Amid the ongoing local economic and political difficulties that have reduced Thai consumers' purchasing power in regard to confectionery products, European Food yesterday announced this year's business strategy for expanding in both domestic and international markets.

Managing director Somchai Wachakorn said the company had set a very optimistic target to increase total sales almost 25 per cent this year to Bt2.4 billion.

"We raised our registered capital from Bt1.2 billion to Bt2.2 billion, and Bt600 million to Bt700 million of this has already been invested in the expansion and improvement of our production facilities on a 400-rai plot of land in Prachin Buri. Another Bt500 million of the raised capital has been reserved as working capital," said Somchai.

Somchai said that as part of the expansion, the company would launch at least seven new products this year that promised to shake up the Bt20-billion confectionery market.

"We'll launch our new products covering all categories, such as long-shelf-life cakes, wafers, candy and chewing gum," said Somchai, adding that the company would increase its marketing and advertising budget from Bt100 million last year to Bt150 million this year.

European Food, which currently controls 80 per cent of the Bt1-billion local market for long-shelf-life cakes, yesterday introduced its new Ellse butter-flavoured cake with white cream and raspberry jam. The product took almost a year to develop.

"We've set our business direction to focus on making excellent products and be the champion in this potential confectionery market.

"We want to grow further, both in domestic and international markets, through the expansion of distribution networks and brand building," said Somchai.

Somchai said the baht's appreciation had hit its confectionery products, making them more expensive in export markets.

However, the company will focus on improving efficiency in its production process, working procedures and staff aimed at reducing overall costs at least 4 per cent this year.

"We plan to increase our exports by Bt80 million this year, up from last year's total of Bt300 million," said Somchai, adding that the company exported to Indochina, Japan, Taiwan, China, the US and Europe.

"We also want to increase our ratio of exports to total revenues from the current 17 per cent to more than 25 per cent in the next five years," he said.

Somchai said the local confectionery market had enjoyed average annual growth of 10 per cent over the past decade.

However, due to economic factors like the rise in oil prices and interest rates and the political uncertainty, which have caused a decline in the spending power of Thai consumers, the market's growth had slowed to 5 to 6 per cent last year.

The company also predicted overall demand for confectionery products in the Kingdom this year would not be higher than last year.

Kwanchai Rungfapaisarn

The Nation