CHON BURI : King Pac Industrial Co (KPI), one of Asia's leading plastic bag makers, plans to boost its revenue gained from government institutions to half the total within two years.
Vice-president Paiboon Julasaksrisakul with a selection of King Pac Industrial’s plastic bags.
Vice-president Paiboon Julasaksrisakul said while customers in this group require high-grade products, the costs are no different than for retail clients.
Also, increasing the number of institutional customers will diversify risk, as they normally sign contracts of 4-5 years compared with the yearly basis common in the retail sector.
At present, government agencies generate 20% of KPI's revenue.
"Ever day, we see articles in newspapers about various institutions being told by their government to lower their costs, and many have been switching their procurement to ours, as we provide cheaper products," said Mr Paiboon, who is in charge of international business for KPI's King Pac Co and King Bag Co.
KPI's rubbish bags are in use by more than 30 councils and cities in Europe, New Zealand, Australia, Japan and at least five US states.
The company is also in talks with governments in South Africa and South America.
Other institutions using the bags include schools, parks, hospitals and prisons.
With annual production capacity of 100,000 tonnes at King Pac and 30,000 tonnes at King Bag, KPI is said to be the biggest plastic bag producer in Asia.
Some 70% of its production is exported.
Of the overall 130,000 tonnes, 80% is for household disposable packaging and the rest for government applications such as construction film.
Mr Paiboon expects capacity to rise by 20% this year, serving increased demand from institutions.
King Pac and King Bag have 50 retail customers, mostly in the US.
To spread the risk around, the biggest customer is not allowed to purchase more than 20% of total production.
Direct retail accounts for 50-60% of each subsidiary's turnover, while the rest comes from national brands.
Last year, the two subsidiaries gained revenue of 4.1 billion baht from exports.
Export revenue is expected to increase by 30% this year, down from 38% growth last year.
Since January, international shipments have risen by 12% year-on-year.
About the author
- Writer: Nanchanok Wongsamuth
Position: News Reporter