NRF flaunts vision
‘NR Instant Produce’ (NRF) flaunts vision as first Thai firm to pioneer ‘Plant-based food’ to support emerging global megatrend in food consumption Ready for IPO debut to raise capital in stock market
published : 9 Sep 2020 at 17:15
“NR Instant Produce Public Company Limited (NRF), leading manufacturer and exporter of food and condiments, is getting ready to issue not more than 340 ordinary shares in an initial public offering (IPO) in the bid to raise capital in the Stock Exchange of Thailand (SET). On the part of the Company executives, they have demonstrated the clear vision to become the world-leading food producer and the first Thai company to move forward as a leader in the field of plant-based food with the policy to become “The Purpose-Led Company” – meaning a company that drives the organisation and the brands towards clearly defined goals. The Company is also determined to conduct its businesses in a sustainable manner so as to become the top-of-mind processed food manufacturer at the international level.
Mr. Dan Pathomvanich, Chief Executive Officer, of NR Instant Produce Public Company Limited (NRF), revealed that the Company is preparing to list in the Stock Exchange of Thailand and to issue the IPO to increase its financial strength and the capability to expand its businesses to support the advance toward the leadership in the food industry at the global level and for the Company to become the “platform for future food”. NRF is well recognised as the manufacturer, procurer and distributor of condiments, processed food and processed food ingredients, vegan food without eggs and milk in the ingredients, food from plant protein and instant drinks in both liquid and powder forms, as well as non-food consumer products in V-shape packaging (friendly to consumers and the environment).
The Company’s long-term goal is to become the food producing company of the future with the emphasis on creating sustainability for the entire food industry ecosystem through the policy to become “The Purpose-Led Company” to leverage the Company’s exponential growth with the sales revenue increasing to 3,000 million baht within the next five years (2024) under the strategy to penetrate the specialty food market which has high growth potential and is popular worldwide. NRF will concentrate more on Thai food and ethnic food, plant-based food, and consumer-friendly functional products.
NRF’s short-term and long-term business plans are made up of: 1) Production capacity expansion to support increasing orders by investing in the acquisition of food manufacturing facilities that have received all standard certifications similar to NRF’s; 2) Expand the V-shape packaging market for food products and non-food products for domestic consumption and export. The current COVID-19 situation has led NRF to produce hand sanitising gel in V-shape packages. Future plans included the cooperation with Fluid Energy Group Limited, the leader in environmentally-friendly chemical innovation to utilise V-shape machinery to produce sanitisation products for sale in Canada, the United States and many Middle Eastern countries; 3) Increase the capacity to produce konjac noodles to satisfy the growing health food market after the Company’s products in the forms of fresh konjac noodle and ready-to-eat konjac dishes have become popular among consumers. These ready-to-eat items include Pad Thai konjac, Green Curry konjac, Tom Yam konjac, and Japanese-style konjac or Marinara konjac.
In addition, the COVID-19 situation has led to the scarcity of konjac noodle imported from China and the search was on for konjac sources in other countries. Therefore, a major client of the Company, which has been a leader in the konjac products, have entered into an MOU to contract the production for the next three years to produce 15 million units of konjac products.
And 4) To accelerate the learning process and food production development from plant protein in a joint venture with The Brecks Company Limited which brings into the picture more than 27 years of experience in the processing of food products from plant protein. The newly set-up company in England, Plant and Bean Limited, accepts orders to process food products from plant protein to many world-leading food companies to satisfy the consumers’ demand and to unceasingly develop high quality products through the ramping up of production capacity from the current 3,000 tons to 36,000 tons by 2021 so as to support the growth in customers’ demand. This also includes the plan to expand production base to the United States in the future and the partnership with Meatless Farm of England which is the producer of plant-based hamburger meat from rice and bean proteins as well as radishes which provide the look and taste of real animal meat. The Company set the target to become the distributor of Meatless Farm products in Thailand and Southeast Asia.
