Diethelm, the distributor of Lego building bricks and mini-figures, expects its sales value to grow more than 15 per cent next year as it cashes in on higher demand for educational toys.
Chukiat Tokamolthum, a department manager, said parents were more willing to pay for such toys, which pushes the segment's growth rate beyond others in the industry.
The economic slowdown has affected the overall Thai toy market, whose value will be unchanged at Bt10 billion this year. However, the educational toy segment has shown growth, he said.
"Parents believe educational toys will enhance the mental and physical growth of their children," he added.
Educational toys are in the premium segment, for which annual sales are about Bt1 billion. Lego has a 15-per-cent share of the premium market, while the overall educational toy share in the segment is expected to rise from 35 per cent last year to 45 per cent this year.
He said Lego had witnessed 10-per-cent sales growth in the first eight month, but the annualised growth rate would be 15 per cent.
"The growth of Lego in Thailand has reflected consumer's behaviour. They now realise that Lego is a brand of toy that helps improve children's skills. This is the same trend in developed countries in Europe," he added.
Chukiat said that unlike educational toys, other products in the premium segment faced a reduction in sales. The share of boys' toy has fallen to 25 per cent from 35 per cent last year, while that of toys from China has decreased to 5 per cent from 10 per cent.
The trend has convinced Diethelm that sales growth will be no less than 15 per cent this year, despite negative factors such as political turmoil, the economic crisis and the H1N1 flu.
Diethelm allocated Bt20 million this year for marketing activities to boost sales and brand awareness.
Monday, September 28, 2009
CP brings village model to China
Charoen Pokphand Group plans to develop three integrated poultry layer farms in selected villages in China where it will likely apply its successful agricultural village management model, especially that of Nong Wah village in Thailand.
The Thai conglomerate entered into a contract with Beijing two years ago to help modernise China's farm sector and promote integrated farming businesses there.
CP Group chairman Dhanin Chearavanont said the group planned to raise about 3 million layers in each integrated egg-laying farm. Each site would also have a chicken-feed production plant and a processing plant for higher-value egg-based products such as powdered and liquid eggs for the food industry.Chicken manure would be used as fertiliser.
"Other necessary facilities will include conveyors to load eggs from farms to processing units to avoid human handling of the products," he said. He did not give specific locations and investment capital involved.
CP Group, Thailand's largest agribusiness group, was the first foreign investor in China. It has invested billions of dollars over three decades in several ventures including shopping malls, the poultry industry, animal feed and motorcycle plants.
Its successful farm operations attracted attention from Chinese officials, who are promoting a programme worth 100 billion renminbi involving four parties:farmers, CP, the China Development Bank and Chinese authorities, CP vicechairman Thanakorn Seriburi said recently.
The programme is to be carried out in some villages in Anhui, Shanxi, Henan,Hunan, Hubei, Jiangxi and Jilin provinces.
Over the past two years, a number of delegations of Chinese authorities have visited farm villages supported by CP,and the Nong Wah agricultural village in Chachoengsao has become an impressive prototype, according to another CP executive.
The Nong Wah project was initiated 30 years ago by Bangkok Bank, CP and the villagers. Each villager was allocated 24 rai, a house, pig breeders and proper facilities to raise pigs with guidance from the company, while bank staff helped train them to manage finances effectively.
After 30 years, villagers were able to repay debts and run the village on their own under the Nong Wah Agricultural Village Company.
According to Mr Dhanin, CP has no plan for further investments in poultry farms, especially layer operations in Thailand. But China continues to hold great business potential given its 1.3 billion population."Excessive investments [in Thailand] would create an oversupply and bring down egg prices, which would definitely affect farmers," he said at a recent seminar on the outlook for the livestock industry, held by the Alumni of the Faculty of Veterinary Science of the Chulalongkorn University Association, and the Animal Health Products Association.
He also encouraged Thai livestock companies to expand investment abroad to tap into growing meat demand.
While CP has a number of investments in livestock in several countries, production remains low when compared with domestic demands."Our operation in Russia has a capacity to raise as many as one million pigs a year but the volume is still far below domestic demand of 16 million pigs," he said.
