Noodle Village out of gold.doc

 PAGE \* MERGEFORMAT 4 Noodle Village out of gold Over the years, a number of consumer products company optimistic about China’s one billion population, the vision of the market, adhere to the early action can grasp the opportunities of the faith, but keep this one of the largest markets in the 21st century Qing Li investment in the country, hoping to lay the Taiwanese firms from lead. Especially the packaged food industry, covering a great deal of market area; in 1998, the National 200 billion U.S. dollars in food and beverage sales, packaging, food accounts for 20%, or 40 billion U.S. dollars. One of the few commodities such as cattle and milk powder, instant noodles, biscuits, soft drinks, etc., and their sales of as much as 20 billion dollars. However, despite the prospects of this market is very good, most foreign food and beverage company found that, in China to obtain even a small profit is not easy. Pre-2500’s largest food and beverage joint venture, and their pre-tax rate of return on invested capital compared to 1995 decreased by 6%. Even the top 200 largest joint-venture companies, operating life of only 3 years or less of the company, its average return of only 3%, has been operating for four years and longer, the company’s average rate of return is only about 10% (see Figure 1), this ratio in China is clearly lower than the risk-adjusted return on capital. Moreover, the rate of return of these companies also varied widely, from negative 36% to 60%. The results of this instability, together with the Asian financial crisis prompted investors to carefully consider their investment activities in China. Some businesses do not realize that their business has been a great profit possibilities; while some others reduce their growth expectations, to postpone a variety of additional investment in order to seek a successful business model. A multinational company operating in China have been a decade-long, pre-tax return on invested capital of less than 6%