Mama bolsters noodle production capacity
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Mama bolsters noodle production capacity

Demand in Myanmar, Cambodia to soar

From left Mr Pun, Mr Petch and Mr Poj are beefing up instant noodle production abroad. PITSINEE JITPLEECHEEP
From left Mr Pun, Mr Petch and Mr Poj are beefing up instant noodle production abroad. PITSINEE JITPLEECHEEP

SET-listed Thai President Foods Plc (TFMAMA), the maker of Mama instant noodles, is spending 660 million baht to build two new factories in Myanmar and Cambodia to cope with growing demand in those markets.

Petch Paniangvait, the company's head of foreign investment, said production capacity at the noodle facility in Yangon is complete, with 200,000 packages per day. The company plans to allocate 330 million baht to build a second factory on 16 rai in Mandalay.

Operations are expected to start in the next 15 months, doubling total production capacity to 400,000 packages per day.

The Mama instant noodle business in Myanmar operates under a joint venture firm called Ayeyarwaddy Success Venture Foods, in which Thai President Foods holds a 51% stake. Saha Pathanapibul, the distributor of Mama in Thailand, owns 24% of the venture, with local partners owning the remaining 25%.

"The instant noodle market in Myanmar is still smaller than in Thailand, but the potential is huge," Mr Petch said.

Pipat Paniangvait, the company's chief executive, said: "Consumption of instant noodles in Myanmar is 11.1 packages per person per year, compared with 49 packages per person per year in Thailand."

Mama is the second-largest instant noodle brand in Myanmar after Yum Yum, controlling about 30% of the market share.

"We cannot expand our business in Myanmar as quickly as we would like because of limited production capacity," Mr Pipat said. "After our new factory in Mandalay is up and running, we are confident we can become the market leader there."

Mama's sales in Myanmar totalled 657 million baht in 2018, with the amount expected to double by 2020.

The company also plans to spend 330 million baht to build an instant noodle factory on 9.5 rai in Phnom Penh this year to replace its existing factory.

Construction will start over the next 1-2 months, with operations scheduled over the next 12-15 months.

The company produces 40,000 cases of Mama a month in Cambodia. It also exports 40,000 cases of Mama packages and 80,000 Mama cups a month from Thailand to sell in Cambodia.

"Mama sales in Cambodia fare quite well with a good bottom line," Mr Pipat said. "After we start the new factory in Phnom Penh, we expect sales from that factory to double to 80,000 cases per month, reaching 565 million baht by 2020."

Mama in Cambodia operates under a joint venture company called President Cambodia, in which Thai President Foods and Saha Pathanapibul each hold 30% and a Cambodian partner holds the remaining 40%.

Mr Petch said the company's business in Hungary is performing quite well, but there are no plans to expand there because of high wages.

"Wages in Hungary have almost doubled from the time we established our business there five years ago," he said. "We are finding new measures to deal with employment costs and expect to apply more automated production systems."

Thai President Foods had a test run for an automated system at the Mama factory in Lamphun. The system is expected to be expanded later to other factories in Rayong and Sri Racha, Chon Buri.

If the expansion works, Mr Petch said the company will install automation at the Hungarian factory. In 2018, Mama's sales in Hungary were about 260 million baht.

Poj Paniangvait, the company's president, said Thai President Foods' revenue in 2018 was 12.46 billion baht, up 5.5% from 2017. Net profit rose by 9.4% to 2.5 billion baht.

Pun Paniangvait, manager of President Office, said the company this year aims to increase revenue by 3.5% from last year, expand further into premium products and launch Mama in online channels.

"We are trying to invest in new sectors after expanding to the Japanese restaurant and property business last year," Mr Pun said.

TFMAMA shares closed Friday on the Stock Exchange of Thailand at 157 baht, up one baht, in trade worth 47,160 baht.

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