Thai President Foods Plc (TF), producer of the popular Mama instant noodles, will announce today if plans to open the first Kairikiya Ramen restaurant in Bangkok will go ahead.
Business development manager Petch Paniangvait said executives would meet counterparts from Japan's Kairikiya Ramen restaurant chain.
If the deal can be sealed, Thai President expects to start the ramen restaurant business at the end of the year.
Mr Petch was speaking to the press at the company's pop-up ramen booth at the 19th Saha Group Fair at Queen Sirikit National Convention Center last week.
This is the company's first venture into the restaurant business.
If it goes ahead, the joint venture will be set up with registered capital of 15 million baht. Thai President will hold the major stake in the operation.
"My father [Mr Pipat] has wanted to expand into the ramen business in the past few years. We are 43 years old and believe it is the right time to branch out to develop our business more sustainably in the long term," Mr Petch said.
Thai President is expected to use about 15 million baht to open its first Kairikiya Ramen restaurant on a space of 80-90 square metres with 50 seats somewhere in Bangkok by the end of this year.
"Though there are many Japanese ramen restaurants in the market, we believe it has huge room to grow. We have been in the instant noodle business for more than four decades, so we may gain more advantage in operation costs,'' Mr Petch said.
The expansion into ramen is set to boost the company's sales in the long term because it is more difficult to expand its Mama noodle business because of intense competition.
The consumption of instant noodles is saturated. Per capita consumption of instant noodles in Thailand is about 45.9 packets per year, compared with 43.2 in Japan, 53.7 in Indonesia and 54.5 in Vietnam.
Mr Petch said the company was interested in running a Japanese restaurant rather than other types of cuisine as Thais are familiar with noodles.
Japanese food is also becoming more popular here with sales growing by 15% on average a year. The popularity of Japanese food and ramen will continue because it is healthy.
"The increasing number of health-conscious people in Thailand means an opportunity for Japanese food," Mr Petch said.
According to Kasikorn Research Center, the value of food business in Thailand was estimated to be 669 billion baht in 2013. Chain eateries accounted for 90 billion baht, with almost 2,000 Japanese restaurants contributing 22 billion.
Apart from restaurants, Thai President will continue to expand its instant noodle business at home and abroad. The company is in the process of sending the design of its new instant noodle factory in Myanmar to the country's government for approval.
Following approval, the company will build the factory to respond to a sharp increase in market demand in Myanmar.
The company is planning to expand its noodles into new markets including Slovenia, Slovakia and Croatia by the end of this year.
The expansion would increase the company's sales proportion in domestic and export markets to 50:50 by 2020, up from 80:20 now.
Mr Petch expects sales this year to grow by 3-5% from last year's figure of almost 10 billion baht.
TF shares closed on the Stock Exchange of Thailand on Friday at 157.50 baht, unchanged, in trade worth 267,000 baht.