CP's pig investment in China, while also sizeable, accounts for a mere 6% of the Chinese market, which produces about 46 million tonnes of pork per year.
Enlarged farm sizes, high-quality breeds and stronger marketing were the factors that would improve the Thai livestock business in the future, Mr Dhanin added.
The Thai conglomerate entered into a contract with Beijing two years ago to help modernise China's farm sector and promote integrated farming businesses there.
CP Group chairman Dhanin Chearavanont said the group planned to raise about 3 million layers in each integrated egg-laying farm. Each site would also have a chicken-feed production plant and a processing plant for higher-value egg-based products such as powdered and liquid eggs for the food industry.Chicken manure would be used as fertiliser.
"Other necessary facilities will include conveyors to load eggs from farms to processing units to avoid human handling of the products," he said. He did not give specific locations and investment capital involved.
CP Group, Thailand's largest agribusiness group, was the first foreign investor in China. It has invested billions of dollars over three decades in several ventures including shopping malls, the poultry industry, animal feed and motorcycle plants.
Its successful farm operations attracted attention from Chinese officials, who are promoting a programme worth 100 billion renminbi involving four parties:farmers, CP, the China Development Bank and Chinese authorities, CP vicechairman Thanakorn Seriburi said recently.
The programme is to be carried out in some villages in Anhui, Shanxi, Henan,Hunan, Hubei, Jiangxi and Jilin provinces.
Over the past two years, a number of delegations of Chinese authorities have visited farm villages supported by CP,and the Nong Wah agricultural village in Chachoengsao has become an impressive prototype, according to another CP executive.
The Nong Wah project was initiated 30 years ago by Bangkok Bank, CP and the villagers. Each villager was allocated 24 rai, a house, pig breeders and proper facilities to raise pigs with guidance from the company, while bank staff helped train them to manage finances effectively.
After 30 years, villagers were able to repay debts and run the village on their own under the Nong Wah Agricultural Village Company.
According to Mr Dhanin, CP has no plan for further investments in poultry farms, especially layer operations in Thailand. But China continues to hold great business potential given its 1.3 billion population."Excessive investments [in Thailand] would create an oversupply and bring down egg prices, which would definitely affect farmers," he said at a recent seminar on the outlook for the livestock industry, held by the Alumni of the Faculty of Veterinary Science of the Chulalongkorn University Association, and the Animal Health Products Association.
He also encouraged Thai livestock companies to expand investment abroad to tap into growing meat demand.
While CP has a number of investments in livestock in several countries, production remains low when compared with domestic demands."Our operation in Russia has a capacity to raise as many as one million pigs a year but the volume is still far below domestic demand of 16 million pigs," he said.
CP's pig investment in China, while also sizeable, accounts for a mere 6% of the Chinese market, which produces about 46 million tonnes of pork per year.
Enlarged farm sizes, high-quality breeds and stronger marketing were the factors that would improve the Thai livestock business in the future, Mr Dhanin added.
Unilever pays $1.8bn for Sara Lee brands
The consumer goods giant Unilever agreed yesterday to pay 1.275 billion ($1.87 billion) for Sara Lee's personal-care brands like Sanex and Radox to reinforce its global lead in deodorants and skin cleansing.
The Anglo-Dutch Unilever Plc/NV is buying a business with 85% of its sales in Europe, while Sara Lee will now look to sell its household goods business separately as it launched a $1 billion share buyback programme.
The deal marks the first major acquisition for Unilever's new chief executive Paul Polman, while Sara Lee's CEO Brenda Barnes is now half-way through a planned sell-off of non-core business aimed at focusing the US group on food and drink.
"The Sara Lee brands enjoy strong consumer recognition, offer significant growth potential and are an excellent fit with Unilever's existing business," said Polman in a statement.
Unilever says Sanex, Radox and also Duschdas brands will complement its Dove, Axe and Rexona at slightly lower prices and strengthen its European business in key markets such as Britain, the Netherlands, Germany, France, Spain,Italy and Denmark.
