WITH SALES growth harder to find at home, Thai President Foods has reshaped its business strategy to focus on building up the overseas markets for its popular Mama instant noodles line, said Petch Paniangvait, manager of the company’s foreign investments office.
Petch said that consumption per capita of instant noodles in Thailand stood at 49 packs a year, a level which he described as reflecting a mature market.
“We, as a market leader in Thailand’s instant noodle market, need to adjust our business plan to focus on two key strategies, which is overseas expansion and developing new premium instant noodle products to stimulate the domestic market,” he said, adding that the aim is to maintain the company’s leadership position.
He said Thailand's instant noodle market grew only 5 per cent to Bt16 billion in 2016, with 75 per cent as packed instant noodles, and the rest cupped instant noodles. According to the World Instant Noodles Association, Thailand’s per capita consumption of 49 packs a year puts it in fifth place for that segment.
The country trails South Korea at about 76 packs per head a year, following by Hong Kong at 59 packs, Vietnam 52.6 packs and Indonesia 50.5 packs. Japan ranks as the sixth largest market on per capita basis, at 44.7 packs per year.
“We have to admit that the instant noodle consumption in Thailand at about 49 packs per head per year is now at maturity level. The company now needs to focus on overseas expansion to avoid any business risk and maintain our growth,” said Petch.
He said that the company exports Mama instant noodles to 60 markets. It operates instant noodle factories in four countries: Myanmar, which posted Bt650 million in sales last year; Cambodia with Bt300 million in sales; Bangladesh with Bt50 million in sales; and Hungary with Bt250 million in sales.
“For this year, we aim to export more Mama instant noodles to the European market from our manufacturing facility in Hungary,” said Petch.
“Our expansion will focus on Eastern Europe. The Hungary factory is now exporting Mama and Thai Chef instant noodles to only Central European markets, especially Germany. We will also utilise our instant noodle factory in Bangladesh to expand our instant noodle business into India.”
He said the company would open another instant noodle factory in Mandalay in Myanmar. On a 10-rai plot, the factory will require between Bt100 million and Bt200 million of investment and will be completed in 2019. The company as an instant noodle factory in Yangon, with production capacity of about five million packs a month. The new factory in Mandalay will allow the company to double its manufacturing capacity in the Myanmar market.
Petch said that for Cambodia, the company has bought a 4-rai plot in an industrial estate in Phnom Penh for future expansion. Mama has a market share of 80 per cent in Cambodia, as Cambodians love Thai products, including instant noodles.
Poj Paniangvait, president of Thai President Foods, said that despite the mature nature of the instant noodle market in Thailand, the premium instant noodle segment still has growth potential. Today, the premium segment is worth about Bt1.6 billion in annual sales, accounting for 10 per cent of the Bt16 billion instant noodle market.
“For Mama as a market leader, we will develop new instant noodle products continuously into the market,” said Poj, adding that total instant noodle market is expected to increase by at least 5 per cent this year.
“For this year, we will launch three new products in both the premium and ordinary instant noodle segments. The move will allow the company to increase its market share from between 45 per cent and 46 per cent to 50 per cent by the end of this year.”
Thai President Foods posted Bt10.6 billion in sales last year, up 3.04 per cent over the previous year. Of this, some Bt7.9 billion is from the domestic market, with the rest from exports. This does not include sales generated from production at overseas factories.