Burapa, Saha team up to cut cost
Burapa Prosper Co, the 41-year-old rice flour manufacturer, has teamed up with Saha Group, the country's leading consumer product conglomerate, to cope with the impact of higher operating costs due to the Russia-Ukraine conflict.
Managing director Sathaporn Paisanburapa said Burapa Prosper recently appointed Saha Pathanapibul Plc, the distribution arm of Saha Group, to distribute its rice flour via traditional trade channels across the country this month.
In addition, the company also plans to expand its rice flour through a modern trade channel on its own for the first time, starting with Makro, the chain of cash and carry stores, in April.
"For traditional trade, the logistics cost is very important. We have talked with Saha Pathanapibul to cope with the much higher costs brought about by the escalating Russia-Ukraine conflict. We decided to change the size of our product packaging and the raw materials used," said Ms Sathaporn.
The company's operating costs have risen by 5%, so if oil prices continue to increase, the company would have to revise its product prices in the third quarter and shift production of its mixed rice flour to an original equipment manufacturer to ensure cost-effectiveness.
Moreover, the company has installed boilers at its Chon Buri factory which can use both biogas and oil and is ready to switch from fuel oil to biogas if the oil price situation deteriorates.
Ms Sathaporn said despite the prolonged Covid-19 outbreak and escalating Russia-Ukraine conflict, the company still puts more focus on expanding its business in Europe and the US this year after setting up a strong business in Asia.
"The Russia-Ukraine conflict may result in uncertainty for our business, but we've learned to manage this risk because we believe that the food sector still has growth potential,'' she said.
Sales of Burapa Prosper totalled 600 million baht in 2021. Of the total, 55% was from the domestic market and the remainder from exports.
The company exports its products to over 30 countries worldwide. Some 60-70% of export sales came from the Asian market.
"We will put more focus on expanding our rice flour in Europe and the US because we are seeing continuously increasing demand for our rice flour, particularly used for producing premium pet food in the past 3-4 years,'' Ms Sathaporn said.
With the business plans, the company expects its sales to reach 1 billion baht this year and amount to 1.2-1.5 billion baht in the next three years.
Burapa Prosper has three rice flour factories in Chon Buri, Cambodia and Indonesia.
It has a total production capacity of 100,000 tonnes per year.