Dairy firm eyes Bt1 bn production lift

Corporate September 14, 2017 01:00


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FRIESLANDCAMPINA (Thailand) Plc plans to invest more than Bt1 billion over three years to enhance its manufacturing facilities for Foremost dairy products.

Vipas Paovarojkit, who became managing director on June 1, said Bt300 million-Bt400 million would be invested each year from 2018-20 to improve machinery efficiency and expand production lines, especially for UHT and condensed milk, in response to growing consumer demand.

“To achieve the goal in three years, three key commitments have been laid down,” he said. 

“They are improving the quality of all areas of the supply chain, from the sourcing of raw materials or dairy farmers to cow’s milk centres; standard standardising production procedures and distribution channels in all regions to deliver quality dairy products to consumers; and sustaining business growth by producing new dairy products to match the new needs of consumers of various ages.”

Profit is becoming the driving force not only for the company, but also the Thai dairy industry. Thai dairy farmers, stores and consumers to have good products for consumption.

“We have set a revenue growth target of 5 per cent every year over the next three-year period and will retain the leadership position in the ready-to-drink milk market,” Vipas said.

Overall global milk consumption shows that consumers drink an average of 113 litres per head per year. 

The Asian market is in the spotlight as its average consumption growth rate of 3.7 per cent per year is the highest for any region in the world. 

China and India have emerged as the top two milk consumption nations in Asia, with annual growth rates of 3.8 per cent and 3.5 per cent. 

Thais consume an average of 18 litres per head per year.

Asia’s economy has kept expanding, which boosts people’s purchasing power. This, coupled with a greater awareness among Asians of the nutritional benefits of cow’s milk, has prompted people to pay more attention to their health. 

Asia’s dairy industry is enjoying an uptrend with a growth rate over 5 per cent a year, compared with the European market, which is on a downtrend. 

Demographic statistics from the United Nations show more than half of the global population is Asian – 4.5 billion people out of 7.5 billion.

China and India have a combined population of 2.7 billion – one-third of the world’s population. 

This makes the region worth investing in as it will be a major export market. 

Global milk production in 2025 is expected to increase, particularly in the Asian market, led by India, which is predicted to see as fast as 50-per-cent growth.

“FrieslandCampina’s experience in Thailand under the brand ‘Foremost’ for more than 60 years.“We realise the competencies for Thailand both in manufacturing and marketing,” Vipas said, noting the Foremost brand has been in Thailand for more than 60 years.

“Sources of good quality raw materials, especially fresh milk, have been developed and still have potential to improve even further. 

“This is also a key part of the investment and a priority of FrieslandCampina (Thailand) via a dairy development programme and the Pracha Rat project/

“We gain from Thailand’s geographical advantage in facilitate facilitating exports, with growing demand and purchasing power in neighbouring countries. 

“We export to many Asean countries, such as the Philippines, Malaysia, Cambodia, Laos as well as Hong Kong,” he said. 

“Similar to Thailand, neighbouring countries still have market potential especially accurate consumer awareness of the benefits of milk. “Opportunities are public education and outreach about milk as the most affordable source of nutrition to tackle malnutrition and support the effort to reduce non-communicable diseases.”

FrieslandCampina (Thailand) has two plants – in Samrong for UHT, taste enhancement products and drinking yoghurt products with production capacity of 360,000 tonnes per year, and in Laksi for pasteurised milk and cup and drinking yoghurt with production capacity of 87,000 tonnes per year. 

The combined production capacity is 447,000 tonnes per year.

“Our investment plan for the next three years will be focused on maximising efficiency and installing some new production lines to increase capacity. There is no plan for a new factory at the moment,” Vipas said.

The company says it is determined to achieve its vision to provide 100-per-cent quality cow’s milk to Thai consumers, support Thai dairy farmers with a better quality of life and support them to keep producing quality cow’s |milk.