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Published on January 30, 2008

Prantalay Marketing, a leader in ready-to-eat meals, will raise its export prices, which is quoted in US dollars, if the baht strengthens further against the greenback, says a senior executive.

The baht is likely to rise, because the central bank is expected to lift exchange controls on the currency, which was enforced last year to keep it weak.

Meanwhile, Export-Import Bank of Thailand chairman Narongchai Akrasanee said the baht's appreciation could make local products a bit more expensive.

Anurat Khokasai, chief marketing officer and chief operations officer at Prantalay Marketing, yesterday said the baht was predicted to peak at 31.50 to the dollar this year, because the new government wants to end such capital controls as the 30-per-cent withholding requirement for cash brought into the Kingdom.

Narongchai urged the new prime minister, the new finance minister and the Bank of Thailand (BOT) governor to work closely together to monitor its rise.

They must make sure the baht will not increase more than 5-7 per cent against the greenback, he said.

Narongchai also urged the central bank to set up sovereign funds to invest abroad as one way of reducing pressure on the local currency.

The BOT could use part of its huge reserves to make higher-risk, higher-return investments, he said.

It could use $50 billion to $70 billion (Bt1.65 trillion to Bt2.31 trillion) to buy into such investments. Also, it should spend $30 billion to back up money in circulation.

The current international reserves, worth about $100 billion, are large enough to do that, he said.

Anurat said he was concerned the baht's strength could affect exports to the US.

"I believe the baht will appreciate once currency controls are lifted. Although the BOT announced cutting interest rates soon after the US rate cut of 75 basis points last week, that may not be enough to curb speculation," Anurat said.

Also yesterday, Prantalay Marketing announced it recorded Bt1.04 billion worth of sales last year. It expects sales growth this year to surge 15.38 per cent to Bt1.2 billion.

Ninety per cent of the firm's sales revenue comes from exports and 10 per cent from local sales. The US is the largest market for the company, accounting for more than 40 per cent of its sales revenue.

Prantalay Marketing expects to increase sales to the US 15 per cent this year despite the rising baht and an expected drop in US consumption as a result of its credit crisis.

Anurat is in favour of extending capital controls to curb foreigners from speculating in the baht.

With higher oil prices and rising costs of raw materials, the company needs to increase prices 10-15 per cent this year, he said. It already increased the price of some products last year.

Its fish-porridge menu price rose 15 per cent, as the price of fish has surged from an average of Bt85 per kilogram to Bt125.

To maintain its position as the Kingdom's top exporter of ready-to-eat meals, Prantalay will launched many projects to promote its sales this year.

The firm yesterday signed a contract with Shri Shaki, the top Indian firm that owns the Radisson Group, to establish a joint venture called Indo-Thai. It will serve as a marketing arm for the company to sell Prantalay products in India via 11 outlets.

Anurat said the firm expected about Bt100 million in sales this year in India and planned to introduce the ready-to-eat products to hajj pilgrims in Mecca this year.

Prantalay Marketing has earmarked Bt30 million to promote its products locally this year using the "Healthy Food with Innovation" concept.

That amount could be increased by mid-year if competition proves too fierce, Anurat said.

Prantalay enjoys about a 30-per-cent share of the Bt2-billion ready-to-eat-meal market. The Charoen Pokphand Group and S&P are the second- and third-largest brands, respectively, at 25 per cent each.

Thailand now has about 16 ready-to-eat enterprises. More players, such as big retailers, will enter the fray this year.

Thirty-five per cent of company revenue comes from ready-to east frozen seafood, 32 per cent from ready-to-cook seafood and the rest from sushi.

Petchanet Pratruangkrai

The Nation