Pou Chen is one company that's full of sole.Its Yue Yuen subsidiary is the world's largest athletic shoe manufacturer turning out more than 250 million pair a year for customers like NIKE, adidas, Reebok, New Balance, and Puma. Athletic shoes, made in China, Indonesia, Taiwan, and Vietnam, account for more than 50% of sales. The company also makes casual shoes, plastic sandals, and shoe parts as well as thin film transistor LCD modules and monitors. Pou Chen also makes hiking and work boots for Dr. Marten, Timberland, and Merrell. The company, which handles its own R&D, chemical processing, logistics, and delivery, is actively expanding its retail and manufacturing operations. Pou Chen was founded in 1969. Key numbers for fiscal year ending December, 2009: Sales: $6,403.8M One year growth: 5.0% Net income: $217.9M Officers: Chairman: C. C. Tsai General Manager: N. F. Tsai Director Finance and Accounting: Chan Lu Min Competitors: Kingmaker Li Ning Pegasus International English▼ • • Top of Form Enter question or phrase... Search: All sources Community Q&A Reference topics P o u C h e n C o r p o r a t io n • Browse: Unanswered questions New questions New answers Reference library Bottom of Form Featured Videos: Top • ○ Play Considering Outsider Opinions When Planning Strategy Play How to Save Money in a Cash Crisis Play Do's and Don'ts of Preparing Your Home for Sale Play How to Draw from Your Retirement Account • ○ • ○ . • ○ • ○ View more Business & Finance videos Gale Directory of Company Histories: Pou Chen Corporation Top Home > Library > Business & Finance > Company Histories . Develop logistics services. Grow vertically. 1980: The company receives a breakthrough contract to produce sports shoes for adidas. a factory for producing plastic footwear in Taiwan. Establish synergistic joint ventures. Reach critical mass and leverage it to achieve position as lead manufacturing partner for industry players. The . Pursue business opportunities in China.. 3144 Women's Footwear Except Athletic Pou Chen Corporation is a Taiwan-based holding company representing the world's largest OEM/ODM (original equipment manufacture/original design manufacture) footwear design. Puma. and many others. While Pou Chen itself concentrates on research and development and design activities for the footwear industry. work boots. 1992: Yue Yuen goes public on the Hong Kong Stock Exchange. manufacturing.Company Perspectives Corporate Strategy: Expand horizontally. Rockport. Yue Yuen enters sportswear production with the purchase of the majority of Pro Kingtex. 316213 Men's Footwear (Except Athletic) Manufacturing. 316214 Women's Footwear (Except Athletic) Manufacturing SIC: 3149 Footwear Except Rubber Nec. 3143 Men's Footwear Except Athletic. and distribution group. its main subsidiary. and shoes for brands such as Timberland. oversees the group's footwear production. New Balance. 2002: Pou Chen transfers its production operations to Yue Yuen. Clarks. 1996: Yue Yuen acquires full control of Pou Yuen. 1988: The Tsai family establishes Yue Yuen Industrial in Hong Kong in order to expand production to mainland China.5 million pairs per year. Asics. 1993: The first production plant in Indonesia opens. Pou Chen and Yue Yuen are the manufacturing force behind nine of the world's top ten sports shoe brands. 2003: Pou Chen enters the high-technology sector. adidas. Doc Marten. 2006: Yue Yuen announces plans to build a new footwear factory in Indonesia with a production capacity of 3. both Pou Chen and Yue Yuen establish the Pou Yuen Industrial joint venture in China. 1994: Production in Vietnam is launched. launching a backlight production joint venture. • • • • • • Incorporated: 1969 NAIC: 316219 Other Footwear Manufacturing. and Reebok. Hong Kong Hang Seng Index-listed Yue Yuen Industrial (Holdings) Ltd. The company also produces boots. including Nike. Key Dates • • • • 1969: Tsai Chi Liu and his three brothers establish Pou Chen. Pou Chen initially produced plastic shoes. which was rapidly replacing Japan as a global source of cheaply produced goods. the company's sales topped TWD 150 billion ($3. Pou Chen is listed on the Taiwan Stock Exchange. The late 1970s had seen the appearance of a new generation of sports shoe. Tsai then began a career as an art teacher for an elementary school. establishing a 600-strong retail store network in mainland China. the new sneaker types revolutionized the footwear industry. By 1969. Vietnam. From Rags to