East Asiatic Company Nutrition Essay Example | Topics and Well Written Essays - 2500 words

East Asiatic Company Nutrition - Essay Example It is hoped that EAC will continue to grow and expand its business in the world markets in coming years. Economics of the infant nutrition industry means what are the financial considerations or economically significant aspects of the industry? The nutrition business mainly centers around the production and sale of milk powder and other products for newborn and growing children under the various brand names. The recent economic recession requiring an increase in the commodity prices because of rising cost of raw material has decreased the sale of EAC Nutrition in Thailand and Malaysia. There has been a decrease in the stock price on account of the investor’s lack of trust in the Asian economy and fear of neck-throat competition. Thanks to the successful restructuring of the company, the share price has increased during June 1998 in 2002.The management is making all-out efforts to further enhance stock price and to rebuild the confidence of stockholders in the company. A dynamic growth strategy ensuring that EAC would continue to grow and expand in the years to come is being chalk ed out. A new management team took over in 1998 and restored financial strength by shifting money from underperforming business units to viable units. As a result, business units amounting to over US $ 1.4bn (DKK 12bn) in annual sales and the US $36.4 million (DKK 300 million) in annual losses were profitably divested. In (2001) 25% of group sales were contributed by EAC nutrition and 34% of group operating profit with an EBIT margin between 8 to 10% were also given. Driven by the increase in GDP growth in many countries especially China, Singapore and India, the domestic market capacity for high-quality dairy products will go on escalating leading to higher demand of dairy products especially infant milk for large-scale production or joint ventures in collaboration with a local businessman.