Sara Lee said the brands sold accounted for 55% of the profits from its businesses up for sale, and added it had seen significant interest in its household brands including Ambi Pur air fresheners,Kiwi shoe polish, Vapona insecticides and its non-European cleaning brands.
"We intend to use proceeds from the divestiture to invest for growth in our core business and to repurchase stock,"Barnes said in a Sara Lee statement.
The US group also reiterated that it intended to maintain its current quarterly dividend of 11 cents for the next four quarters regardless of the timing of disposals.
Credit Suisse analyst Charlie Mills said the price Unilever was paying of 10 times core operating profit, or EBITDA,"is not huge by industry standards which reflects the fairly disparate collection of assets which also include Brylcream hair gel.
"We're not convinced that this is the greatest collection of assets but another acquisition shows Unilever still moving from the back foot (cost cutting and disposals) to the front foot (volume growth and acquisitions)," he said.
Sara Lee put its household and personal-care business up for sale earlier this year, and it was expected by analysts to break up the wide-ranging business to make a sell-off easier.
The Sara Lee brands being acquired by Unilever generated annual sales in excess of 750 million with EBITDA of 128 million for the year ending June 2009. The overall Sara Lee business up for sale had annual sales of 1.5 billion.The deal is subject to regulatory approval and consultation with European employee works councils.
The Anglo-Dutch Unilever Plc/NV is buying a business with 85% of its sales in Europe, while Sara Lee will now look to sell its household goods business separately as it launched a $1 billion share buyback programme.
The deal marks the first major acquisition for Unilever's new chief executive Paul Polman, while Sara Lee's CEO Brenda Barnes is now half-way through a planned sell-off of non-core business aimed at focusing the US group on food and drink.
"The Sara Lee brands enjoy strong consumer recognition, offer significant growth potential and are an excellent fit with Unilever's existing business," said Polman in a statement.
Unilever says Sanex, Radox and also Duschdas brands will complement its Dove, Axe and Rexona at slightly lower prices and strengthen its European business in key markets such as Britain, the Netherlands, Germany, France, Spain,Italy and Denmark.
Sara Lee said the brands sold accounted for 55% of the profits from its businesses up for sale, and added it had seen significant interest in its household brands including Ambi Pur air fresheners,Kiwi shoe polish, Vapona insecticides and its non-European cleaning brands.
"We intend to use proceeds from the divestiture to invest for growth in our core business and to repurchase stock,"Barnes said in a Sara Lee statement.
The US group also reiterated that it intended to maintain its current quarterly dividend of 11 cents for the next four quarters regardless of the timing of disposals.
Credit Suisse analyst Charlie Mills said the price Unilever was paying of 10 times core operating profit, or EBITDA,"is not huge by industry standards which reflects the fairly disparate collection of assets which also include Brylcream hair gel.
"We're not convinced that this is the greatest collection of assets but another acquisition shows Unilever still moving from the back foot (cost cutting and disposals) to the front foot (volume growth and acquisitions)," he said.
Sara Lee put its household and personal-care business up for sale earlier this year, and it was expected by analysts to break up the wide-ranging business to make a sell-off easier.
The Sara Lee brands being acquired by Unilever generated annual sales in excess of 750 million with EBITDA of 128 million for the year ending June 2009. The overall Sara Lee business up for sale had annual sales of 1.5 billion.The deal is subject to regulatory approval and consultation with European employee works councils.
Thursday, September 24, 2009
FOCUS ON GREEN PRODUCTION, MARKETING
To help curb global warming, Betagro Group has been concentrating on making its businesses eco-friendly by applying green manufacturing technology and green marketing, which not only save production costs but also boost sales.
Betagro, through is subsidiary B International and Technology, yesterday launched Kooling Max, a biodegradable cleaning product for the livestock industry made mainly from natural materials such as citric acid in lemons.
Rising global concerns over the environment and consumption have prompted the group to focus more on green manufacturing. This will also allow the company to engage more in health-conscious markets.
Nopporn Vayuchote, group executive vice president, said the product is another development step of the group to green its business since it started focusing on the issue more than 20 years ago.
The product makes use of an innovative electrolytic cleaning method for ventilation systems that produces no harmful wastewater discharge and has no harmful effects on the environment.
