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Thai Poultry Processors To Focus On Local Markets In 2005

by 5m Editor
5 January 2005, at 12:00am

THAILAND - Stiff competition is expected among Thai poultry processors in the domestic market in 2005. Producers are eyeing increased domestic sales to offset the shortage of export markets for raw meat due to the re-emergence of bird flu last year.

Thai Poultry Processors To Focus On Local Markets In 2005 - THAILAND - Stiff competition is expected among Thai poultry processors in the domestic market in 2005. Producers are eyeing increased domestic sales to offset the shortage of export markets for raw meat due to the re-emergence of bird flu last year.

With the all-clear unlikely to be seen at least for the next two years, domestic sales are one option for exporters faced with a towering 200,000-ton inventory of frozen raw chicken meat.

Leading companies such as Saha Farms, Charoen Pokphand Foods and Betagro Group have said they would focus on expanding local markets. There are plans to introduce a variety of new semi-cooked and cooked products, with additional sales channels sought via international restaurant chains and supermarkets.

"It is a challenge for us to expand the local market since our expertise is in exports,'' said Betagro executive vice-president Nopporn Vayuchote.

"To expand domestic markets, we might need strategic partners to penetrate the food business more comprehensively.''

Fresh chicken meat, pork, sausages and eggs sold under various brands are among the products from Betagro currently available on the Thai market.

In 2005, it plans to develop other processed foods, including snacks, which will be more attractive to young consumers.

Mr Nopporn said Betagro was looking at either joint ventures, or acquiring franchise licenses from popular foreign fast-food restaurant chains to expand its sales channels in the Thai market.

He revealed that the company would prefer to join up with established food chains rather than develop its own house brand, which could take years to achieve widespread brand recognition.

"It's easier to do marketing if we get international brands such as McDonald's or KFC that are already recognized globally,'' he said, adding that there were still have many popular foreign food restaurant chains that might appeal to Thais. Betagro currently has about 10,000 tons of frozen chicken in stock.

Charoen Pokphand Foods Plc (CPF) is also restructuring its domestic marketing plans by rebranding and expanding distribution to include more hypermarket retailers.

According to Suphat Sritanatorn, vice-president of marketing for CPF, the company distributes about 30 brands of processed foods made from chicken, pork, shrimp and fish on the domestic market.

"We need to review the status of each brand to see whether they are strong enough to stay in the market or not,'' said Mr Suphat.

The rebranding is aimed at promoting stronger sellers to represent a core competence for the company's business. Repackaging would also be necessary to achieve brand recognition not only in Thailand, but also in overseas markets to match with the company's drive to expand the food business under its own brand abroad.

"We do not want people to recognise CP only for chicken but also other food items such as eggs, pork and shrimp,'' he said.

CPF plans a rebranding to stress its presence in both chicken and pork. At the same time, it plans to bring more processed and ready-to-eat meals to modern retail trade outlets.

Pisit Ohmpornnuwat, president of CP Merchandising Co, a subsidiary of CPF, said the move would show that the group had become a full-spectrum food product company, and was no longer in the business of merely selling bulk commodities.

Saha Farms Group, the country's largest chicken exporter, which has seen sales plummet since the outbreak was first officially detected in Thai poultry in January of 2004, plans to use direct marketing to distribute its chicken products locally.

The company estimated that its sales in 2004 have fallen by 70%, leaving annual sales revenue at around eight billion baht. Saha Farms, with more than 40,000 tons of frozen chicken meat in its storage freezers, plans to shift to producing cooked products rather than exporting only raw meat.

Chairman Panya Chotitawan said direct sales of chicken products would be added alongside with the group's cosmetics and food supplements subsidiaries.

Source: eFeedLink - 5th January 2005

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