Shoes in 1969 Pou Chen was founded in Changwha (alternatively Chang Hwa). and Indonesia. and Yue Yuen is listed on the Hong Kong Stock Exchange. At night. the company had bought the Fu Hsing Industrial Estate in Changwha and begun preparations for a new factory complex there. Nai Fang Tsai is Pou Chen's chairman of the board. and launched a number of new .15 billion). the company has targeted growth beyond the footwear market. Caught up in scandals involving labor conditions at many of its factories. In 2005. The booming Taiwanese export market. where he studied art design.000 stores in the near future. the company also had begun shipping plastic sandals. with almost 290. Since then. who launched the company in 1969. Pou Chen transferred its production operations to its Yue Yuen unit in the early 2000s. both as a colorist and as shoe designer. and increasingly began to take on OEM (original equipment manufacture) and ODM (original design manufacture) contracts from a number of international footwear brands. Both Pou Chen and Yue Yuen are dominated by the founding Tsai family.000 employees working at some 350 production lines in China. and by 1974. roughly four times the size of its nearest competitor. as well as at a small number of production units in its Taiwan home base. for New Balance in the United States. where it sells its customers' shoe brands. establishing operations for the production of LCD displays and related high-tech products. Tsai Chi Jiu himself went to Taichung Normal University. enabled the company to achieve strong growth. by Tsai Chi Jiu and his three brothers as a manufacturer of footwear for the export market. Pou Chen has branched out into distribution. however. by 1973. which were complemented a year later by the production of boots. More technically oriented than their predecessors. The Tsais came from a family of fabric weavers. the company had launched production of plastic casual shoes.company produces nearly 190 million pairs of shoes per year. or apporximately one in every six pairs of shoes sold each year. fellow Taiwanese producer Feng Tay Enterprises Co. Tsai moonlighted as freelance designer for local shoemakers. and together with his brothers launched Pou Chen Corporation. The completion of the Fu Hsing factory in 1978 enabled Pou Chen to begin manufacturing a new type of shoe that was to change its destiny. Pou Chen also began developing its contacts with the international footwear market. Taiwan. By 1976. In addition to shoe production. The company expects to expand its retail chain to 1. The company also operates a smaller production unit. Tsai had decided to found his own footwear companies. During this period. Solar Link. Over the next three years. signing on New Balance as one of its first customers. Yue Yuen was listed on the Hong Kong Stock Exchange. by then emerging as a new low-cost production center. called Pou Yuen Industrial. in 1988. The first signs of a shift in manufacturing in mainland China had begun to be seen by then. called Yue Yuen Industrial Holdings. Instead. if not most. Into the second half of the 1980s. Pou Chen launched production of sports shoes in 1978. in 1984. the number of Chinese production lines operated by the company in China neared 160. in 1988. adidas. Pou Chen continued to expand its number of production sites in mainland China. the company completed a new extension of the Fu Hsing site. Backed by a major manufacturing contract for Reebok. This expansion enabled Pou Chen to transfer an increasing proportion of its production from Taiwan to the mainland into the early 1990s. The adidas contract not only provided the company with a strong revenue source. In that year. on an international level. arranged through a network of investment companies and shell companies registered in the British Virgin Islands. to begin manufacturing in China in 1992. when the company signed a contract with adidas. Yue Yuen opened its first manufacturing plant in China. and the rising wages of its workforce. as well as its client list. it also built the group's reputation among the global footwear industry. including Nike. This company provided Pou Chen with a conduit into the mainland Chinese market. To this mix. International Expansion Through the End of the 20th Century Through the 1990s. Puma. Pou Chen found itself struggling to maintain a competitive edge amid the rising worth of the Taiwanese dollar. adding an additional factory complex. Pou Chen's