CANNED FRUIT AND VEGETABLES
Del Monte sets up production hub
Samroiyod, Agripure join as local partners
SIAM MONTE'S new Bt400-million facility in Trat is the first in Asia producing Tetra Pak'Tetra Recart' packaging.
Del Monte, the US-based canned-food manufacturing giant, has picked Thailand as its production base for accessing the Asian market thanks to the country’s abundance of fruit and vegetables throughout the year.
Del Monte has established a joint venture with local sweet-corn producer Agripure Holdings, Japan’s Kikkoman Corp – a leading soy-sauce maker and sole licensee of Del Monte in Asia (except India and the Philippines) – and Samroiyod Corp, a major local pineapple-grower and exporter.
Siam Del Monte Co Ltd has been set up to operate the joint venture, in which Del Monte Asia Pte Ltd, a company wholly owned by Kikkoman, controls 75.1 per cent, Samroiyod holds 17.4 per cent, and the remaining 7.5 per cent is held by Agripure.
With a Bt400 million hi-tech plant that in Trat formally opened last Wednesday, Siam Del Monte has established Asia’s first manufacturing base for Tetra Pak’s latest packaging technology. The “Tetra Recart” retortable carton marks a move away from cans to paper boxes.
“It is our first foray into Asia,” said Andrew Cushman, managing director of Del Monte Asia.
He described the venture as one into which each partner will put its best resources. Samroiyod will chip in with its pineapples and other fruits, Agripure with its sweet corn, and Del Monte distributing it all.
Cushman, also the CEO of Siam Del Monte, said the venture’s objective was value-added production.
Initially, the firm will focus on sweet-corn soup, cream and pasta sauce. It plans also to make fruit cocktails, sauce and ready-to-eat foods.
The first lot of sweet-corn soup and cream will be exported to Hong Kong in April.
“Doing things in unison will consolidate our competitive advantage,” Cushman said.
“We chose Thailand as it seemed a good agricultural country with such fruits as rambutan and longan, and vegetables. There is also a 12-month growing cycle for fruit of top quality.”
Seaport facilities and investment privileges also add to the Kingdom’s commercial appeal, he said.
Tetra Recart packaging technology was being counted upon to enhance access to Australia, Taiwan and South Korea. The new technology should also serve as a barrier against counterfeit products, mainly found in China.
The new company’s sales are expected to hit Bt400 million this year, amid hopes that it will break even within the next four or five years.
Cushman said the government’s free-trade agreement (FTA) initiatives could benefit the company.
Cushman said Thailand should urge China to reduce its import tariffs on canned products. Thai finished goods have so far not benefited from the Thailand-China FTA’s early-harvest programme, with exports of canned products subject to an average import duty of 20 to 30 per cent.
Roj Burusratanabhand, president of River Kwai International Food Industry Co Ltd, the parent company of Agripure, said each partner in the new joint venture would make different products, exporting its own brands. Del Monte will help with the management, marketing and distribution.
River Kwai will start exporting to the Middle East and the European Union by the middle of the year.
Roj said the new square-shape Tetra packaging would make storage easier. It will be safe to handle with no sharp edges, and also easy to flatten for disposal. Made from renewable resources and being fully recyclable besides being hygienic, it will also ensure freshness.
Roj added that Siam Del Monte had conducted contract farming in nearby provinces, including Sa Kaew, Prachin Buri and Chanthaburi, growing sweet corn on 10,000 rai of land.
Pipaht Sukijpanenij, managing director of Samroiyod, said his company’s pineapple products would add variety to the joint venture’s offerings.