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AGRICULTURE & FOOD PROCESSING
Mah Boonkrong rice packer will save costs
WALAILAK KEERATIPIPATPONG
Patum Rice Mill and Granary (PRG), a SET-listed rice trader and exporter, plans to spend between 800 million and one billion baht to build a new rice mill in Nakhon Ratchasima.
The investment is expected to help PRG, a packer and distributor of the Mah Boonkrong brand, to get closer to supply sources of fragrant rice and manage logistics costs more effectively.
More importantly, a new mill will integrate the business of PRG in the Northeast, where it already has operations in manufacturing plastic bags, rice packing and distribution.
"Instead of travelling over 200 kilometres to bring paddy from the northeastern provinces to the mill at the existing Pathum Thani plant, the new site in Sikhiu district will help us trim transport costs and time significantly," said Rut Subniran chairman of the executive board of PRG.
PRG plans to close the 28-year-old mill in Pathum Thani and sell the 80-rai land plot on the bank of the Chao Phraya River to its parent company, MBK Co. MBK is now developing a golf course on an 800-rai plot adjacent to the mill site.
The board of PRG has approved the use of revenue from the sale to fund the new investment. Mr Rut estimates that PRG will need an additional 200-300 million baht, which would come from loans, or the issue of new shares.
The new mill, together with an electricity generating plant, is expected be be completed in two years, with a capacity to mill up to 700 tonnes of paddy per day and supply 9.3 megawatts of power.
The capacity of the new site is smaller than at existing plant that mills about 1,000 tonnes per day, he said.
"Since we will be closer to production sources, it is not necessary to run a big milling plant as we could access supply easily," Mr Rut said.
The mill will be built on a 280-rai compound of the company in Sikhiu district, which is already the location of two subsidiaries, Ratchasima Rice Co and Simapac Co. Ratchasima Rice manufactures and distributes milled rice that is packed in two and five-kilogramme bags in the local market under the Mah Boonkrong trademark.
PRG's sales revenue in its 2007-08 financial year ended June 30, 2008 were 2.01 billion baht, up from 1.81 billion the previous year. Net profit was 319.38 million baht (5.16 baht a share), an increase of 113% from 150.66 million (2.51 baht a share) the year before.
Besides exporting and distributing white and fragrant rice, the company also is looking at niche segments for more health-conscious consumers.
PRG has joined with the Satang Co of the National Innovation Agency to form a new venture, Inno Food Co with initial capital of five million baht to produce and distribute nutra-GABA (Gamma-aminobutyric acid) rice. The rice, which helps consumers to avoid diseases such as diabetes and hypertension, won a business innovation award last year.
Mr Rut aims to launch GABA rice this year and projects to sell about 100 tonnes per year, a small amount when compared with the 100,000 tonnes PRG sells.
The healthy rice is priced at about 140 baht per kilogramme, about three times higher than regular Hom Mali rice, but he is confident it would receive a good market response, similar to earlier products including rice with cereals, garlic rice, and Mah Boonkrong Plus.
PRG shares last traded on Monday on the SET, closing at 33 baht.
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