Thai President Foods, the producer of Mama instant noodles, yesterday announced it was cutting its sales-growth target to only 5 per cent, half the normal rate, pointing to a slowdown of the overall economy and consumers' reduced purchasing power.
Company president Suchai Ratanajiajaroen said it saw no signs of improvement in the economy. The revised target of 5-per-cent growth is the lowest in 10 years. The company also missed its sales target last year.
He said things might have been different if the political impasse had been settled quickly.
Thai President Foods posted 5-per-cent sales growth last year. However, sales of Mama cup instant noodles grew by about 20 per cent. Suchai said this reflected a change of consumers’ lifestyles to a faster-moving pace and higher demand for convenience in daily activities, including eating. Meanwhile, sales of the traditional packaged Mama instant noodles grew by just 1-2 per cent last year.
“We posted only 5-per-cent growth last year, which was lower than target. The poor performance was a result of the slow economic situation and a plunge in consumers’ spending power, especially in the fourth quarter of last year,” he said. “However, the overall decline in sales was compensated for by the growth of the cup-noodle category.
“We don’t think spending power this year will be worse than last year and hope that the political problem, which is the most worrying factor, will be not be prolonged throughout the year,” he added.
He said Thai President Foods would invest about Bt400 million this year in a new factory building as well as machinery to expand production capacity for cup noodles by 30 per cent. The expansion will be completed by August.
Suchai said the company’s negotiations on acquiring an instant-noodle plant in Hungary would also be concluded by midyear. It is part of the firm’s plan to increase its annual sales to Bt20 billion within 10 years.
Thai President Foods reported Bt11.2 billion in total sales in 2012.