Mama develops wider range

Economic uncertainty and higher unemployment, which triggered a drop in instant noodle demand for the first time in three decades last year, have prompted the Mama instant noodle maker Thai President Foods Plc (TF) to shift its focus to new business categories in 2009.

WhileMama’sshare of the instant noodle market is a hefty 52.8%,MrPipat says Thai President is concerned at the market’s3.2% contraction in 2008 and is aiming to maintaingrowthwith a broaderMama product range.

The instant noodle market, worth more than 10 billion baht, shrank 3.2% by volume last year. Despite increasing its market share last year to 52.8%, Thai President is concerned by this trend as current economic problems are unlikely to be solved easily, said president Pipat Paniangvait.

"Competition in the instant noodle market, which has been stagnant, will get intense this year. We're concerned about the weak economy, which will lead to rising unemployment and lower spending," he said.

As a result, the company aims to invest 500-700 million baht in business areas with growth potential in 2009.

Mr Pipat said Thai President would buy machines to expand its biscuit, wafer and cookie business through higher production capacity and greater variety. Over the next few years, the company expects the biscuit and wafer market to grow by at least 100% annually.

In its core instant noodle business, Thai President aims to increase sales by 9% this year from seven billion baht last year. It has targeted 6% growth from its existing business and 3% from new products including cheaper instant noodles for lower-income consumers from March.

Priced at five baht, rather than six baht, for a 55-gramme pack, the budget noodles will be available in only two or three flavours.

"We want to help the poor and those who are jobless or have low spending power. We hope the sales of low-priced Mama instant noodles will make up 20% of total sales this year," said Mr Pipat.

By June or July, Thai President will also introduce premium instant noodles to tap rising demand from health-conscious consumers. These non-fried noodles will be priced at 15 baht per package and 25 baht per cup. The company will buy a vacuum mixer from Japan to produce them.

In addition, the company aims to increase its sales of cup noodles, which provide convenience for busy consumers.

Across the industry, the contribution of cup noodles to instant noodle sales has risen to 6% from 5% last year, while the share of packaged noodles fell from 88% to 87%. "With the Mama brand, sales of cup noodles grew by 18% in volume and over 20% in value," said Mr Pipat.

He added that over three years, demand for cup noodles has grown from 2.6 million cups per month to 12 million last month.

Mr Pipat said export sales of Mama noodles were 1.3 billion baht last year, up 30% from 2007. This year, Thai President aims to increase export sales by 15% to 1.49 billion baht by penetrating new markets such as Mexico, Cyprus and Spain.

Thai President shares (TF) shares last traded on the SET on Dec 30, closing at 482 baht.