Thursday, July 18, 2019

Food processing operator finds the right blend for success

Jun 08. 2018
Visit Limlurcha, managing director of Great Oriental Food Products Co Ltd, presents some of the company’s processed food products that are|winning over customers in 30 countries.
Visit Limlurcha, managing director of Great Oriental Food Products Co Ltd, presents some of the company’s processed food products that are|winning over customers in 30 countries.
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VISIT Limlurcha breathed fresh life into the family business started by his father by modernising the food processing operation and adding the company’s own brands to the output under a heightened focus on exports.

 The family company had earlier carried out food processing for products that went out under its customers’ brands. But Visit, now 50, explored ways to expand the business when he began to work alongside his father Somchit Limlurcha after graduating from university. With the new ideas implemented, the company’s export success has led to it generating an average annual income of Bt250 million.

“My father started out in his own business by buying agricultural products such as soybeans and corn from farmers and then selling them to manufacturing plants, which then produced animal feed,” Visit said in an interview with The Nation |recently.

“Then a friend of his suggested that he should move into canned bamboo shoots for export when this friend saw a business opportunity for exports. As a result, my father decided to invest Bt10 million to set up a manufacturing plant in 1987.”

From the start with bamboo shoots, Somchit diversified into the processing of other vegetables and fruit, as production for the bamboo shoots was limited to just two months a year. For the other 10 months, the production lines were kept busy with corn, longans, rambutans and other produce.

For the first year of operations, the business generated sales of Bt20 million, on the way to double-digit growth each year. By the third year, the friend of Somchit said he wanted to exit from a joint venture they had set up. That paved the way for Somchit to train up Visit in the business, with a focus on the export side.

“I then began to learn how to manage the exports while I was in my third year at university,” Visit said. “Then I graduated with a bachelor’s degree business in 1990 and started to work with my father to manage our marketing and exports.”

A move to add the processing of sweet corn in 1990 has paid off for the company, Great Oriental Food Products Co Ltd. Exports go out to 30 countries – including in Europe, the United States, the Middle East, Africa and Australia. Nearer to home the sweet corn is sold in China, Japan, India and Nepal.

Up to 90 per cent of the company’s exports go out under its customers’ brands, with the remainder sold under the family business’s own brands, ATA and All Like. The latter is the brand for products destined for both the home and overseas markets.

The company’s success has created work for some 100 farmers in Tak province. They supply the sweet corn, bamboo shoots and other vegetable and fruit types that are processed at the plant, also in Tak province. These farmers have land amounting to some 3,000 rai in the province.

The company has set aside an investment budget averaging Bt10 million a year for upgrades to the production plant following a move to join the One Province, One Agro-Industrial Product (OPOAI) scheme set up by the Industry Ministry. 

This success has helped the company to cut production costs by about 2 per cent on average. With these savings, it has been able to maintain its net profit margin at a time when the baht’s strength has eroded some of its revenue.

“The stronger baht strong has been having an impact on our revenue since 2016, but we can maintain our net profit growth when we manage our production cost in line with the OPOAI programme,” Visit said.

Visit said that the key to the success of his business has been its focus on quality and the addition of new products, helping it to withstand the pressure from the big players in the industry.

 “We are a small firm in the food industry, but we strive to learn what our customers want and this has helped to differentiate us from our competition in the market,” he said. 


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