Vipas: Awaiting nod from Dutch office
FrieslandCampina Thailand, the maker and distributor of Foremost dairy products, plans to spend 1 billion baht to expand production capacity for UHT and condensed milk over the next three years to support future growth.
Managing director Vipas Paovarojkit said the company is in the process of seeking approval from its parent company in the Netherlands for the investment plan.
After receiving approval, the company will start investment next year and hope to complete it in three years.
The budget will be used to expand the capacity of Foremost milk by 30-40%.
It has two Foremost factories in Thailand with a combined capacity of 447,000 tonnes a year.
The Samrong factory in Samut Prakan province produces UHT milk and drinking yoghurt products with a production capacity of 360,000 tonnes a year.
Its Laksi plant produces pasteurised milk and drinking yoghurt with a production capacity of 87,000 tonnes a year.
The increase in production capacity will serve both domestic and export markets.
The company also handles the business of Foremost in Cambodia and Laos. It exports condensed milk and UHT milk to Hong Kong, Malaysia and the Philippines.
Mr Vipas said sales in Thailand will increase by 5% a year from 2017-20.
FrieslandCampina Thailand plans to increase sales of Foremost in Laos and Cambodia over the same period. Foremost sales in both countries combined topped 800 million baht last year, and it expects to reach 1 billion this year.
“Though the per capita consumption of dairy products in Thailand is still low at 16 litres per head, it is difficult to grow dairy product sales in Thailand by double digits like in the past because consumers have many drink choices,” he said.
The company plans to achieve its sales growth target of 5% per year the next three years via three business strategies. They comprise leveraging its strong brand and strengthening its distribution network; expanding in growth areas in Cambodia and Laos; and offering new dairy products to fit with consumer needs such as sports enthusiasts and the elderly.
Sales of Foremost totalled 14 billion baht in 2016.
Sales in the first half this year grew by 3%, beating the overall industry which suffered a contraction of 3% year-to-date as of July.
“It is the first time in the past decade the dairy product market contracted,” he said.
The company will put more emphasis on kid’s drinks because it is the only dairy segment where market demand continues to grow.
It plans to spend about 100 million baht to promote its dairy products the final three months of the year.
The country’s milk industry was forecast to be worth some 61 billion baht last year.