In addition, the Company has also entered into a joint venture in Big Idea Venture and the 1,500-million-baht New Protein Fund which is an accelerator fund that provides capitals to support startups involved in food production with plant protein and the advice on how to run a successful business. The aim is to invest in 100 startups in three years. At present, investment has been made in 27 startups, more than half of which are already realising revenue. This move is aimed at fostering good relationship with food tech startups and creating opportunities for the Company to become the producer for these businesses in the long run with the Company becoming the “preferred co-packer” for these startups
These investments will also provide access to new technologies that can be adapted for use in the Company in the future to increase productivity and production efficiency. Lately, the Company has invested in Phuture Food Limited (Phuture), one of a food tech startups in Asia that has been attracting interests from global investment firms. This company concentrates on developing synthetic minced pork mainly from soybean protein. The investment was to foster good business relationship and the opportunity to become a manufacturer for Phuture products, when they are ready for the market.
To support manufacturing for startups and plant-base food customers, in addition to the joint venture agreement with plant-based food producers in England, the Company has a plan to build a new plant-based dedicated manufacturing facilities in Thailand with the target to take in 30-40 percent of revenue from all plant-based products by the year 2024.
In addition, a plan is afoot to invest in the construction of NRF Global E-Commerce Platform in cooperation with Boosted Ecommerce Inc. (Boosted) to jointly invest in the branded E-commerce (consumer package brands: CPG) of third-party sellers with high sale volume in the Amazon E-commerce marketplace and already posting profits with highly popular products (*Third-party sellers mean product sellers on amazon.com who are not related to amazon.com Inc.).
Following the co-investment, the Company will, together with Boosted, further develop the businesses invested in to sustain growth, such as the renovation of the supply chain, the expansion of the scalability business, in order to expand the online businesses and increase the sales channels to reach consumer groups worldwide. The Company believes that there is an opportunity for growth with the statistics from Statista indicating that in Q2/2020 the total sales made by third-party sellers made up approximately 53 percent of total Amazon sales (During April-June 2020, Amazon’s total sales was US$88.91 billion or approximately 2,700 billion baht).
Boosted1 was a successful startup with already about US$20 in funding, and a plan to invest in diversified E-commerce businesses and brands, numbering about 100 brands to create the future “The Modern Procter & Gamble” as a major consumer product manufacturer within four years and the goal to list on the stock market in the future. At present, Boosted already invested in six brands and is in the process of considering investing in other additional brands in many businesses.
The Company is cooperating with Boosted in two areas: A joint venture with Boosted to invest only in the food business with the Company being the majority shareholder; and the co-investment in Boosted Ecommerce Inc. to invest in other types of E-commerce businesses.
Mr. Teerapong Lorratchawee, Director and Managing Director of NRF, said the Company is recognised as the industry leader in the manufacturing and exporting of processed food, quality condiments and food made from plant-based protein, with products covering more than 2,000 SKUs and more than 500 food recipes in three business groups:
1) Ethnic Food (OEM/Private Labels and NRF brands) categorised into 1.1 OEM/Private Labels, making up of food ingredients and condiments, ready-to-cook food, ready-to-eat food, and dry and liquid instant drinks and microwaveable food, such as rice and noddle dished or different types of sauces packed in readily microwaveable packaging. And 1.2 Products under the Company’s own brands totalling six brands consisting of curry and tom yam ingredients under “Por Kwan” brand; food ingredients with Asian flavors under “Lee Brand”; ready-to-eat food in microwaveable packaging such rice dishes and Pad Thai under “Thai Delight” brand; food ingredients and instant soup under “Shanggie” brand; instant drinks in dry and liquid forms under the “DeDe” brand; and food ingredients and chilies in snack form under the “Sabzu” brand.
2) Plant-based food group made from plant protein into food items that are good for health and vegan & vegetarian food dishes that have their tastes and appearances enhanced to resemble animal meat products. The premium-grade raw materials used are carefully selected with the ultimate consideration for the health and well-being of the consumers. These include synthetic meat made from jackfruits and eggplants, shirataki or konjac noodles. At present, the Company has already invested approximately 250 million baht and plans to further invest another 400 million baht to expand production capacity both in Thailand and abroad, as well as to become the owner of the plant-based food production technology to leverage exponential growth of the business well into the future, and, 3) Functional product business.
