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Published on February 29, 2008

The move is considered the company's biggest-ever investment since its establishment in 1994.

"Of the investment, about Bt70 million will be used for a new factory and the rest for new branches of Caffe D'Oro coffee shops," said managing director Veradech Somboonvechakarn.

He said the new ground-coffee factory would be located in Samut Sakhon's Sinsakhon Industrial Estate and was scheduled for construction in the third quarter.

The company expects the new factory to start operating by the middle of next year, with a full capacity of 10 tonnes of ground coffee per day.

Its existing factory is now at full capacity of 2 tonnes a day. Veradech said after the new factory was completed, the production line at the existing one would be moved out and installed the new facility.

Veradech, who is also CEO of Golden Cream, a sister firm of VPP Progressive and operator of Caffe D'Oro coffee shops, said an increased supply of ground coffee from the new factory would support the company's coffee-shop expansion plan.

Golden Cream this year plans to spend more than Bt10 million to open 10 new branches. The new shops will be in both kiosk and stand-alone formats. Half of the new branches will be in Shell petrol stations and the rest in office buildings and state agencies.

The company now operates 87 of the coffee shops in the greater Bangkok area. Of those, about 60 per cent are in Shell petrol stations and the rest are in office buildings, schools, hospitals and state agencies.

Meanwhile, the group plans to tap into Asean as a green-coffee-bean market, with an annual export target of 100 tonnes next year after concentrating on the US and EU markets for 18 years, said Veradech.

He said the company targeted an increased export volume of green coffee beans of 500 tonnes a year over the next three years, because coffee plantations under the company's contract farming are expected to expand from 2,000 rai to 5,000 rai.

He said the major markets for the group's exports of green coffee beans were Japan, Singapore and Hong Kong.

Veradech said Golden Cream expects sales at Caffe D'Oro shops to surge 15 per cent to Bt150 million, while the group's total sales are expected to reach between Bt350 million and Bt400 million this year.

The total domestic market for coffee shops is expected to increase 5 per cent to Bt5.5 billion this year.

Sasithorn Ongdee

The Nation