December 26, 2006

 

Thailand's Sun Group to start UK exports mid-Jan

 

 

Thailand's Sun Group, a local integrated chicken producer, is in negotiations with four potential clients in the UK and expects to conclude deals with two of them by mid-January.

 

It will be the group's first exports to Europe after a lull of three years following bird-flu outbreak in Thailand. However, this time the company would export cooked products for other brands instead of raw chicken.

 

The company president Somkiert Tangjaiaworn however said it was still uncertain as to when Sun Group would export products under its own brand as this would require time to study the export market and build brand awareness. It has a long-term plan to build up its brand among expatriate Thais via Thai restaurants in target countries before gradually spreading the awareness to the local people.

 

In the long term, Sun Group also hopes to have co-investment with a business partner that not only utilises its production facilities but also lets it play a part in developing the products.

 

The group has invested THB 200 million (US$ 5.52 million) in a new plant near Sun Food's slaughterhouse in Saraburi province as part of export resumption. It is expected to start production at about the same time the group expects to conclude the UK deals.

 

Reacting to baht's current strength, Somkiert said it could certainly influence international clients to possibly switch their supply from Thailand to Brazil (for clients in the EU) or China (for clients in Japan). The group's approach to counter this is to manufacture what it competitors cannot in order to keep clients' loyalty in all situations.

 

However, exports would only contribute 10 percent of expected sales next year, with the rest coming from domestic sales.

 

Before the bird-flu outbreak, the group relied solely on exports. At that time Thailand was strong in exports, he recalled. From just 100,000 tonnes in 1996, the volume of Thai chicken exports had increased to 500,000 tonnes by 2003.

 

Current per capita consumption of chicken in Thailand is only 13 kg, with the market worth approximately THB 30 billion (US$ 0.828 billion) per year, while consumption per capita in the US is as much as 40 kg.

 

Sun Group is currently the seventh largest chicken producer in Thailand, according to Somkiert.