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Published on February 22, 2008

At the same time, it is doubling its marketing budget to Bt20 million this year for a heavy campaign that will include roadshows around the country and advertising through various media channels.

Marketing and planning manager Nitus Tungsangprateep said the market had experienced flat growth for the past three years, because consumers preferred cheaper brands.

Traditional retailers, which prefer to sell cheaper-priced products, play a very big role in driving sales, because they represent 80 per cent of the Bt1.6-billion market, Nitus said. It is therefore difficult for brands to generate good sales if there is little existing demand for them.

So Sitthinan is using well-known video jockey Wirithipha "Woonsen" Phakdeeprasong to present the good quality of the Tonson brand and its long-standing service to Thai consumers. The company hopes the presenter will connect with younger-generation consumers and first-jobbers with his modern, health-conscious image.

Nitus said Sitthinan expected 10-per-cent sales growth following the campaign and believed its market share would rise from 37 per cent to 40 per cent. At present, glass noodles generate Bt640 million of Sitthinan's Bt740 million in annual revenue. However, the company is having difficulty controlling rising costs, which together with the strengthening baht are beginning to affect the company's profits.

Sompong Limsuwan, an assistant to Sitthinan's managing director, said the company's costs had increased 15 per cent, mainly from rising prices for raw green beans and higher energy costs.

The company has increased its retail prices 5-10 per cent and is working to control costs. It is also trying to develop by-products from the glass-noodle manufacturing process, he said.

The company is also concerned about a possible future shortage of green beans, because farmers are switching to other crops that are easy to grow and can be sold for the manufacture of alternative fuels.

Nitus said Thailand's annual production of green beans had fallen significantly, from 78,000 tonnes in 2002 to 54,000 tonnes now. Although this is still enough to supply the country's glass-noodle manufacturers, the dwindling supply will cause trouble in the future and force retail prices significantly higher, he said, adding that Sitthinan might soon raise the problem with relevant government agencies.

Sitthinan's total sales last year amounted to Bt740 million, of which 10 per cent came from exports, mainly to Europe, the Middle East and Japan. This year, it expects its sales to reach Bt800 million.

Nitida Asawanipont

The Nation