The product is estimated to help reduce production costs by about 2 per cent and imported paper to produce cooling pads by 30 per cent.
"We have to catch up with the rising global environmental-friendly trend so that all materials entering our supply chain should also be 'green' to promote our green marketing strategy," Nopporn said.
Cherdchai Sinsarng, general manager of B International and Technology, said the product had been under development for more than two years to ensure its quality. Its special feature is helping to maintain the temperature of the chilled water for longer than normal while reducing water wastage.
It will allow greater ventilation efficiency to reduce not only electricity costs but also chicken deaths. It will reduce maintenance costs of related farm equipment used to smooth the operation of the evaporative cooling farm system. And it reduces the scale problem on cooling pads, gates and foot valves and pipes in the system.
B International expects the new product's sales will reach Bt15 million next year.
Using Kooling Max will cost a standard 140-metre-long farm with 20,000 chickens only Bt2,000 per crop cycle of about 40 days.
The product will be exported to Bangladesh, Burma, Sri Lanka, Pakistan, Vietnam, Laos and Cambodia - the traditional markets for the company's farm equipment.
The company focuses on livestock engineering goods and related products. It targets sales of Bt300 million this year. Total revenue of the group is set to increase 10-15 per cent to Bt50 billion this year, he added.
Nopporn said the group is also preparing a manufacturing model for ready-to-eat foods such as sandwiches, steamed pork and pork leg with pork and chicken as their base material.
The customer target will be the institutional food service market rather than the retail market. The product will be sold under the Better Food brand.
"We are not experts in the retail business but we have experience in catering, cooking technology and shop decoration so we have to focus on our strength," Nopporn said.
Betagro, through is subsidiary B International and Technology, yesterday launched Kooling Max, a biodegradable cleaning product for the livestock industry made mainly from natural materials such as citric acid in lemons.
Rising global concerns over the environment and consumption have prompted the group to focus more on green manufacturing. This will also allow the company to engage more in health-conscious markets.
Nopporn Vayuchote, group executive vice president, said the product is another development step of the group to green its business since it started focusing on the issue more than 20 years ago.
The product makes use of an innovative electrolytic cleaning method for ventilation systems that produces no harmful wastewater discharge and has no harmful effects on the environment.
The product is estimated to help reduce production costs by about 2 per cent and imported paper to produce cooling pads by 30 per cent.
"We have to catch up with the rising global environmental-friendly trend so that all materials entering our supply chain should also be 'green' to promote our green marketing strategy," Nopporn said.
Cherdchai Sinsarng, general manager of B International and Technology, said the product had been under development for more than two years to ensure its quality. Its special feature is helping to maintain the temperature of the chilled water for longer than normal while reducing water wastage.
It will allow greater ventilation efficiency to reduce not only electricity costs but also chicken deaths. It will reduce maintenance costs of related farm equipment used to smooth the operation of the evaporative cooling farm system. And it reduces the scale problem on cooling pads, gates and foot valves and pipes in the system.
B International expects the new product's sales will reach Bt15 million next year.
Using Kooling Max will cost a standard 140-metre-long farm with 20,000 chickens only Bt2,000 per crop cycle of about 40 days.
The product will be exported to Bangladesh, Burma, Sri Lanka, Pakistan, Vietnam, Laos and Cambodia - the traditional markets for the company's farm equipment.
The company focuses on livestock engineering goods and related products. It targets sales of Bt300 million this year. Total revenue of the group is set to increase 10-15 per cent to Bt50 billion this year, he added.
Nopporn said the group is also preparing a manufacturing model for ready-to-eat foods such as sandwiches, steamed pork and pork leg with pork and chicken as their base material.
The customer target will be the institutional food service market rather than the retail market. The product will be sold under the Better Food brand.
"We are not experts in the retail business but we have experience in catering, cooking technology and shop decoration so we have to focus on our strength," Nopporn said.
Betagro to sell green products
Betagro Group, one of Thailand's leading food producers and exporters, has enhanced its green profile by forming a partnership to market energy-saving products for the livestock industry in local and export markets.
