P&F sets sights on becoming brand enter

P&F Agro Industry Group consists of four companies, which operate upstream through to downstream in the pork sector, with all of the group’s pork products supplied to food businesses, including restaurant chains.

Apisit Thanasumphun, founder and president of the group, said that even though the group was in the SME (small and medium-sized enterprise) category, it should think about how to add value from the existing raw material to strengthen its long-term growth.

P&F is a medium-sized customer of Krung Thai Bank, with a credit line of up to Bt500 million.

He said that although borrowing from a bank was a key source of funding, when the company needed to grow, it should have another source to back its financial status – and listing in the stock market was seen as the best option.

As an SME, partnership is the key element of sustainable growth, he said. With the business-to- business (B2B) model, the company must maintain its quality level and cost management because the requirements of business customers are different, he explained.

Apisit said that when such customers were set to expand, P&F – as the supplier – had to grow as well, which was why his company required several hundred million baht to support its growing farm operations and the expansion of its pork carving and processing plants.

P&F is also seriously considering expanding its business line from B2B to the business-to customer (B2C) model, by developing its own brands for retail customers.

The group has started a pilot project in building brand awareness among retail customers through its stand-alone restaurant, Mitasu Grill.

Apisit developed his business as a pork-meat processor and manufacturer, as he realised that processing would help him tackle the problems of volatile pork prices and pig disease.

"Being an OEM [original-equipment manufacturer], if we cannot control the price and the disease, the business cannot survive; ready-to-cook and ready-to-eat pork [products] are therefore the choice for us. To ensure the quality of our pork, we ask a third party to go to the Livestock Development Department to help check the quality of our pigs before undertaking the processing," he added.

As to the problem of pork-price volatility, P&F offers its business customers one-year forward contracts to help ensure they have sufficient stock to meet demand during promotional periods.

"Before making the products, we hold discussions with customers until we are moving in the same direction, and what we and the customers get from that is product synergy," said the company head.

About 80 per cent of the company’s annual sales of Bt2 billion go to the domestic market. The remaining portion destined for overseas markets is not exported directly, as P&F supplies processed pork to Japanese companies in Thailand, which then ship the meat to Japan.

The company is also considering supplying ready-to-cook pork to neighbouring countries, due to the upcoming implementation of the Asean Economic Community, which is attracting more hotel chains, restaurant chains and other catering-related businesses to the region, he added.