Australian food-supplement company Blackmores Ltd will maintain its retail prices although rising transportation costs and the strengthening baht have affected its import expenses.

The company said low tariff rates under the Thailand-Australia Free Trade Agreement (FTA) offset some of the increasing import costs.

Suphasin Klongnol, the company's local chief, said the firm's deliveries from Australia enjoyed an import tariff of 5 per cent below the normal rate.

For instance, vitamins are in general subject to a 10-per-cent duty and food supplements were charged 25-30 per cent. However, the Australian FTA, implemented in January 2005, cut import duties to 5 per cent and 20-25 per cent respectively.

However, the company's import costs had increased 8 per cent. Of that, 7 per cent derived from the stronger baht and the rest came from rising transport costs caused by higher fuel prices.

Richard Steinmetz, Blackmores' Australia-based international manager, said the company would continue to offer reasonable prices to customers.

The company expects its local sales to grow 15 per cent this year from Bt300 million last year.

Vitamins account for 81 per cent of sales and skincare products 9 per cent.

The company is hoping to force up its sales faster than the overall market, which is estimated to grow by 10 per cent.

An aggressive marketing policy will be used to promote products and there are a number of publicity events being planned for the rest of the year to drive up sales. The Thai vitamin market was worth Bt2 billion last year.

This year's advertising budget is Bt50 million, up 19 per cent from last year's budget of Bt42 million, Suphasin said.

One publicity event, Blackmores Bangkok-Sydney Mini Marathon, will start on July 23.

The run will celebrate the 54-year-old political and trading relationship between Thailand and Australia, he added.

Steinmetz said the event would encourage Thais to look after their health by exercising more, especially running.

Fourteen per cent of the Australian company's products were sold overseas last year.

The main markets are Southeast Asia, especially Thailand and Malaysia, the UK, Hong Kong and New Zealand.

Blackmores Ltd reported sales of 134 million Australian dollars (Bt3.8 billion) and a net profit of A$11.7 million in 2005.

Somluck Srimalee

The Nation