B. International and Technology Co,a unit of Betagro, yesterday entered an agreement to exclusively distribute Kooling Max, a liquid product from Earth Concept Co, a Thai manufacturer and distributor of natural cleaning materials.
Used with a cooling pad in the ventilation system at livestock farms, Kooling Max lowers temperatures, thereby cutting water consumption, electricity bills and animal mortality, said Cherdchai Sinsarng, general manager of B. International and Technology Co.
"At an experimental test, the capacity would bring down operating costs for chicken by 0.50 baht per kilogramme,or 2% to 3% over about six weeks of raising," he said.
B. International plans to sell about 20,000 litres of Kooling Max next year to earn about 15 million baht in revenue.
Although this is a minor contribution to the company's expected revenue of more than 300 million baht this year, B.International sees good prospects for the product from the strong growth in the livestock industry in Thailand and many Asian countries.
The company plans to tap this growth by distributing the product abroad together with other farm product ranges,such as ventilation controllers, cooling pads and silo weighing scales.
Many Asian countries have made substantial investments in livestock businesses to meet growing domestic and export demand, said Nopporn Vayuchote, Betagro Group's executive vicepresident.
Neighbouring countries' many recent investments in raising chicken and swine feature advanced equipment and technologies - especially in Vietnam, where Indonesian investors have set up a giant modern pig farm business, he said.
Kooling Max will reduce energy use in line with a green marketing concept and conform with international rules on animal welfare, he said.
The product has been warmly welcomed by big farm operators including Charoen Pokphand Group, and the resulting energy savings would raise the competitiveness of the Thai livestock industry, he said.
Betagro Group expects its sales this year to increase to 50 billion baht from 45 billion in 2008.
The company plans to inject about 3 billion baht next year into projects including setting up more Betagro Shop outlets, due to reach 50 stores by the year-end, and new investments in readyto-eat food.
B. International and Technology Co,a unit of Betagro, yesterday entered an agreement to exclusively distribute Kooling Max, a liquid product from Earth Concept Co, a Thai manufacturer and distributor of natural cleaning materials.
Used with a cooling pad in the ventilation system at livestock farms, Kooling Max lowers temperatures, thereby cutting water consumption, electricity bills and animal mortality, said Cherdchai Sinsarng, general manager of B. International and Technology Co.
"At an experimental test, the capacity would bring down operating costs for chicken by 0.50 baht per kilogramme,or 2% to 3% over about six weeks of raising," he said.
B. International plans to sell about 20,000 litres of Kooling Max next year to earn about 15 million baht in revenue.
Although this is a minor contribution to the company's expected revenue of more than 300 million baht this year, B.International sees good prospects for the product from the strong growth in the livestock industry in Thailand and many Asian countries.
The company plans to tap this growth by distributing the product abroad together with other farm product ranges,such as ventilation controllers, cooling pads and silo weighing scales.
Many Asian countries have made substantial investments in livestock businesses to meet growing domestic and export demand, said Nopporn Vayuchote, Betagro Group's executive vicepresident.
Neighbouring countries' many recent investments in raising chicken and swine feature advanced equipment and technologies - especially in Vietnam, where Indonesian investors have set up a giant modern pig farm business, he said.
Kooling Max will reduce energy use in line with a green marketing concept and conform with international rules on animal welfare, he said.
The product has been warmly welcomed by big farm operators including Charoen Pokphand Group, and the resulting energy savings would raise the competitiveness of the Thai livestock industry, he said.
Betagro Group expects its sales this year to increase to 50 billion baht from 45 billion in 2008.
The company plans to inject about 3 billion baht next year into projects including setting up more Betagro Shop outlets, due to reach 50 stores by the year-end, and new investments in readyto-eat food.
Tuesday, September 15, 2009
CP'S NEW FACILITY GIVES RICE PRIDE OF PLACE
CP Trading Group plans to establish a Bt3.5-billion rice processing and trading facility in Ayutthaya province to ensure "single-standard quality" and facilitate future expansion.