3) Functional product business which are non-food consumer products contained in packaging that are friendly to consumers and the environment (V-shape). These include alcohol gel products in environmentally-friendly packaging that are easy and convenient to use and of the highest quality. In the future, the Company is in the process of expanding into other products, such as food, food supplements, cosmetics, and personal hygiene products.
At present, the Company has two manufacturing facilities – one in Samut Sakhon Province to produce noodles and a factory to produce sauces and condiments. In addition, the Company has invested in the 15 percent of fully paid-up ordinary shares of City Food Company Limited with locations in Ratchaburi and Nakhon Pathom to increase the production capacity for ethnic food and plant-based food. A plan is also afoot to buy another 85 percent of the shares within 2020 to further expand production capacity to support growth in the short term. The Company has also received many international standard recognitions, namely, IFS, BRC, GPM, and HACCP which clearly reflect the safety and the assurance of customer satisfaction.
In addition, the Company has initiated the Carbon Footprint project in October 2019 with the aim to become a zero carbon organisation. As of the present, the Company has received a certificate from Thailand Greenhouse Gas Management Organisation (Public Organisation) (TGO) as an endorsement that the Company is “carbon neutral” – a first among private food manufacturing companies in Thailand.
Ms Penhurai Chaichatchaval, Chief Financial Officer of NRF, said the H1/2020 performance of the Company shows a revenue of 603.7 million baht and a net profit of 41.1 million baht which is a growth compared to the same period of the previous year of 517.4 million baht in revenue and a 16.3-million-baht net profit. This was the result of the expansion of manufacturing base to support the expansion of the products with growth also from the export factor to every market, namely, America, Europe, Oceania, and Asia, as well as the effective management of production costs and operation.
This was helped by the start of revenue stream from new business groups, including the non-food consumer products contained in packaging that are friendly to consumers and the environment (V-shape). Following the issuing of ordinary shares to the public, the Company plans to use part of the capital to repay all long-term loans which will allow the Company to reduce its debt burden and increase the liquidity while also utilising the fresh capital to expand the busines according to the future project plans reaching to 2022 (In H1/2020, the Company had expenses unrelated to the regular business operations arising from acquisitions and/or listing on the Stock Exchange of Thailand, amortisation resulting from acquisitions, and loan interests on acquisitions totalling 63.6 million baht).
Ms Veena Lertnimitr, Executive Vice President Investment Banking Function, Siam Commercial Bank Plc., in the capacity as the financial advisor, said that the Security Exchange Commission (SEC) has already approved the filing of NR Instant Produce Public Company Limited. NRF is considered to be a company with high growth potential with its competitive advantage as being among the first Thai companies to be ready with the manufacturing, technology, and new innovations in the food sector to advance into the food product market of the future. Moreover, the Company also has an established and experienced research and product development team in place for more than 30 years to develop a variety of products, from manufacturing facilities both in Thailand and abroad with high, internationally-recognised production standards.
The international market of the Company covers more than 25 countries including the United States, England, Germany, France, Australia, South Africa, Japan, and Malaysia. Also, the Company has a plan to expand its branded E-Commerce which is another highly effective distribution channel for products that has responded to the changing consumers’ behavior, particularly through online transactions. Furthermore, the Company can directly access the data on customers preference which is the first time that the Company can directly access end-customer data that can be used to analyse market trend and develop future products.
NRF has 1,421,040,400 baht in registered capital, divided into 1,421,040,400 ordinary shares with a par of 1 baht per share, consisting of 1,065,780,300 million baht of fully paid-up capital, making up 1,065,780,300 ordinary shares. The issued IPO will not be more than 340 million shares, or not more than 25.08 percent of all issued ordinary shares and all available shares of the Companies. These are divided into not more than 290 million new ordinary shares and offering ordinary shares by existing shareholders, DPA Fund S Limited, amounting to not more than 50 million shares. Following the offering for sale of the new ordinary shares, the Company will use the realised capital to repay loans, invest in future projects and for use as working capital. It is expected that NRF will be able to list in the Stock Exchange of Thailand (SET) within 2020.