Saha Pathanapibul banks on partners
SAHA Pathanapibul Plc, one of Thailand's largest trading conglomerates, yesterday officially announced a partnership programme under which it can help wholesalers and retailers move into the emerging area of online business-to-business transactions.
The company also said it planned to invest more than Bt1 billion to set up a new central warehouse in Sri Racha. The facility will be on a 50-rai plot and provide space of about 50,000 square metres.
Saha Pathanapibul operates a central warehouse in Sri Racha but, at 33,000 square metres, it is fully occupied and hard to manage. The company has also has depots in Chiang Mai, Khon Kaen, Nakhon Ratchasima, and in Romklao Road, Bangkok.
Saha Pathanapibul chairman Boonchai Chokwatana said that under the partnership scheme with wholesalers and retailers, the company will be able to set and control the prices of its food and household products in the market.
Participating wholesalers and retailers make sales forecast and commit to certain levels of online ordering, which will be revised every six months. They can receive privileges from the company in terms of product prices and promotions that are more generous than those afforded to other wholesalers and retailers.
The company will give them free tablet computers that enable the participants in the programme to monitor their orders and stocks in real time. "With such a partnership, we will be able to manage our inventory better and as a result our logistics cost will gradually decrease. We were able to save up to Bt86 million in logistics expenditure last year," he said.
Boonchai said that since the middle of last year, when the partnership programme was launched, about 200 wholesale and retail partners have signed on. Roughly half of these are engaged in trade involving food and the other half in household products.
Vathit Chokwatana, president of Saha Pathanapibul, said some wholesalers and retailers of the company’s top-selling products, such as Mama instant noodles and 108Shop detergent, have engaged in fierce price-cutting competition among themsevles.
“However, with the partnership programme, the participating wholesalers and retailers are in charge of their own territory. We can set up a one-price policy for them and avoid any price-cutting tactics.”
Vathit said that the company has set criteria for those wholesalers and retailers participating in the partnership programme so that they can enjoy a good relationship and have the potential to grow with the company regarding their capabilities as well as geographic and zoning issues.
Saha Pathanapibul yesterday said it was targeting total sales of Bt34.2 billion and profit of Bt2 billion this year.
The company posted Bt31.3 billion in total sales and Bt1.4 billion in profit last year, growth of 4 per cent for the former from the previous year. The company set a growth target of 8 per cent for its Mama instant noodle products to reach Bt11 billion this year, up from the Bt10.3 billion posted last year.
The company will this year focus on key growth-driving strategies, comprising a collaboration with principals in launching new products to expand the market; strengthening the relationship with strategic partners through mutual sales target; and expanding online distribution channels, both business-to-business and business-to-consumer.
“We have foreseen that the Thai economy is likely to improve this year and that the existing government schemes, including the Welfare Smart Card initiatives, can help stimulate consumer spending, while online purchases will continue to grow steadily,” Boonchai said.
“We, however, have not seen any sign of significant improvement in people's spending so far this year. Giving money to lower-income people is a good thing to stimulate the economy. However, these people need to have a good sentiment towards shopping. Any political chaos should be eliminated in order to avoid any psychological impact to consumers.”
Boonchai said that, in reference to the country’s next national election, everything should follow the road map set by the government.