Oishi looks to output base to meet rising demand in Vietnam; Myanmar also a priority country

OISHI Group Plc could build a beverage factory in Vietnam in two to three years to meet rising demand after launching marketing campaigns there as well as in Myanmar this year.
Oishi Beverage has been selling abroad almost from its inception via local retailers. Last year it began marketing its own products in Laos and Cambodia.

Malaysia is the latest country that it has decided to venture into via Fraser and Neave Holdings (F&N), which was acquired by Thai Beverage last year. Oishi is also a ThaiBev subsidiary.

Oishi is planning to invest about Bt900 million on beverage production efficiency improvements and restaurant expansion this year to support its sales growth target of 25 per cent or Bt15.5 billion.

About Bt8.5 billion of the growth target will come from the food business and Bt7 billion from the beverage business.

It plans to spend about 14 per cent of sales on advertising this year.

Last year its revenue increased 2 per cent to Bt12.4 billion, while net profit jumped 14 per cent to Bt521 million.

“Exports to Malaysia are doing well and there is a possibility that we might move our (beverage) production there to lower costs in the future.

There is a good-sized population but the potential in Vietnam is even better. Vietnam’s population is now getting closer to 100 million and almost everyone drinks green tea. They practically drink more green tea than sodas,” Marut Buranasetkul, president of Oishi Group, said yesterday.

“We will export there in the first one to two years and we expect to open a factory there by the third year. We will begin to campaign in Vietnam this year…and the chance to win in Vietnam is much brighter than in Indonesia, which is a significant market but not on top of our priority yet.

“At the moment, Vietnam and Myanmar are our priority and we plan to be between number one and three in these markets within six years after entering,” he said.

Oishi already has well-established local partners for distribution and production in Vietnam. The country is now the No 1 target for changes in production bases.

The move to Malaysia will most likely be via the existing facilities of F&N, but that will be later on.

“The group is planning to expand by 25 per cent this year via Oishi Food’s restaurant expansion and the plan to increase our concentration on the ready-to-eat industry.

“Oishi Beverage has plans to expand the green tea business via brand creation and new products. The non-green tea business will be concentrating on the full-year marketing campaign. The expected increase in exports will also contribute to our overall growth,” he said.

Jesdakorn Ghosh, vice president for beverages, has revealed that Oishi Beverage is planning to expand its sales by 21 per cent to about Bt7 billion this year.

Her group has liftedd its export growth target to 12-15 per cent or Bt800 million in 2015, after exceeding its 7-8-per-cent target last year, by aiming to build more alliances in Asean, namely in Cambodia, Malaysia, Singapore and Laos, while setting up full marketing promotion activities for each country.

Paisarn Aowsathaporn, executive vice president of Oishi Food, said the company expects food sales to surge 29 per cent to Bt8.5 billion this year from Bt6.6 billion last year.

“We expect to build 40 more branches on top of the current 225 branches this year together with an improvement plan for six existing branches that will accumulate to an investment of about Bt600 billion in 2015.

It has a presence in Myanmar with three branches of Shabu-Shi and is looking to expand to Laos and Cambodia in the coming years.

“We are currently in talks with our networks there and expect things to be clearer this year,” he said.

Oishi Food has set a target to build at least 10 branches in Asean within five years at a cost of some Bt200 million.

“We are also planning to fully attack the ready-to-eat and frozen food industry in 2015 since the industry is expected to grow by 15-20 per cent yearly, at least in the next five years, and we are planning to do this via product quality improvement and product innovation,” he added.

Source: The Nation

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