Duni (Thailand) Co, a Thai-Swedish paper napkin manufacturer, plans to spend 300 million baht to double its production capacity at its Asia manufacturing base in Samut Prakan, aiming to capitalise on a rebound in demand in the HoReCa (hotel, restaurant and catering) market.
Chief executive Pravit Techavijit said following an initial investment of 720 million baht in 2016, Duni plans to allocate 300 million baht to expand its business in Thailand this year and next year.
Of the total investment, 190 million baht is for the first phase in 2023 to acquire a five-rai plot and make adjustments to an existing building. The remaining 110 million baht is for the second phase next year to install new machinery.
With this investment, its paper napkin production capacity will increase to 6,000 tonnes per year in 2024 and 8,000 tonnes per year in 2025, from the current 4,000 tonnes.
Furthermore, the expanded factory will be capable of producing a wider range of products to meet future market demand. Thailand is Duni's third factory for paper napkin production worldwide, following Germany and Poland.
"Thailand was selected as the production and distribution base for both Thailand and other Asian countries because it is located in the centre of Asia. Thailand also benefits from free trade agreements with several countries, leading to attractive import tariffs. Moreover, the Thai labour force is highly skilled, and the costs are relatively low," said Mr Pravit.
The food industry and the HoReCa market in Thailand are substantial, he said, citing National Statistical Office reports of 24,400 hotels nationwide, with 3,660 of them, some 15%, being four-star hotels or higher.
Thailand also boasts 32,300 middle- and upper-range restaurants. According to data from Kasikorn Research Center, the value of the catering business is projected to reach 850 million baht.
These figures support the company's decision to expand its presence in the market and invest in Thailand.
Mr Pravit said after expanding production capacity, Duni plans to expand its paper napkin products in all segments to the Indian market by appointing distributors in five major cities, including Delhi and Mumbai.
"The company sees immense potential in India due to its large population and an estimated 3 million weddings per year," he said.
Duni exports paper napkins to countries such as Australia, New Zealand, the Maldives, Chile, Mexico and Argentina as well as Asean countries, excluding Malaysia.
The company plans to export its premium paper napkins to Japan, New Zealand and Australia with the increased production capacity.
In the domestic market, Duni will also introduce "Duni Letto", a new premium dining napkin brand that is environmentally friendly, targeting the HoReCa industry in Thailand and Asia.
"The potential of the HoReCa market in Thailand is promising due to the high level of domestic consumption," added Mr Pravit.
Some 95% of Duni's paper napkin output is in the business-to-business sector, but the company intends to expand into the modern trade market to cater to business-to-consumer customers.
Duni expects sales of 420 million baht in 2023, up from 400 million last year, with goals of 550 million, 700 million and 1 billion in 2024, 2025 and 2026, respectively.