Srithai Foods Service, a producer of seasoning and food additives and provider of packaging services, yesterday announced it was spending Bt50 million on a new factory for tomato sauce and other seasoning products in Laos, to benefit from the cheaper labour offered by the Asean neighbour.

Located on a 66-rai plot in Vientiane, the factory is under construction and will start operation by the end of the year.

Managing director Vonchai Rungpuwapat said the factory would have double the production capacity of the existing facility in Thailand.

The new factory will help the company absorb the rising cost of manufacturing tomato sauce and other seasoning products at its plant in the Bang Pu Industrial Estate in Samut Prakan province. Costs rose almost 10 per cent last year.

"We'll use our production facility in Laos to export tomato sauce and other seasoning products like chilli sauce and salad sauce to markets such as Vietnam, China and Burma, as well as import back to Thailand to benefit from Afta [Asean Free Trade Area] privileges, under which import duty will be reduced to less than 5 per cent," said Vonchai.

He said the facility in Laos would help reduce the overall cost of producing seasoning products by almost 50 per cent. The new factory will benefit from cheap labour costs of only Bt40 a day, compared with the high cost in Thailand of Bt200 to Bt300.

"Our existing factory for seasoning products in the Bang Pu Industrial Estate has reached full production capacity at almost 300 million packets per annum. With the Vientiane facility, we'll reduce the production capacity for seasoning products at our Bang Pu factory and replace it with a 'co-packer' service provided to certain principal suppliers," said Vonchai.

Srithai Foods Service generated revenues of Bt300 million last year, of which 50 per cent was from seasoning products and 25 per cent from the co-packer business. The company expects to increase revenues at least 10 per cent this year. 

Kwanchai Rungfapaisarn

The Nation