Taiwan Today

Sugar is not merely big business on Taiwan—it is overwhelmingly the biggest busi­ness, supporting the world's largest sugar corporation.

Employees have nicknamed it "the sweetest corporation this side of heaven," and not merely because of the product.

Work is provided for 17,000 direct employees, 150,000 contract farmers and 20,000 part-time laborers.

Altogether, about 1,200,000 persons—more than one in ten island inhabitants—depend upon it for their livelihood.

Social welfare and product diversification are the most advanced to be found on the island: influential examples for government and private industry.

This is the Taiwan Sugar Corporation, a giant of its kind and to a very large extent the foundation and inspiration for industrial development and the economic prosperity of free China.

Taiwan's sugar story is an old one, dating to the early 17th century. The Dutch occupied the island briefly, and sugar was exported to Europe and Japan. Koxinga ousted the Dutch in 1661 and sought to encourage sugar pro­duction in order to stimulate the economy. Much later, the Japanese were to satisfy their gnawing sweet tooth with Taiwan sugar. During an occupation period that lasted from 1895 to 1945, production was increased to a record level of a million metric tons annually. There was no concern about markets; almost all of it went to Japan.

World War II all but destroyed the industry. Mills, transportation facilities and warehouses were heavily bombed. In 1945-46, when Taiwan reverted to Chinese sovereignty, production was under 100,000 metric tons and declined further the following crop year.

That was when Taiwan Sugar Corporation took over—in May of 1946, and began the long climb back. A decade and a half later, TSC has capital of 48 million U.S. dollars and assets of US$125 million. Sales last year exceeded US$75 million and the corporation's exports account for more then 40 per cent of Taiwan's foreign exchange earnings. Its 25 mills march from Taichung to Nanchow, near the southern end of the island, and can grind 57,600 tons of sugar a day—which means about 57,600,000 stalks of cane.

Without exaggeration, it's one of Asia's biggest success stories.

TSC is a mixed corporation, although most of the stock—97 per cent—is held by the government. That wasn't exactly inten­tional. When the Chinese government took over the industry wreckage from Japan, there was, no one else with sufficient funds to buy, rehabilitate and operate what obviously was going to be a very big business. Government had to vest the public interest in a corporative form and hope for the best.

Such hopes are not always realized in Asia—or elsewhere. But on this occasion, the prophets of doom were disappointed and a dedicated corporate bureaucracy made the company into a highly efficient, profitable, progressive and public-minded enterprise. Government undertakings are sometimes as­sailed politically on Taiwan, and TSC is no exception. Yet those who are involved in the attacking do not question the outstanding Job that has been done; they merely would like the private share of the business enlarged so that those with funds to invest could cash in. So far the only steps in this direction concern two by-products plants and the TSC-owned pineapple cannery.

About 30 per cent of the cane comes from the 120,000 acres of corporation farms, the rest from the 150,000 contract farmers. Social welfare programs have been established for each group, and it is in this regard that TSC has pioneered for Taiwan and for the time when the mainland of China has been set free.

Social Services

Most of the 17,000 direct employees work at the 25 mills in southern and central Taiwan, or in the cane fields nearby. Each of these areas has a working population of from 300 to 1,000, residing with their dependents in villages that cluster around the mill. The corporation itself does not design or sponsor these villages, of from 500 to 1,500 people, but makes available the social services that establish a highly desirable way of life. These include kindergartens, primary schools, clinics, recreation centers and dormitories.

Also open to the children of contract farmers are the 39 kindergartens and 15 primary schools. Enrollment totals 7,000, and there are 291 teachers. For pupils living at a distance, free transportation is available on the corporation's own railroads. Schools are tuition-free.

Clinics now total 40 with some 100 doctors. Five are full-scale hospitals with operating rooms and similar facilities. Patients at the five are covered by the Central Trust Labor Insurance Program and the bill is paid by the trust. At the clinics, TSC employees are free and their dependents pay a tenth of the cost. Only direct employees are eligible for care at such installations. The patient load runs from 80,000 to 110,000 annually.

Growers Association

Dormitories are free; so are water and electricity. For Asia, these are long strides toward European and American-type welfare responsibility.

But it is the Taiwan Sugarcane Growers Association that sets TSC apart from most other employers in the region and that makes the corporation one of the most progressive in the world. Open to contract growers, direct employees and part-time workers, the association offers these services:

* Insurance. Some 60,000 policy holders are covered for death, accident, disability, childbirth and old age. The company subsi­dizes part of the premiums.

* Burial society. Voluntary members make small payments upon the death of a fellow member. The association keeps the records and does the collecting.

* Loans. These may be obtained for land improvement or for production. Secured loans based on warehouse receipts for sugar also are available. Land improvement projects have increased cane production by as much as 100 per cent. The farmer is assured of sufficient funds for fertilizer.

