Union Food turns focus on domestic, Asean markets
Union Food Industry, Thailand's leading sesame-oil producer under the Double Dragon brand, has changed strategy to focus more on the domestic and Asean markets in order to achieve annual growth of 20 per cent.
The company is optimistic about the Thai and regional economies given the strong promotion of domestic consumption and upcoming Asean market integration, which will help drive sales.
Managing director Ananda Wangwanitkul yesterday said the firm expected 20-per-cent expansion in sales to Bt400 million this year, mainly on the back of domestic growth.
"In the past 36 years, the company has focused mainly on exports. However, since the global economic slowdown and the problem of the baht's appreciation, the firm has shifted focus to the domestic market," she said.
About a half of Union Food Industry's income normally comes from exports, but it expects to increase the proportion of sales accounted for by the domestic market by 10-20 per cent next year.
Following the rising trend towards the consumption of healthy food, overall domestic sales of sesame oil have increased by 50 per cent in the past few years, with a current annual market value of about Bt800 million. Double Dragon is the leading brand, with a market share of about 50 per cent, said Ananda.
Sixty per cent of its domestic sales are for industrial use, 20 per cent for restaurants and the remainder for modern traders and wholesalers.
The MD said the firm was however targeting a significant increase in sales for end users over the next two years. It is spending Bt10 million on marketing promotion this year in order to increase brand recognition among consumers.
She added that the strategy to promote brand awareness was also aimed at ensuring competitiveness following implementation of the Asean Economic Community in 2015, as a number of foreign products have already entered the Thai market.
There are about 10 players in the industry, most of which are local brands. However, products from Malaysia and Singapore are entering the country, presenting a heightened challenge for Thai brands.
To serve business growth, the company invested Bt50 million in expanding its production capacity at the plant in Nakhon Pathom's Sam Phran district two years ago. It can now produce about 100 tonnes of sesame oil per month.
Although the company is strongly promoting domestic sales, it will continue to export its products, Ananda said.
Among the more than 10 major overseas destinations for Double Dragon oil are the United States, South Korea, India, Japan and Cambodia.
