Betagro in Northeastern Expansion Drive

by 5m Editor
30 March 2012, at 8:02am

THAILAND - As part of its goal to become the country's leading integrated pork supplier, Betagro Group plans to expand its processing operations, the latest of which is in Khon Kaen, while looking for other ways to generate value-added income from the domestic market as well as from exports.

"We can't access the local market in every province, but our advantage in having a good distribution network and [our own] shops will boost our new customer base through high-quality meat and generate high-value prices for us," said chief operating officer Vasit Taepaisitphongse.

He said this year's expansion would increase the group's share of the country's pork business from the current 52 per cent to 68 per cent.

The Nation reports that last Friday, the group's new processing plant in Khon Kaen was officially opened as its fourth such facility after the plants in Lop Buri, Chiang Mai and Phatthalung.

While the new Bt100-million plant has the capacity to process 480 pigs per day, it is initially handling 300 animals daily, Mr Taepaisitphongse added.

The group also plans to open three new regional offices in the northeastern provinces of Bung Kan, Nakhon Ratchasima and Si Sa Ket, as well as unveiling six new Betagro shops in the region this year. This will give it 30 stores around the country.

Betagro is also set on becoming the Kingdom's leading pork exporter through its five-year business plan to achieve an integrated breeding cycle, including 140,000 great-grandparent pigs. This high-quality stock will enable the group to breed high-quality swine through grandparent and parent stock, he said.

The group also sees an opportunity to set up chicken-processing plants as well as a fishery business in the Northeast.

Senior vice president Narongchai Srisantisaeng said the group is also looking for a suitable location in Yasothon, Amnat Charoen, Surin, Ubon Ratchathani or Si Sa Ket to set up another pork-processing plant.

The decision is mainly dependent on the great-grandparent pig supply and labour factor in the region. The group expects that overall pig-processing capacity in Khon Kaen alone will reach 5,000-6,000 animals per day within the next six months.

The group's business in the Northeast has grown rapidly from sales of Bt450 million 10 years ago to Bt5.5 billion last year, reflected the expanding economy and purchasing power of consumers.

Moreover, there are many food-manufacturing businesses for which pork is an important raw material, such as Vietnamese-style menus, Chinese sausage and other traditional food shops, he said.

Betagro's overall sales in the Northeast are targeted at Bt6.5 billion this year, with revenue from the region expected to grow by an average of 15-20 per cent annually, the executive added.

Mr Taepaisitphongse said the group was now more focused on business development from upstream (feed meal) through downstream manufacturing (processed food).

In addition, the group is penetrating the retail market more effectively through its high-quality meat.

He added that the upcoming minimum-wage hike to Bt300 per day on 1 April, as well as the increase in the starting salary of new graduates, would increase the group's production costs by 10 per cent.

Total group sales this year are projected to reach Bt68 billion, with regional food business accounting for Bt29 billion, chicken for Bt22 billion, feed meal for Bt11 billion, pork and animal health and medical products for Bt3 billion each, and farm-equipment business for Bt900 million.

The major factor supporting the target is the completion of the group's new feed-meal plant in Lop Buri.

The group reported overall sales of Bt60 billion last year.

The opening up of the regional market under the Asean Economic Community in 2015 has already led the group to set up businesses in Viet Nam, Cambodia and Laos, while a representative office in Burma will be established in the near future.

In Viet Nam, Betagro has formed a joint venture with a local partner to operate an aquacultural feed-meal plant and animal-medicine trading business. The focus on Cambodia is on feed meal, with an investment of Bt500 million for an initial 12,000-tonne-per-year plant and a second 1,000-tonne phase to be set up in the near future, and on pig-farming business, Narongchai said.