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AGRIBUSINESS
PORNNALAT PRACHYAKORN
The Nong Pho Dairy Co-operative (Under Royal Patronage) plans to introduce ''functional milk'' products by the end of this year to tap a growing market and boost sales.
Nong Pho milk has been a popular mass-market product for three decades. But customer behaviour is gradually changing, so the company wants to develop products that support this change, said marketing manager Kowit Kraisarin.
Functional milk refers to milk for specific purposes, such as high-calcium milk and milk for mothers.
Meanwhile, the co-operative is now in talks with the Commerce Ministry about whether it can raise product prices after the Internal Trade Department delayed approval of increases earlier.
Nong Pho hopes to raise prices by two baht per unit as the raw milk price has gone up. Currently, its 250cc milk pack costs 9.50 baht and the 200cc costs 8 baht.
According to Mr Kowit, the company started discussing the development plan of new products with its long-time product distributor, Loxley Trading, earlier this month after the two parties agreed on extending the distribution contract by another five years.
''The two-year contract we had before made it hard for both of us to develop a long-term strategy together. The five-year term is an appropriate period,'' said Kosoom Sinphurmsukskul, the CEO of Loxley Trading.
The new products are expected to be launched by the end of this year with the goal of boosting sales growth to 7-8% compared to 3-4% on average.
Nong Pho expects sales revenue of milk products to rise to two billion baht, up 3-4% from last year. Of that, 1.2 billion baht would come from UHT milk, and the rest from pasteurised milk.
However, it forecasts that its profit margin will drop to 30 million baht from 39 million in 2007 due to rising costs of production including raw milk, said Kampol Rosjana, the chairman of the Nong Pho board.
Nong Pho has also halted its plan to expand overseas because of an inability to produce enough supply.
The company is now encouraging its member farmers to increase the number of cows and also develop cow species to support its long-term plan.
Nong Pho recently changed its package design to better attract younger customers. The company also hopes by expanding its customer base it would increase its market share of UHT milk to 18-19% from 12% currently.
Nong Pho currently ranks third in the 10-billion-baht UHT milk market after Foremost and Thai Danish.
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