KCG diversifies via Indoguna acquisition
KCG Corporation Co, a producer and distributor of dairy products, bakery and cookery products, has taken over Indoguna (Thailand) Co, an importer and distributor of fresh food and frozen meat and seafood products, as part of the company's strategic move to diversify its business and reduce business risk in the long term.
The value of the deal was not disclosed.
According to Tong Dhiranusornkit, KCG's vice-chairman and chairman of the company's executive committee, in light of the Covid-19 pandemic, it is quite risky for a company to bank on only one product and one sales channel.
"Business diversification and various sales channels are essential to enable the company to survive in the longer term," said Mr Tong.
Watit Tamavimok, chief executive of KCG, said the acquisition of Indoguna (Thailand), which has more than 300 items in its product line, will allow KCG to possess an extensive range from dairy products to fresh food products.
It will add strength to KCG and reinforce the company's position as an integrated food producer, he said.
"This acquisition is aimed at expanding our business into fresh food, meat and seafood, with hotels, restaurants and catering being our target customers," said Mr Tong. "Fresh food, meat and seafood will be our four business pillars on top of existing core products including dairy products, bakery ingredients and biscuit and cookie products."
In addition, KCG is scheduled to introduce four innovative new products: hemp, ketogenic diet foods, plant-based foods and dairy snacks to support the future trend of healthy food and the growing number of health-conscious consumers.
KCG started its business in Thailand in 1958. Established as Kim Chua Trading Partnership, the company focused on importing and retailing food products such as butter, cheese and canned goods.
The company's sales topped 5.7 billion baht in 2019 before dropping by 13% to about 4.95 billion baht in 2020 because of the pandemic.
Mr Tong said the company's sales improved last year, while it aims to achieve sales of 6.1 billion baht this year.
The company's own business generates up to 70% of its revenue, with 30% stemming from its trading business. The company's products are presently made available via various channels from hotel food services, modern trade and traditional trade.
Damrongchai Vipawatanakul, the company's deputy managing director, said the company will spend 300 million baht to expand its business this year.
Of the total, 200 million baht will be used to upgrade facilities and equipment at its factories in Samut Prakan, with the remaining 100 million baht being used for the company's IT system.
- KCG Corporation