tie-up is expected to help the smaller Unicafe revitalize its business and to enable UCC to bolster its market share.
Unicafe President Hiroyuki Otake and the seven other directors will step down at a general shareholders meeting on December 22, with a new management team to be dispatched from UCC.
Unicafe reported Friday a 3.6 billion yen net loss for the year ended Sept. 30 -- its third straight year of red ink -- on sales of 21.1 billion yen, down seven per cent. Slumping sales and a spike in coffee bean prices weighed on earnings and eroded margins.
UCC and Unicafe produce a total of about 66,000 tons of regular coffee and control roughly 25 per cent of the Japanese market. But price competition is intensifying in the coffee industry now that coffee beans cost more.