foremost plans to double uht capacity

The Nation

Friesland Foods Foremost (Thailand) hopes to persuade Thais to drink more milk as it invests more than Bt1 billion to double the capacity of its ready-to-drink UHT products to 2 billion packs a year.

"Thais drink only 12 litres of milk per year per person. We want to see them consume at least 18 litres per year, which is the same figure as in the Philippines," managing director Hans Huistra said yesterday.

When the expansion project is completed next year, the added capacity would first serve the home market, but prepare for further forays in more distant markets, he said.

The Philippines and Bangladesh are the new markets that it wants to penetrate besides the current market in Indochina.

"Sales in the Philippines and Bangladesh are small. They have room to grow, but this year we'll focus on domestic sales in order to boost consumption," he said.

Exports account for 15 per cent of Foremost's total sales and hopefully that would increase to 25 per cent this year, he said.

Milk volume growth was 2 per cent last year, and as the milk-market leader, Foremost targets the figure would go to 10 per cent this year.

Foremost needs to focus on its real milk products to boost market value, so it has decided to remove its soybean milk from the market even though it entered the soymilk market three years ago and had 5 per cent of that market. Foremost started withdrawing from the soymilk market early this year.

The company had spent huge sums of money on soymilk products and scored some success in driving soymilk market growth but the market for true dairy products was not going anywhere, he said.

The company's goal is to ensure that Foremost will further strengthen its position and ensure the dairy category will pick up, he said.

The revenue contribution from UHT milk is over 50 per cent, followed by fresh milk, yoghurt drink and sweetened condensed milk. The company controls 54 per cent of the Bt6-billion domestic UHT milk market.

The company this year has allocated over Bt200 million for marketing to stimulate milk consumption in the country, aiming to ensure the dairy market will grow by at least 10 per cent this year.

Kaweemat Tangkiriphiman, marketing director, said the Bt200-million budget would build up awareness and understanding of the importance of milk as an everyday dairy nutrition.

"The marketing campaign on the other hand helps increase the sales of milk in general, as well as helps local dairy farmers sell more raw milk," he said.

Foremost purchases 400 tonnes of raw milk a day.

The company also targets its sales volume growth turning to double digits after seeing single-digit growth last year, he said.