Set to be complete next year, the centre will be located on about 550 rai and will include the group's third rice processing and packing plant, with a total capacity of 1.08 million tonnes. Rice will be directly shipped from a river port nearby and an inland container depot.
CP Trading's head office will be moved to the location from Bangkok, but a Bangkok office will be maintained as a business coordination unit. Started in 2007, the project is aimed at positioning the rice trade as the firm's core business.
Prasit Damrongchietanon, chief executive officer of CP Trading Group, said completion of the project will boost the group's rice production capacity to 2.5 million tonnes.
The firm already has two processing facilities in Ayutthaya and Pathum Thani and three rice mills in Buri Ram, Kamphaeng Phet and Suphan Buri.
Prasit said the group's total rice trade volume is forecast to reach 1 million tonnes this year, with exports and domestic sales contributing 50 per cent each.
"CP Group has focused on rice, developing the necessary fundamentals to ensure this business milestone is reached and strengthening the group's competitiveness," Prasit said.
CP Trading Group manages its rice trading through CP Intertrade, its marketing arm, and markets the rice under the Royal Umbrella brand. The brand is ranked as the country's fifth-biggest export product, with total volume of 600,000 tonnes worth Bt9 billion shipped last year. However, this is forecast to drop to 500,000 tonnes, worth Bt8.5 billion, this year in line with the slowdown in the country's overall rice exports.
Sumeth Laomoraphorn, president of CP Intertrade, said the company exported 265,591 tonnes of rice worth Bt6.3 billion during the first seven months of this year.
The company's domestic rice sales are projected to reach 530,000 tonnes worth Bt11.8 billion this year. Its total sales reached 287,644 tonnes of rice worth Bt7.15 billion in the first eight months.
The Kingdom's total rice exports are expected to reach 8.5 million to 8.7 million tonnes this year.
Prasit said CP Trading Group has had to prepare a new rice-business plan to cope with increased competition from both existing traders and newcomers. However, the business still has room for growth in the areas of bagged rice and value-added rice products, he said.
The tougher competition, however, will have a positive impact on the industry, Prasit said, as it will force traders to improve the quality of their rice and to develop new marketing strategies. The rapid expansion of modern-trade channels in Thailand has been a key factor in the switch to bagged rice, which has become popular among consumers, he said.
The rice business is now managed
by a young generation of highly
educated executives who have em-braced modern-trade models to boost
sales, Prasit said. This has not only widened market opportunities but
also led to rapid changes in trading
patterns, as well as business diversification.
"The Kingdom's major rice exporters are not the established traders of old, but newcomers formed by small local rice traders and millers," Prasit said, noting, however, that quality is still the most important factor.
Prasit said CP Trading Group is considering looking for business partners to launch new rice products. This strategy, he said, will support the group's goal of achieving complete upstream-through-downstream production.
The company is also considering a plan to list on the Stock Exchange of Thailand, he said.
Set to be complete next year, the centre will be located on about 550 rai and will include the group's third rice processing and packing plant, with a total capacity of 1.08 million tonnes. Rice will be directly shipped from a river port nearby and an inland container depot.
CP Trading's head office will be moved to the location from Bangkok, but a Bangkok office will be maintained as a business coordination unit. Started in 2007, the project is aimed at positioning the rice trade as the firm's core business.
Prasit Damrongchietanon, chief executive officer of CP Trading Group, said completion of the project will boost the group's rice production capacity to 2.5 million tonnes.
The firm already has two processing facilities in Ayutthaya and Pathum Thani and three rice mills in Buri Ram, Kamphaeng Phet and Suphan Buri.
Prasit said the group's total rice trade volume is forecast to reach 1 million tonnes this year, with exports and domestic sales contributing 50 per cent each.
"CP Group has focused on rice, developing the necessary fundamentals to ensure this business milestone is reached and strengthening the group's competitiveness," Prasit said.
CP Trading Group manages its rice trading through CP Intertrade, its marketing arm, and markets the rice under the Royal Umbrella brand. The brand is ranked as the country's fifth-biggest export product, with total volume of 600,000 tonnes worth Bt9 billion shipped last year. However, this is forecast to drop to 500,000 tonnes, worth Bt8.5 billion, this year in line with the slowdown in the country's overall rice exports.