true breakthrough came in 1980. The company also began production of private-label footwear for the department store market in the United States. establishing its first shoe factory there in 1993. Pou Yuen Industrial also provided a vehicle for the expansion of Pou Chen's industrial infrastructure beyond the Chinese market. and New Balance. By the mid-2000s. Zhuhai. Tsai Chi Jen. already one of the world's top athletic shoe brands. moved to Hong Kong to establish a new company. Pou Chen and Yue . In this way. in Dongguan. Reebok. Pou Chen added its own directly controlled manufacturing joint venture after the Taiwanese relaxed the island state's foreign investment rules. Pou Chen expanded its production capacity. however. Yue Yuen set up three more factories in China. representing more than half of the company's total production. Many of the company's factories in China were established as joint ventures. yet Pou Chen was restricted from a direct entry into the mainland market by Taiwanese law. of the major athletic shoe brands in the world. in Zhuhai. This allowed Pou Chen to form a 55-45 joint venture with Yue Yuen. Two years later. Pou Chen rapidly built up partnerships with many. and Zhongshan.brand names. one of Tsai Chi Jiu's brothers. The company targeted Indonesia. with the acquisition of rival Pou Yun Industrial Company. Exploring New Markets in the New Century Pou Chen found itself at the center of controversy in the late 1990s. By the mid-2000s. Pou Chen's and Yue Yuen's holdings reached 72 production lines and 51 production lines in Vietnam and Indonesia. Pou Chen made the unusual move of establishing a manufacturing subsidiary in the United States. That company. at the same time tightening its control over the Hong Kong-based company. In 1994. The company quickly began building up its presence in both countries. however. in a share swap deal that gave Pou Chen majority control of the Hong Kong-based company. was dedicated exclusively to the production (chiefly the assembly) of New Balance shoes for the U. On the one hand. market. These stores were stocked with the branded shoes Pou Chen manufactured for its customers. as the often appalling working conditions at factories under the company's control sparked a wide-ranging scandal throughout much of the global manufacturing market. Also during the 1990s. The company began building up a network of retail stores and in-store counters in the mainland. which centered especially around Nike (estimated to account for as much as 53 percent of Pou Chen's sales). including a number of joint ventures. such as its 50 percent stake in natural leather producer Prime Asia. continued to be controlled by the Tsai family. This was accomplished through the creation of an array of more than 60 subsidiaries. Vietnam. The company also established a technical partnership with Kuraray in Japan for the production of high-quality. In part in response to the growing backlash against Asian-produced goods. called Solar Link. both based in China. Pou Chen began constructing a vertically integrated operation.S. The addition of Pou Chen's nearly 70 production subsidiaries helped boost Yue Yuen's . remained a 100 percent subsidiary of Pou Chen. as well as the undervaluing of especially Yue Yuen's stock due to the complexity of the two companies' organization. the company entered the production of raw materials and shoe components. Both companies. Pou Chen also had transferred its 55 percent of Pou Yuen Industrial to Yue Yuen. By the beginning of the 2000s. the company. The resulting controversy. at the same time. Pou Chen continued to transfer its production outside of Taiwan through the 1990s. and by the mid-2000s had opened some 600 stores. Pou Chen had transferred nearly all of its footwear production units to Yue Yuen. That company. led Pou Chen to launch a streamlining drive in the early 2000s. Megatrade. established its first retail operations in China. the company operated just eight production units in Taiwan. in large part to supply the local footwear market. in partnership with Yue Yuen. and a 45 percent stake in split leather producer Cohen. in 1994. At the same time as it built its upstream wing. Pou Chen turned toward the downstream side as well. By 2002. polyurethane-based synthetic leather. respectively. contributed to a slowdown in the market into the early 2000s.Yuen next teamed up to enter another new market. The continued controversy surrounding the company's