Roti-bun maker targets 100 outlets by year-end
Asia Foods Connection Co Ltd - a Malaysian franchiser of PaPa Roti buns - plans to open 100 outlets by the end of the year.
Managing director Chachawal Daengbunga said yesterday that PaPa Roti, which entered the Thai market on February 26, already has five branches in Bangkok. The outlets at Siam Square and Future Park, Rangsit, are run by the company itself. The company has established its factory on Rama IV road. Though current production is hand-made, the company plans to invest an additional Bt10 million to import machines in the next few months as the number of franchisees increase. Current production is 60,000 buns per day with a maximum capacity of 80,000. The company expects to have 50 franchise outlets in Bangkok and another 50 in other parts of the country. Each outlet requires 25 square metres of space and an investment of Bt1.5-2 million. To reach breakeven point within three months, each outlet will have to sell up to 3,000 buns per day at Bt25 apiece. The company is also negotiating with a major fast-food chain to home-deliver its products to customers and expects to conclude the deal soon. At the same time, the company is creating a strategy to build greater awareness of the PaPa Roti brand with a Bt1-million marketing budget. One advertising ploy would be using a Mobile Unit with the PaPa Roti logo, which will travel around Bangkok. Since many Thai people perceive buns as an unhealthy food due to their oily ingredients, the company plans to promote its buns as a healthy option by providing a list of ingredients and their nutritive values on each package. The company expects to generate Bt150 million in sales by the year-end. Chachawal is not worried about PaPa Roti buns suffering the same fate as the short boom-and-bust phenomenon of "milk tea" in the last few years. "It depends on what players in the bun market do to extend the market in the long run," he said. "What ruined the "milk tea" life cycle was the aggressive expansion of franchisees without thinking about oversupply." Currently, the company has only coffee flavour but plans to launch another flavour within the next six months. Chachawal declined to reveal details. PaPa Roti has businesses in Malaysia, Singapore China, and Indonesia. It plans to penetrate South Korea, Philippines, and Vietnam. Asia Foods Connection was established in Thailand late last year with Bt3.6 million in registered capital.
Nitida Asawanipont The Nation
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