Sumeth Laomoraphorn, president of CP Intertrade, said the company exported 265,591 tonnes of rice worth Bt6.3 billion during the first seven months of this year.
The company's domestic rice sales are projected to reach 530,000 tonnes worth Bt11.8 billion this year. Its total sales reached 287,644 tonnes of rice worth Bt7.15 billion in the first eight months.
The Kingdom's total rice exports are expected to reach 8.5 million to 8.7 million tonnes this year.
Prasit said CP Trading Group has had to prepare a new rice-business plan to cope with increased competition from both existing traders and newcomers. However, the business still has room for growth in the areas of bagged rice and value-added rice products, he said.
The tougher competition, however, will have a positive impact on the industry, Prasit said, as it will force traders to improve the quality of their rice and to develop new marketing strategies. The rapid expansion of modern-trade channels in Thailand has been a key factor in the switch to bagged rice, which has become popular among consumers, he said.
The rice business is now managed
by a young generation of highly
educated executives who have em-braced modern-trade models to boost
sales, Prasit said. This has not only widened market opportunities but
also led to rapid changes in trading
patterns, as well as business diversification.
"The Kingdom's major rice exporters are not the established traders of old, but newcomers formed by small local rice traders and millers," Prasit said, noting, however, that quality is still the most important factor.
Prasit said CP Trading Group is considering looking for business partners to launch new rice products. This strategy, he said, will support the group's goal of achieving complete upstream-through-downstream production.
The company is also considering a plan to list on the Stock Exchange of Thailand, he said.
Sunday, September 13, 2009
CP keeps pace in rice market
CP International Trading Business Group, a unit of Charoen Pokphand Group, has beefed up its rice business to cash in on growing local packed rice sales and cope with mounting market competition from new players.
The group will start operation next March on its new rice processing plant in Ayutthaya province, which it calls the most advanced rice facility in Asia,built for more than one billion baht.
The new plant will add another 1.08 million tonnes of milled rice and bring the company's rice production capacity to nearly two million tonnes a year,said Prasit Damrongchietanon, CEO of CP Intertrade.
The plant was part of a 3.5-billionbaht project that also includes a river port, inland container depot and a new head office for CP Intertrade in the same compound.
The additional volume should help the company enlarge its market share in packed rice sales and improve export volume from 500,000 tonnes in 2008.
"We sold about 500,000 tonnes of rice locally last year through modern trade [stores]. The volume ranked us as market leader even though it only accounted for a 6% share of rice distributed via this channel," he said.
CP Intertrade also exported about 500,000 tonnes last year and the rice business was a main contributor to the company's 22 billion baht in revenue last year.
Based on figures from the Thai Rice Packers Association, local rice consumption is estimated at 8-9 million tonnes a year, with most sold in traditional markets and nearly one million tonnes sold through modern trade stores.
The association estimated the value of the packed rice market at about 20 billion baht a year, but expects it to rise substantially following rapid urbanisation. High margins on bagged rice have lured new players to enter the market in recent years despite the presence of more than 100 packers.
Boonrawd Brewery Group is reportedly teaming up with one of the country's largest rice traders and exporters, Asia Golden Rice Co. If the venture materialises, the strong distribution network of Singha beer could create a serious contender.
Mr Prasit shrugged off the possible entry of Boonrawd.
"The packed rice market is still very virgin and can grow further, considering only 800,000 to 900,000 tonnes compete in modern trade stores," he said.
Consumers will consider product quality and brands more in the future,and they will require a product that is traceable, he added.
In order to remain the market leader,CP Intertrade earmarked 150 million baht for marketing this year to promote rice sales under the Royal Umbrella brand.
The group will start operation next March on its new rice processing plant in Ayutthaya province, which it calls the most advanced rice facility in Asia,built for more than one billion baht.
The new plant will add another 1.08 million tonnes of milled rice and bring the company's rice production capacity to nearly two million tonnes a year,said Prasit Damrongchietanon, CEO of CP Intertrade.