labor practices. T. The streamlined Pou Chen. and related accessories when it acquired Prosperous Industrial Holdings Ltd. Variadhana Citraselaras (Indonesia). the company formed a joint venture with K-Bridge Electronics in Taiwan to manufacture backlight modules and light guide panels at a production plant in Dongguan. the company announced plans to build a major new factory in Indonesia. overseeing functions such as human resources and other administrative services. . the company's diversification remained backed by its role as a powerhouse footwear producer in a market already worth more than $20 billion per year in the middle of the 2000s. Pou Chen Indonesia. P. Principal Subsidiaries Global Brands Manufacture Ltd. Pou Chen Vietnam Enterprise Ltd. in the meantime. development. Observers were somewhat skeptical of Pou Chen's new high-tech interest. gaining the exclusive distribution rights in that country for brands such as Converse. Yue Yuen also had entered the manufacture of sports bags. the company acquired a 31 percent stake in sports apparel manufacturer Eagle Nice (International) Holdings. The following year. 51%). particularly because of the company's relatively late entry into the sector. for example. At the end of 2005.T. and Coleman. P. safety. China.. Dah-Chen Shoe Materials Ltd. The company increased its shareholding in that company to 45 percent in 2005. Friendsole Limited (Hong Kong). (Vietnam. Nikomas Gemilang (Indonesia). Pou Chen expected to remain the new century's footwear leader.status as well. Yue Yuen Industrial (Holdings) Corporation (Hong Kong). Sukespermata Indonusa (Indonesia). the company extended its product range to the sportswear sector with the purchase of majority control of Pro Kingtex. Pou Chien Chemical Company (Taiwan). ASICS.5 million pairs of shoes per year. Yue Yuen continued to grow into the middle of the decade. Pou Chen. and casual footwear. the following year. In 2003. through its majority control of Yue Yuen. Recognizing that future growth prospects for its footwear operation remained limited (the company by then represented some one in six of every pair of shoes sold in the world) Tsai Chi Jiu sought to diversify the company into the high-technology sector. P. In 2003. Yue Yuen also continued developing its wholesale and retail networks in China. By then. Pou Chien Chemical (Holdings) (British Virgin Islands).T. Fu Tai Company Limited. for example.T. this time through a joint venture partnership with Golden Chang Group for the production of work. in addition to acting as Yue Yuen's holding company. Nonetheless. continued to reinforce its position in that market. Yet Tsai Chi Jiu sought new horizons for Pou Chen. Forearn Company Ltd. for example. In March 2006. had refocused itself around the research. and design of footwear for its major branded and other customers. Pou Chen added a new joint venture with Quanta Computer to produce LCD monitors. backpacks. and in 2003 the company was added to the Hong Kong Stock Exchange's blue chip Hang Seng Index. with a production capacity of more than 3. Hush Puppy. Chiya Vietnam Enterprise (51%). (British Virgin Islands). Yue Yuen expanded again.. P. Pou Yuen Vietnam Enterprise Ltd." Taiwan Economic News. Hyosung Corporation. 2003. October 18." Footwear News. Zarocostas. Omzest Business Division.answers. "Pou Chen Unit to Build Plant in Indonesia.Pou Sung Vietnam Industrial. (U. 2003. Predicts Continued Growth. Pou Yuen Industrial (Hong Kong).. Korindo Group. 2006. Cohen Read more: http://www. 2006.A. L. PT. Solar Link International Inc. "Pou Chen to Tap Global Market for Working Shoes." CENS." Taiwan Economic News. 4. 2005. PT. C and J Clark International Ltd. June 10. "A Successful Tsai Is an Average Joe. p. "Taiwan's Two Footwear Giants Benefit from Noted Sports Games. — M. November 30. John. Principal Competitors Feng Tay Enterprises Co. "Pou Chen. 10.. Shanghai Leather Corporation." Taiwan Economic News. Pou Yuen International Limited (British Virgin Islands). Yue Yuen Industrial Limited (Hong Kong). June 2." Taipei Times. 2004. Pou Yuen Marketing Company (British Virgin Islands). PT.S. Binh Tien Imex Corporation Private Ltd.. Hardaya Aneka Shoe Industry. "Pou Chen Bulks Up Vietnam Production. Garuda Indawa.. 2005.). July 5. March 19. p. March 21. Further Reading "Pou Chen Expands from Footwear Manufacturing into Retailing." China Times. World's Biggest Footwear Maker.com/topic/pou-chencorporation#ixzz1R1bPTz61 .