Japanese department store operator H2O Retailing Corp. will set up a joint venture in Taiwan to meet growing consumer demand for freshly baked bread.
H2O will upgrade its partnership with PX Mart Co., a local supermarket chain, to sell more freshly made bread in Taiwan.
The companies said Wednesday that Chuan-lian Hankyu Bakery Co. will be formed in mid-May, with H2O owning 49 percent of its 260 million New Taiwan dollar ($8.4 million) capital and PX 51 percent.
They will increase the number of bread-baking outlets from the current 61 to 255 this year and to 880 by the end of 2021.
In late 2016, PX began importing frozen bread dough from Hankyu B&C Planning Co., H2O's wholly owned bread manufacturer and store operator.
PX subsequently started selling freshly baked bread at its supermarkets at a price of around NT$30, or about ¥107, the same price as a similar quantity of bread sells for at Hankyu Bakery in Japan.
The Taiwan retailer expects to cut shipping and duty costs by about 30 percent by producing dough locally.
PX sold about 850,000 buns worth NT$23 million at its stores last year. Taiwan's total annual bread consumption is estimated at just over NT$60 billion, according to a local media report quoting government data.