Surachat
Surachat

Commitment to quality paves the way for exports of shrimp paste

Corporate February 24, 2018 01:00

By SOMLUCK SRIMALEE
THE NATION

2,799 Viewed

SURACHAT Udomthanakulchai took the reins of the family business of making shrimp paste with a commitment to improving the product quality and working through a debt restructuring.



That was in 2012. Within five years the business has turned around, with exports to Laos and plans for inroads into other Asean markets.

Surachat, 48, took five years to restructure the family debt of Bt10 million, centred on a commitment to improve the quality of the shrimp paste in order to meet official food safety standards.

Aside from the exports to Laos, his company is negotiating with a Cambodian importer to distribute the product in that country this year.

“I graduated from university as a pharmacist and began working at a drug manufacturing plant,” Surachat said. “In 1997 I resigned from the drug company plant and began working in the family business, engaged in sales of biscuit products. My elder brother, meanwhile, continued to look after the original business of the family, which is producing and distributing shrimp paste.”

However, in 2012, his elder passed away, leaving Surachat to step in to manage the business and the task of restructuring the family debt of Bt10 million.

“I set about trying to improve the quality of shrimp paste and to expand the market for the product,” he said. “The goal was to increase my sales value enough for me to pay back my family’s debt, and that took up to five years.

“Once I had paid back this loan, I then began to expand the business with an investment of Bt15 million to set up a new manufacturing plant in Ban Bung district, Chon Buri province.

“This enabled us to make the shrimp paste to a quality that meets official food standards and allowed us to start the exports to Laos last year.”

Under this strategy, Surachat said that the company’s sales increased from an average of Bt800,000 a month to Bt1.2 million by focusing on food manufacturing plants that need shrimp paste as an ingredient in their own food products. 

Last year the company started to produce shrimp paste under its own brand, Kapi Hom Huan, for distribution in traditional and modern trade channels. That development coincided the start to export sales in Laos.

For the expansion into Cambodia, the company is negotiating with an importer that wants to distribute Kapi Hom Huan in Cambodia. Surachat expects a deal to be finalised this year.

He said that the company also was working on a value-added strategy under which it would blend the shrimp paste in products such as soy bean oil, which is popular in Laos and Cambodia. Another line would be shrimp paste for eating with mango.

“We plan to produce our value-added products in the next two or three years, during which time we would be expanding our reach in Laos and Cambodia, as well as other maybe other Asean countries, such as Vietnam, and Myanmar,” Surachat said.

“This will come after we spend a budget of Bt3 million to improve our production plant this year. The investment budget came from a loan from the Small and Medium Enterprise Development Bank of Thailand, guaranteed by the Thai Credit Guarantee Corporation,

 “We are committed to producing and distributing shrimp paste as this was our original family business. We will also build on the potential to expand into other Asean markets as we keep making progress in improving product and meeting all the relevant food standards.

“We are confident in the future of our family business and believe that we can drive its expansion for the long term and achieve business growth in the double digits each year.”