CHINA: Noodle giant Meichu files for liquidation
Further proof that the heyday of the instant noodle may be coming to an end in China comes in the revelation that Meiju Corp. has filed an application for liquidation, which has been accepted by Beijing's number one intermediate court.
Meichu was once the fourth largest noodle producer in mainland China, but was hard hit as the noodle market declined. Official date quoted in the Beijing Evening News shows the sales volume of instant noodles had climbed from 1.3bn servings in 1992 to 19bn in 2000, but have since begun to drop off sharply.
China Central Television (CCTV) confirmed the slump, saying that advertising spend on instant noodles had fallen steeply in the second half of last year. Intense competition and oversupply has rendered margins in the instant noodle market negligible, with some manufacturers revealing they hardly make 0.01 yuan (US$0.001) per serving.
Meichu launched instant noodles in 1992 and benefited from the boom in the following years before the shrinking market prompted a reversal in its fortunes. The group has accumulated net losses of 52m yuan.
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