Thaifoods Group Plc (TFG), one of the country's leading chicken and pig producers, looks set to spend 3-3.5 billion baht to expand its business this year, especially through the opening of new retail outlets.
Chief operating officer Phet Nantavisai said 2 billion baht would be used to expand the company's retail business by opening 180 new branches of Thaifoods Fresh Market, TFG's chain of retail shops, which bring the total number of outlets to 400 by year-end.
Each new shop would cover 300 square metres, requiring an investment of 8-10 million baht and 10-12 employees, he said.
The new shops would mostly be opened in the northeastern region, central region and lower part of northern Thailand, where the market is still less competitive. TFG's retail shops sell various products ranging from chicken, pork, and seasoning products to frozen food, ready-to-eat and ready-to-cook food to consumers at reasonable prices, according to the firm.
Mr Phet said the remaining 1-1.5 billion baht would be used to improve TFG's existing feed mills and grow through the establishment of new feed mills as well as expand its space for breeder pig farms in the central region, including the provinces of Chai Nat, Nakhon Sawan and Phichit. This investment budget would also include strengthening the pig supply chain and its own feed mill in Vietnam.
"As the livestock business has high risk in terms of product prices, raw material prices and the distribution channel, we started our retail business by opening two Thaifoods shops in Ayutthaya province in 2020 to sustain our sales, profit and distribution channel. We also strengthened our supply chain while reducing our production costs," he said.
According to Mr Phet, as the country's overall export business and HoReCa (hotel, restaurant and catering) business became sluggish due to the Covid-19 pandemic, the firm adapted its strategy by opening more of its own retail outlets.
Before 2020, the chicken business accounted for 40-50% of the company's sales, with pork accounting for 20-30%, and the remaining 20-40% generated by sales of other products.
TFG's retail business now performs exceptionally well, with its revenue contribution expected to represent up to 20% of its sales this year or around 12 billion baht in value, up from a ratio of 15% last year, representing 7.8 billion baht.
"Thaifoods shop is our new S-curve business unit and helps transform TFG into becoming a market-driven company, from a production-driven one. We expect the number of Thaifoods Fresh Market shops to reach 1,000 within 2026 and boost the revenue contribution of the retail business to a level of 30-40% in the future,'' Mr Phet said.
In the first quarter of this year, TFG reported its revenue rose by 31% to 13.8 billion baht. The growth was driven by growing demand for chicken, meat and sales from its retail shops thanks to the recovery of tourism and the economy.
TFG's sales revenue tallied 52.3 billion baht in 2022. Of the total, 23.3 billion baht came from poultry, 12.5 billion from swine, 8.53 billion from feed mills, 7.8 billion from the retail stores and 234 million from other areas.