Wahaha is reportedly suspending 70% of its production lines. AD Calcium Milk and Nutritional Express also urgently halted production. Insider responds.

Wahaha’s suspension of operations has once again attracted attention.

On March 27, according to Caixin, multiple sources indicated that Hongsheng Group notified several of its factories on March 26 that production would be halted for a week. One source stated that, except for the factory producing red Wahaha bottled water, almost all other factories have ceased operations, including nationwide branches (even) the production facilities for AD calcium milk and Nutritional Fast Line have urgently stopped production. Another source indicated that production is expected to resume after April 2. According to other media reports, the halted capacity is about 70%.

According to Southern Metropolis Daily, multiple sources indicated that the reason for the suspension may be to allow the market to digest excess inventory, “sales have not been good recently, and (the market) inventory is quite large.” However, some have questioned the true reason for the suspension: “The company has never said it would halt production due to excessive market inventory after all these years.” A person close to Wahaha said. Others speculate that the real reason for the suspension may be changes in the shareholding of Wahaha Group.

Tianyancha shows that, currently, Zong Fuli holds 29.4% of the shares in Hangzhou Wahaha Group Co., Ltd.

According to the Daily Economic News, sources close to Wahaha revealed that it may be because Zong Fuli’s management style is indeed different from Zong Qinghou’s; previously, Zong Qinghou did not adjust inventory in this way, but this adjustment is definitely not a complete halt of operations, but rather a normal production adjustment.

Wahaha Precision Machinery Company initiates dissolution and liquidation

Tianyancha APP shows that Wahaha Precision Machinery established a liquidation team on February 24 and published a cancellation notice, with the reason being “resolution to dissolve.” The head of the liquidation team is Yan Xuefeng, who is one of the core executives of Hongsheng Group and is also considered to be Zong Fuli’s “trusted aide.”

Wahaha Precision Machinery is 100% owned by Wahaha Commercial Co., Ltd. Through shareholding penetration, it can be seen that the ultimate actual controller is Zong Fuli. In February of this year, the legal representative of Wahaha Precision Machinery was changed from Zhu Lidan to Sheng Wenlong.

According to Hongxing Capital Bureau, from employees of Wahaha Precision Machinery, Wahaha Precision Machinery was established in 1999 and mainly produces supporting equipment for various subsidiaries of Wahaha Group.

The aforementioned employees also stated that there were no signs of the dissolution announcement beforehand; after the Spring Festival, everyone returned to work as usual. So far, the company has not provided employees with a written compensation agreement. The dissolution involves approximately 180 employees.

Sources close to Wahaha indicated that this move may be Zong Fuli’s adjustment of non-core businesses to focus on the main food and beverage industry.

(Source: 21st Century Business Herald)