* Commodity distribution. The association handles farm implements, chemicals, in­secticides, sewing machines, bicycles, hardware and other items at wholesale prices. They may be obtained at 27 association stations.

* Technical assistance. Tractor plowing at cost. Demonstrations and high-yield contests.

* At-cost supply of such sugar by-products as molasses yeast feed for hogs and insecticides made by the TSC agricultural chemical plant. Hog raising has been greatly expanded through this program.

* Information services. A Sugarcane Bulletin is published three times a month. Photo news about the industry, color slides and technical films. Radio broadcasts.

* Miscellaneous services. Training cour­ses, vocational, education, publications, enter­tainment, excursions, medical services, scholarships, animal husbandry and veterinary service, including the supply of pedigreed leghorn pullets.

Association membership has grown to more than 80,000 in six and a half years, and the services to members exceed US$2 million. Yet this is not a bureaucracy-ridden enterprise and overhead costs have been kept to a minimum.

Corporation impact upon the economy does not stop at sugar. Because of the very size of operations, other industries and their employees are directly involved in the TSC success story. These include the fertilizer industry, machinery manufacturers, gunny sack plants, paper mills, shipping companies and others.

TSC's railroads have already been men­tioned. But their extent has not. Trackage reaches to every corner of the island, and the total of more than 2,000 miles exceeds that of the provincial government's system. Some 22,000,000 passengers are carried in the course of a year and around six million tons of freight. The sugarcane load is only a million or so tons heavier.

Relationships with the contract farmers depend not only on loans and social assistance, but also on fair treatment and a good price for cane. At present, farmers and TSC split the sugar extracted from their cane. The corporation further agrees to buy all or part of the farmers' half at a favorable price. The farm share will go from 50 to 55 per cent with the crop year of 1962-63—thus bearing out the corporation contention that the easiest way to keep farmers happy is to give them a larger share of the profits. Efficiency of TSC's part of the operation has made this possible.

As already indicated, TSC is much more than sugar. Its sprawling industrial complex includes such installations as:

* Nine alcohol distilleries—190,000 litres a day.

* Yeast plant—40 metric tons daily, biggest in the world.

* Bagasse board plant, utilizing cane waste—1,500,000 sheets of 4-foot by 8-foot building board annually.

* Particle board plant, a new product in which the cane waste is bonded with a resin, 12,500,000 board feet a year. The particle board can be made in thicknesses varying from a half inch to one and a half inches, whereas the bagasse board ranges from a sixteenth to one-quarter. This means the particle board should prove more useful in construction and in the making of fine furniture.

* Insecticide plant.

* Oil extraction installation which turns out peanut cake and oil.

* Pineapple cannery with capacity of 600,000 cases a year.

* Animal feed plant.

* Agricultural machinery and engineering office.

* Hog breeding station.

* Limestone quarry.

* Antibiotic laboratory (projected) in cooperation with the American Cynamid Corporation.

Taiwan Sugar Corporation could not have developed so rapidly and so successfully without revolutionary changes in cane growing. These have roughly increased yield by one third—from the 6 metric tons per hectare (2.471 acres) of 1950 to 8.9 metric tons in 1960. Additionally, the average cane-growing period was reduced from 18 to 14 months. Such gains are attributable to these measures:

Ratooning—This is a technical term for the growing of cane from the roots of the preceding crop. The growing period is shortened and labor saved in the preparation of seedlings and land. New planting accounts for 60 per cent of TSC cane output, ratooning for the other 40 per cent.

Inter-cropping with rice—The growing seasons for rice and cane partly overlap. By the time sugarcane is planted, the preceding rice crop is not yet ripe. But cane can be planted between the rows of the ripening rice crop one month before harvest. This practice is of special importance on Taiwan because of farmland shortage and has been adopted for a steadily increasing acreage.

Selection of varieties—In final analysis, this determines sugar yield. Varieties are introduced from other regions or obtained by local breeding. For example, F 134 is a locally bred variety, while the famous N: Co 310 was introduced from South Africa. Selection is based on adaptability of the va­riety to climate and soil, plus resistance to dis­ease, pests and typhoons. Selection and breed­ing are functions of the Tai wan Sugar Experimentation Station, which is known around the world. At present, N: Co 310 is planted in 90 per cent of cane acreage. A new variety, F 146, has been found adaptable and is being introduced.

Cultivation—Taiwan farm power pre­viously was provided by animals or humans. However, as the number of TSC tractors has multiplied, so has the acreage yield. The farmers' attitude also has undergone a change. Many of them contract for TSC preparation of their land with tractors.

Irrigation—TSC has divided its cane plantations and those of contract farmers into irrigation districts. Each has an irrigation system, including artesian wells and canals. Nearly 75,000 acres are under irrigation.

