China's top instant noodle maker Tingyi is planning to add as many as 43 beverage production lines in 2007 to boost its business.

The decision to increase the beverage output is in line with the "big potential of China's beverage market", the company said yesterday. Tingyi incidentally is China's largest bottled-tea maker, with its Master Kong brand accounting for 50 per cent of the country's market.

Taiwan-registered Tingyi, which controls 40 per cent of the Chinese instan-noodle market, said its net profit from the product rose 1.71 per cent in the third quarter to US$27.72 million, though its revenue from the business fell 4.73 per cent year on year.

The instant-noodle business is expected to yield a higher revenue later, Tingyi CFO Frank Lin said.

At present, though, Tingyi will concentrate on beverages because "we believe that China's beverage market, especially for tea drinks and bottled water, will continue to grow substantially in the next few years", Lin said.

"We hope to push our sales in 2007 to a higher level."

Tingyi's revenue from beverage sales leapt 42.68 per cent in the third quarter, thanks largely to its tea drinks and bottled water.

Accounting for 12.4 per cent of the market, Tingyi is China's second largest bottled-water maker. Only the Wahaha Group has a larger share, 18 per cent, of the market.

"Our aim is to take over Wahaha as the market leader this year or next year," Lin said.

The company had said earlier that it would add about 27 production lines that produce 36,000 bottles of water an hour to its existing 103 lines in 2007 to boost its production by about 30 per cent.

"China's instant-noodle market still has plenty of room for growth... Instant noodle consumption on the mainland is about 20 packs a person a year, compared to 45 packs in Taiwan and Japan."

Speaking about the instant noodle buisiness, Lin said: "Increased raw material cost dragged down our revenue... more promotion activities than last year cost us a lot, too." The revenue was still "within normal range", though.

The cost of raw materials such as flour and sugar had already dropped from 1,774 yuan (US$225) and 5,300 yuan (US$674) earlier in the year to 1,767 yuan (US$224) and 4,600 yuan (US$585) a ton, respectively, in September.

"If this trend continues, we can further increase the company's overall revenue and operating profit in the fourth quarter," Lin said.

The Tianjin-based food and beverage production giant's three-quarter earning was US$127 million, an year-on-year increase of 16.71 per cent.

The company's revenue and net earnings were US$702 million and US$60.67 million in the third quarter alone, an increase of 17.19 per cent and 15.24 per cent year on year, respectively.

Tingyi's shares dipped 0.62 per cent to HK$6.41 yesterday.