Saha Group, Thai President Foods mull power plant, noodle factory in Burma

Boonsithi and Pipat are seeking locations both in Rangoon and Mandalay for their integrated facilities. The biogas power plant will be handled by Saha’s subsidiary Sahacogen, which will produce electricity for sale to the Burmese government. The water produced by the power plant will be delivered to the noodle factory for use in its production process.

Pipat said Thai President Foods already had an instant-noodle factory in Rangoon, which has been operating for about 10 years and is now running at full capacity of about 30,000 cases per month. With the second factory, the company would be able to double production of its instant noodles in Burma, which will serve not only the market there but also India. The expansion overseas is part of the company’s strategy to prepare for tougher competition in the Thai instant-noodle market when the Asean Economic Community goes into full effect in 2015 and lets foreign rivals come in.

“With the government’s regulation set to prohibit the import of palm oil, we, as one of the local instant-noodle producers, will face difficulty in competing with foreign rivals, which will have a cost advantage,” he said.

The instant-noodle market is becoming saturated, with more than 39 packs per head per year in consumption. That is close to many developed markets such as Japan and Taiwan, which annually consume about 40 packs per head on average, he said. 

This year the company will focus more on increasing the sales of cup noodles, which are now only 10 per cent of its instant-noodle portfolio.

“We will launch innovative products with superior quality and prices,” Pipat said.

The company also plans to expand its instant-noodle business into more markets abroad, starting with exports and then setting up factories when the markets are ready. The firm hopes to increase its exports from the Bt1.7 billion expected for last year to about Bt2 billion this year.

“We are now shipping instant noodles to 50 markets around the world. We have already set up factories in Cambodia and Burma. We will also open a noodle factory, costing about Bt100 million, in Bangladesh in March or April to avoid the high import duty, which is 60 per cent,” he said.

Thai President Foods will hold 55 per cent of the factory, while 10 per cent will be owned by Saha Pathanapibul and the rest by the local trading partner in Bangladesh.

Locally, the company will invest Bt500 million in a flour mill in Rayong with capacity of about 300 tonnes per day when it starts operating in 2013, Pipat said. Thai President Foods will hold the majority 60-per-cent stake in the mill, while 30 per cent will be held by Kerry Flour Mills and 10 per cent by President Bakery.

Thai President Foods expects Bt10 billion in sales this year, including exports, up from about Bt9 billion in 2011. Its domestic instant-noodle sales grew by 12 per cent last year.