Saha Pathanapibul Plc, the marketer and distributor of Mama instant noodles, believes the Thai instant noodle market will continue to grow this year despite the country's stagnant economy.
Vathit Chokwatana, president and executive director of Saha Pathanapibul, said the Thai economy this year is expected to be worse than last year, hampered by the global economic slowdown, sapping demand for the manufacturing sector.
Moreover, the purchasing power of upcountry consumers remains weak. The company is trying to work with upcountry dealers to supply goods and find business solutions, he said.
"Faith in Thailand's economic performance this year is contingent upon the recovery of the global economy," said Mr Vathit.
The government's plan to increase the daily minimum wage to 400 baht nationwide starting from Oct 1 will affect the company, but on a manageable scale, he said.
Mr Vathit said he is concerned the planned wage hike will affect small and medium-sized enterprises (SMEs).
"If some SMEs are unable to bear rising production costs and close down, the impact will bog down the sluggish economy," he said.
While Mama products are affected by rising transport costs and unstable palm oil prices, the price of wheat flour is declining and the company estimates these costs are still manageable, said Mr Vathit.
"As our products are considered a mass market item and the costs are still manageable, we will try to maintain the current price as long as we can," he said.
Mr Vathit said the local instant noodle market grew by 10% in the first four months of this year and the company's sales were in line with the market.
Instant noodles are considered a low-cost product, with demand for such goods increasing when people experience a drop in income, often dubbed the Mama index.
However, he said he disagrees with this hypothesis, noting that Mama's sales grow regardless of the economic conditions.
Mr Vathit did not reveal the target growth for Mama this year, but said the overall instant noodle market has started to enter a mature stage.
However, the premium instant noodles segment, which accounts for 20% of the market, still has room to grow, he said.