AYUTTHAYA : CP Intertrade Co (CPI), the rice trading arm of the Charoen Pokphand Group, has announced plans to build a 10-billion-baht industrial estate here specifically to house a number of rice-based manufacturing activities.
Drafted as the second phase of the expansion, the estate will be located on a 600-rai compound in Ayutthaya’s Nakhon Luang district adjacent to the first stage, which comprises a rice-processing plant, port and inland depot.
Drafted as the second phase of the expansion, the estate will be located on a 600-rai compound in Nakhon Luang district adjacent to the first stage, which comprises a rice-processing plant, port and inland depot.
Chief executive Sumeth Laomoraphorn said the future investment is aimed at showing foreign buyers the company's strong commitment to the rice business.
"In the past, our focus was only on trading, with no concrete investment. This may have affected the confidence of our buyers," he said.
The expansion will see several new rice-based manufacturing plants such as for rice bran oil, rice vermicelli and instant noodles, and rice snacks be gradually added to the site.
Expansion will take place after the firm finalises the blueprint of its investment, which could see the completion of the estate in 10 years, said Mr Sumeth.
CPI just completed its first phase of investment _ 4 billion baht for a rice centre in Nakhon Luang district.
Sumeth: Foreign buyers our concern
It combines a processing unit with annual capacity of 1.08 million tonnes of rice with 36 silos that can hold 1,600 tonnes each and 20 silos that can store 1,300 tonnes each.
Together with other plants, CPI's combined annual capacity will reach 1.5 million tonnes.
Some 80% of output will come from the plant, mostly premium-grade rice exported to 120 countries, with the balance marketed locally under the Royal Umbrella brand.
The port on Ayutthaya's Pasak River has a 276-metre berth with facilities for up to 500,000 20-foot equivalent units a year.
"The river is 4.5 metres deep and capable of facilitating five barges or ships, each up to 50 metres in length, at the same time," said Charin Inmuang, a vice-president of Ayutthaya Port & ICD Co.
The centre covers 270 rai, with 80 rai set aside as an inland container depot in which facilities such as cargo processing and customs procedures are provided by customs officials.
The port facilities will promote exports not only for CP rice but also for manufacturers from northern and central provinces and especially companies in nearby industrial estates.
Several fertiliser and commodities firms outside the CP Group in these provinces use the port to cut logistics expenses.
A CP study indicates river shipments from Ayutthaya to Bangkok save 15 litres of fuel per container over road transport.
River transport produces 0.47 kilogrammes of carbon per container for each kilometre, while 2.3 kg are produced when using trucks.
Mr Charin said the round-trip river route, about 240 kilometres from Ayutthaya to Bangkok, could save 432 kg of carbon per container.
Despite falling exports this year, CPI remains upbeat about a better performance next year thanks to strong demand for premium rice from foreign buyers.
Next year it plans to export 700,000 tonnes of rice, up from an estimated 604,000 tonnes this year, which itself is down by 15% from last year.
Mr Sumeth attributed this year's decline to weak global demand and cheaper rice from India in the first quarter.
However, he is confident local sales will increase to 400,000 tonnes next year from 320,000 tonnes this year thanks to enhanced marketing.
The Thai Rice Packers Association reports the business value of rice in the domestic market is 150 billion baht from 5 million tonnes sold commercially.
Of this volume, 60% is sold via conventional trade and 40% through modern trade outlets.
Neilsen Research found Royal Umbrella is the market leader for the fourth consecutive year with an 11.4% share of bagged rice.
A worker loads sacks of rice at the rice centre, which has 36 silos that can hold 1,600 tonnes each and 20 silos that can store 1,300 tonnes each. WALAILAK KEERATIPIPATPONG