Fruit-snack maker seeks lower costs
Greenday Global, a small and medium-sized enterprise producer of Thai fruit snacks, plans to expand its business into other Asean countries next year to boost the company's growth ahead of seamless trade in the region under the Asean Economic Community (A
The company is studying markets and investment opportunities and seeking a partner to do business in targeted markets, especially Vietnam, due to lower labour costs and availability of similar raw materials.
Chairat Kongsuphamanon, vice president of Greenday Global, said that the company foresees greater opportunities from the AEC, which takes effect in 2015, which will expand the potential market size from 65 million customers to about 600 million.
“Amidst the rising labour and production costs at home, the company is planning to expand its plants to Vietnam to support the company’s growth,” Chairat said.
He said Vietnam was the most interesting market among Asean nations as the labour cost there is half of Thailand. The country also has similar raw materials, mainly tropical fruits, to support the company’s production and exports to other Asean and third countries with zero tariff.
Among other potential countries is Indonesia, because of the high population of more than 200 million, and strong economic growth.
Chairat said the company was facing a higher burden because of the rising cost of labour. Located in Bang Plee, Samut Prakan province, the firm has to increase the daily minimum wage to Bt300 this month. The cost of labour accounts for 5-10 per cent of total production costs. The company employs more than 100 people.
The firm has also tried to reduce the cost of labour by equipping itself with new machines.
“The new machinery will replace some of the labourers. Previously, the firm may have hesitated to buy new machines as they are costly and take time to reach the break-even point,” Chairat explained.
Each machine costs about Bt3 million.
To promote the company’s growth, the firm also plans to penetrate new targeted markets. Among the high-interest markets are those of the BRIC countries – Brazil, Russia, India, and China – due to their high economic growth.
The firm is currently exporting to more than 20 countries, including Singapore, Indonesia, Malaysia, Finland, Spain, Italy, Australia, Japan, France, and Denmark.
More than 75 per cent of the company’s income came from exports. The firm also plans to promote sales in the domestic market by introducing its products to many modern traders this year.
It is projected to double sales from Bt100 million last year to Bt200 million this year.
