Dairy agency to invest Bt1.5 bn to boost capacity

This largest expansion in the 50-year history of the DPO would prepare it to cash in on export opportunities when the Asean Economic Community goes into full effect in 2015.
A Bt1-billion UHT (ultra-high-temperature processing) plant would be built on the 2,000-rai (320-hectare) site of its main factory in Saraburi’s Muak Lek district. This plant can also produce powdered milk.
The rest of the budget, if approved, would be spent on a factory on a 100-rai site in Lampang to process raw milk from suppliers in Chiang Mai, Chiang Rai and neighbouring provinces.
Chairman Thavatchai Samrongwatana said yesterday that the organisation was studying this expansion plan and expected to complete the study in a couple of months. If the Cabinet approves it, the project will be completed and production started within three years.
After the state enterprise’s total dairy production capacity expands from 500 tonnes a day to more than 600 tonnes, it will be ready to serve regional markets, including Laos, Cambodia, Burma, Malaysia, Vietnam and the Philippines, after the AEC is implemented.
Deputy director Noppadon Tunvichien said the DPO planned to penetrate the fresh-milk market this year by seeking business partners and distributors.
Within five years, the fresh-milk business should contribute at least 10 per cent of total sales, up from about 5 per cent of Bt6 billion revenue last year. Most of its sales are from UHT milk products.
However, with many negative factors – including the global economic slowdown and declining purchasing power in the local market due to the recent massive floods – the DPO has lowered this year’s sales target from Bt7 billion to Bt6.3 billion, which is still 5 per cent higher than last year.
Rising raw-milk and labour costs are among the other key considerations that persuaded the DPO to revise its forecast. The government will implement its policy this year to raise the minimum wage for workers.
But the retail prices for all of the DPO’s dairy products will remain unchanged until the end of this year.
About 65 per cent of its products are for commercial sale while the rest are supplied to primary schools across the country, Noppadon said.
The DPO is also seeking tourism income like other leading dairy farms. Yesterday it introduced the “Cowboy Country Festival and Fun Fair” at its Muak Lek ranch. The festival is expected to bring in about Bt50 million during its week-long run from January 11-17.