Chia Meng revamps line-up to boost share of packed-rice market
Chia Meng Marketing is rebranding and revitalising its product line to double its share of the packed-rice market from currently 10 per cent within three years.
Managing director Sopan Manathanya said yesterday that the company would launch four brands to cover all four major packed-rice segments – Hong Thong (Golden Phoenix) for 100-per-cent jasmine rice, Hong Thip for mixed soft and fragrant rice, Hong Thai for white rice and Hong Thong Life for healthy rice. The line extension is aimed at cashing in on the strong brand awareness of Hong Thong, which is 94 per cent.
The company has a significant share of 23 per cent of the 100-per-cent-jasmine-rice segment, but it has only a small proportion of the other segments, such as white rice, which are seen as potential markets to grow its overall business.
"The market for packed rice was about Bt20 billion last year, with growth of 5-10 per cent projected for this year. With the revamp, we expect to grow faster than the market at about 20 per cent this year. The company posted Bt1.7 billion in sales of packed rice last year," she said.
The company also expects to increase its share of the 100-per-cent-jasmine-rice segment by 4-5 per cent this year.
On a per capita basis, Thailand consumes about 145 kilograms of rice per year, compared with 135kg for India and 104kg for China.
The government’s rice-pledging scheme will damage the local rice industry, Sopan said.
"We think the government launched the pledging scheme to help farmers without considering other stakeholders, such as rice millers and exporters. Any measure should be well balanced and not interfere with the pricing mechanism in the market. It should be free trade and allow the law of supply and demand to work," she said.
The scheme has caused rice prices to surge, Sopan said. For example, 100-per-cent jasmine rice has soared from Bt12,000 per tonne to about Bt20,000. Thailand has lost its advantage against other rice-exporting countries such as Vietnam, which has gained a bigger slice of the world’s market.
This year will be the toughest for the rice business, which needs to deal with higher costs while retail prices are strictly controlled by the Commerce Ministry.
"We are carrying 10 per cent higher costs in the business from rising expenses such as for transport and labour, which have increased by 2-3 per cent so far this year. What we can do at this time is to conduct a cost-cutting programme as well as to retain our customers," she said.
