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TheStreet Open House

SkyPeople: Juiced for Success

Stocks in this article: SPU

Many of the successful Chinese companies we have covered typically follow this story line: Gain a leading market position, increase manufacturing capacity to meet demand, expand product offerings and expand into more Chinese provinces.

After talking to Spring Liu, the CFO of SkyPeople Fruit Juice (SPU - Get Report), we believe this company will follow that path.

The simplicity of the SkyPeople's business plan -- to market and manufacture juice products -- was prompted us to delve further into the company's story.

SkyPeople has two general product categories: a concentrate line and a branded juice line. The company sells the concentrate as nonedible solid raw material to customers who process and manufacture their own beverage products.

Currently, the company manufactures apple, pear and kiwi concentrate products. In 2008, the company's concentrate line generated 78% of revenues, with 13% and 69% coming from domestic and international sales, respectively. SkyPeople uses the remainder of the concentrate raw material to make its own branded juices.

SkyPeople made a smart decision to create its own branded line in 2008 in response to declining sales of concentrate during the global crisis. The move helped the company maximize its production capacity, by using excess supply to create its own products.

Thus far, the move has paid off, paving the way for product diversification, new customer channels and fresh market opportunity.

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