The plant was part of a 3.5-billionbaht project that also includes a river port, inland container depot and a new head office for CP Intertrade in the same compound.
The additional volume should help the company enlarge its market share in packed rice sales and improve export volume from 500,000 tonnes in 2008.
"We sold about 500,000 tonnes of rice locally last year through modern trade [stores]. The volume ranked us as market leader even though it only accounted for a 6% share of rice distributed via this channel," he said.
CP Intertrade also exported about 500,000 tonnes last year and the rice business was a main contributor to the company's 22 billion baht in revenue last year.
Based on figures from the Thai Rice Packers Association, local rice consumption is estimated at 8-9 million tonnes a year, with most sold in traditional markets and nearly one million tonnes sold through modern trade stores.
The association estimated the value of the packed rice market at about 20 billion baht a year, but expects it to rise substantially following rapid urbanisation. High margins on bagged rice have lured new players to enter the market in recent years despite the presence of more than 100 packers.
Boonrawd Brewery Group is reportedly teaming up with one of the country's largest rice traders and exporters, Asia Golden Rice Co. If the venture materialises, the strong distribution network of Singha beer could create a serious contender.
Mr Prasit shrugged off the possible entry of Boonrawd.
"The packed rice market is still very virgin and can grow further, considering only 800,000 to 900,000 tonnes compete in modern trade stores," he said.
Consumers will consider product quality and brands more in the future,and they will require a product that is traceable, he added.
In order to remain the market leader,CP Intertrade earmarked 150 million baht for marketing this year to promote rice sales under the Royal Umbrella brand.
Wednesday, September 2, 2009
Loxley Property eyes IT centre
Loxley Property Development has spent Bt100 million on remodelling its vacant office building on Sua Pa Road into a modern IT wholesale centre. The company awarded a three-year contract to experienced rentsal space developer VMVK Service to manage the area in the building, which was named VM Sua Pa.
Suroj Lamsam , managing director of Loxiey Property, said the company was seeking t squeeze more income from its assets.
"We're developing the project right now despite the unfavourable economic climate. if we had decided to wait for the economy to get better and then begin to develop it, it would be too late," he added.
Loxley Property made almost Bt100 million in revenue per year. It is whjolly owned by one of the country 's major trading houses, Loxley.
The first phase of the VM Sua Pa centre will opoen in September 15, covering the first two floors and one mezzanine floor.
VMVK managing director Kullawut viratmalee said the firs phase was already fully booked with over 100 tenants. The final phase, which will cover the remaining third, fourth and fifth floors, is expected to open in two months. The centre is expected to generate Bt3 million monthly revenue when the full phase is launched. Loxley Property expects the project to break even in three years.
The whole centre features 3,800 square metres and can accommodate over 200 shops. Monthly rent ranges from Bt2,000 per square metre per month to Bt7,000.
The VM Sua Pa building had been the head office of Loxley Group since 1945 before the head office moved to the Khlong Toei building in 1995.After that Loxley's subsidiaries moved into the buklding but they all moved out recently.
Suroj Lamsam , managing director of Loxiey Property, said the company was seeking t squeeze more income from its assets.
"We're developing the project right now despite the unfavourable economic climate. if we had decided to wait for the economy to get better and then begin to develop it, it would be too late," he added.
Loxley Property made almost Bt100 million in revenue per year. It is whjolly owned by one of the country 's major trading houses, Loxley.
The first phase of the VM Sua Pa centre will opoen in September 15, covering the first two floors and one mezzanine floor.
VMVK managing director Kullawut viratmalee said the firs phase was already fully booked with over 100 tenants. The final phase, which will cover the remaining third, fourth and fifth floors, is expected to open in two months. The centre is expected to generate Bt3 million monthly revenue when the full phase is launched. Loxley Property expects the project to break even in three years.
The whole centre features 3,800 square metres and can accommodate over 200 shops. Monthly rent ranges from Bt2,000 per square metre per month to Bt7,000.
The VM Sua Pa building had been the head office of Loxley Group since 1945 before the head office moved to the Khlong Toei building in 1995.After that Loxley's subsidiaries moved into the buklding but they all moved out recently.
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