Fertilization—Like any other crop land, sugarcane acrage is subject to depletion. TSC has developed rotation of cane with legumi­nous crops. It also makes large quantities of dung manure, filter cake; bagasse and cuttings into compost. To meet the soil's hunger for nitrogen, phosphorus and potassium, TSC annually distributes 80,000 metric tons of am­monium sulfate, calcium cyanamide, muriate, potash and superphosphate to the plantations.

Disease and pest control—Cane is highly susceptible to a number of diseases and insects. Among the diseases, are Mosaic, red rot, cholrotic streak, leaf scourge, pineapple disease and downy mildew. The most dam­aging insects are the borer, the wooly aphis and the cane beetle. Prevention and treatment include TSC selection, of highly resistant varieties, protection of seedlings and applica­tion of insecticide and fungicide.

Technological improvements have been introduced at the 25 TSC mills. Equipment has been modernized, controls established and a rigid inspection system installed. A 10-year modernization program was begun in 1958 to bring the industry up to date and keep it that way.

Two varieties of sugar are produced: the superior white crystal type with a moisture content not exceeding 0.2 per cent, and raw sugar, which goes to the refineries of other countries for processing.

In its own processing, TSC uses both the methods of carbonation (12 mills) and defe­cation (17 mills). The procedures are roughly as follows:

Cane is cut and shredded, then crushed in a five-roller mill. I t is pressed three to four times until the juice has been extracted and only a course fibrous material remains. This material is bagasse, from which the pressed sheets and resinized particle board are made.

Juice of the cane is dark brown in color and contains mineral and gelatine impurities. It must be "clarified."

Defecation is the older, cheaper and less complicated method. Large amounts of hot lime are added to the juice. The lime sticks to the impurities and they sink to the bottom of the tanks. This method of clarification was invented by the Egyptians in early times.

In carbonation, juice is mixed with lime and carbon dioxide is then induced. The precipitate of the lime and carbon dioxide has strong absorption qualities and most of the impurities are thus removed. A sulphitation process further purifies the product.

Once clarification is complete, the juice is sent to evaporators for concentration into syrup. A chemical then is added to induce crystallization and the sugar is separated from the molasses by centrifuging. When dried, the sugar becomes the familiar sparkling sweetener of household use. Packing is by automatic machinery in sacks of 220 pounds. These are stored in warehouses or shipped to Kaohsiung or Keelung for export. TSC has warehouse capacity of 600,000 metric tons at the mills and the two ports.

Where does Taiwan's sugar go? To Japan, Korea, Hongkong, Malaya, Ceylon, Iran, Iraq and the Sudan. Markets have been expanded. The quality is good, the packaging strong, and deliveries prompt. Price, of course, is an international question—and foreign affairs playa considerable part in the sugar business. Developments in Cuba, for example, have affected TSC markets and prospects.

Not so long ago, the bagasse was discarded. Growth of bagasse board manufacturing has been important to Taiwan because of the need for a cheap construction material and because of the large amount of building that has been done in the 1950s and that will be continued through this decade. The bagasse board factory at Changhua opened in 1957, and the particle board plant at Kaohsiung began production only last July.

Yeast From Molasses

TSC laboratories are continuing to study the use of yeast as a food—especially in the light of warnings that Taiwan's population may outrun the food supply in the foreseeable future. The TSC yeast product now available is made from molasses. Human consumption is in the form of pills or an enriched broth. Animal food is made from the yeast mixed with potato chips and animal or fish meal. It is high in vitamin content and as cheap or cheaper than soybean cake. The hog­-raising project makes use of the molasses-yeast feed, and the hogs in turn produce manure for the fields.

The pineapple plant has built its export business to a point where it controls a third of the Taiwan total. Special effort has gone into the campaign for strict quality control. Previously, lack of such control had severely handicapped Taiwan's export efforts. The variety is the smooth cayenne also popular in Hawaii and Puerto Rico. Mountain and old stream wasteland has been utilized in pine­apple cultivation.

Another recent export has been technical knowhow. Hundreds of technicians—mostly from Southeast Asia—have studied in Taiwan fields, mills and by-products plants. TSC engineers and other experts have helped established foreign mills and get them into sugar production. Further missions are contemplated in Asia, Africa, and Latin America—not only helping provide more food and more employment, but making more friends for free China.

20 Million Rats Killed

Even pest control exceeds the manufacture of insecticide and its application in the field. Realizing that food losses to rats were heavy, and that rodents infest cane fields, a large­-scale eradication campaign was undertaken last year. More than 20 million rats were killed. The drive will be held annually, and Taiwan will have more food for people and less for scavengers.

TSC may not be all things to all people—but on Taiwan, it comes very close. The corporation, its employees and the government are hopeful that in time to come, a return to the mainland can take the TSC example to the hundreds of millions of peasants there and so make their life a better and happier one—just as has been done for the farmer of this island.

As for Taiwan itself, it is said that as goes TSC, so goes the island beautiful. It is good to report that TSC is going very well, and that prospects for the future are—to think in sugary terms—very sweet indeed.