Thai Nakorn Patana Co, the maker of Tiffy brand pharmaceutical products, has teamed up with a snack producer, Srinanaporn Marketing Co, to form a new venture to explore the food business in Cambodia and Vietnam next year.
SC Food Products Co was recently set up with registered capital of 300 million baht to explore the food markets in Cambodia, Laos, Myanmar and Vietnam (CLMV).
In the new venture, Srinanaporn Marketing holds a 60% stake and Thai Nakorn Patana the rest.
Viwat Kraipisitkul, chief executive of Srinanaporn Marketing, said SC Food Products will spend 300 million baht to build a food and drinks plant in Phnom Penh, the capital of Cambodia, on a 10-rai plot next year. The company is in the process of seeking investment privileges from Cambodia's Board of Investment.
The investment in Cambodia will be divided into two phases, Mr Viwat said.
The first phase will get under way in August of next year, producing three product lines including the Lotus brand snack, Chocky Wafer and Jele jelly cups. The second phase will produce biscuits in 2019.
The new company plans to earmark 800 million baht to expand its business in Vietnam. Of the total, 300 million baht will be spent to set up its new factory in Ho Chi Minh City and the rest will be used to install new machines.
The factory in Vietnam will be built on a six-rai plot at VSIP Industrial Estate to produce Jele Jelly Beautie in sachet and bottle packages.
The company aims to generate sales of 500 million baht each from Jele products in Cambodia and Vietnam in the first year of operations.
Srinanaporn Marketing Co earlier exported its products to CLMV with sales of 100 million baht per year. The latest move is intended to help the company expand its business faster than in the past.
Sales of Srinanaporn Marketing are expected to reach 6 billion baht this year, below the earlier target of 7.5 billion.
Of the total 6 billion baht, about 10% is expected to come from the export market.
With the expansion in CLMV, the company aims for its export sales portion to rise to 50% of total sales over the next five years.
Supachai Verapuchong, deputy managing director of Thai Nakorn Patana Co, the producer of Tiffy pharmaceutical products, said the venture marks the first time that the company has explored opportunities from a business alliance scheme after 27 years of expanding on its own in CLMV.