Instant noodle maker floats investment plan
Merged firm aims for B30bn in revenue
Thai President Foods Plc (TFMAMA), the amalgamated firm of two listed companies under Saha Group, has vowed to ramp up investment and boost instant noodle production capacity.
It also aims to raise its sales to 30 billion baht in five years from a combined 22 billion last year.
Pipat Paniangvait, the company 's vice-chairman and chief executive, said about 200 million baht would be spent to install new machines to triple the production capacity of Mama pre-cooked rice soup pork at its factory in Ban Pong, Ratchaburi province next September, rising to 720 tonnes from 240 tonnes.
In addition, the company will spend about 200 million baht to install 20 robots at its instant noodle factories in Sri Racha, Rayong and Hungary to cope with higher labour costs, he said.
Mr Pipat said the company is looking at prototype robots for use in its factories next year.
A Stock Exchange of Thailand (SET) statement yesterday approved the de-listing of securities for Thai President Foods Plc (PF), the Mama instant noodle maker, and President Rice Products (PR) after the two companies fulfilled the requirements for amalgamation, including the registration and allowed shares of the amalgamated firm to be traded on the SET from tomorrow using the ticker of TFMAMA.
Under the new shareholding structure, TFMAMA will be 25% held by SET-listed Saha Pathana Inter-Holding (SPI), the investment holding firm of Saha Group, the country's leading consumer product conglomerate, 16% by Nissin Holdings, and the remainder by four families: Chokwatana, Tatiyakawee, Poonsakudomsin and Paniangvait.
Poj Paniangvait, Mr Pipat's son, was appointed the company's president.
The amalgamation is part of the new business strategy of Saha Group's chairman, Boonsithi Chokwatana, focusing on food and service businesses because of growth potential. The group is also ambitious about making SPI one of the largest food companies based on market capitalisation.
Charoen Pokphand Foods Plc, the SET-listed subsidiary of agribusiness giant Charoen Pokphand Group, is the largest firm by market capitalisation in the food sector, worth 193 billion baht, followed by Minor International Plc, worth 177 billion, and Thai Union Group Plc, worth 100 billion. Carabao Group Plc is worth 6.85 billion baht, MK Restaurant Group 5.7 billion and TF 3.7 billion.
Mr Pipat said there is a huge opportunity for pre-cooked rice soup products and similar products that are rarely available in the market because of the complicated technology needed.
"Pre-cooked rice soup products will cater mainly to health-conscious people, whose numbers are growing," he said. "It also adds value to rice products."
Mr Pipat said the company is waiting for a government licence to set up a new instant noodle factory in Myanmar to help future expansion.
Thai President Foods already stopped its plan to set up an instant noodle factory in the Middle East, shifting to selling its know-how instead to interested investors in this market.
It also cancelled a plan to set up a joint venture instant noodle factory in Ghana because of safety concerns.
Mr Poj said the new firm plans to grow its revenue to 30 billion baht over the next five years, with 10 billion coming from overseas business, 10 billion from the domestic market and 10 billion from President Bakery business.
The merger will create sustainable growth for the group, and President Rice is destined to become a base to expand the business in the future, he said.
Company executives project Thailand's instant noodle industry to have flat growth this year of 15 billion baht, similar to last year.
"With consumer lifestyles changing and digital taking a greater role, we will use more technology to develop our product lines that make them much more convenient and easily accessible, such as launching an instant noodle bar," Mr Poj said.