Chia Tai to expand R&D on seeds in South, SE Asia
CHIA TAI CO, a Thai producer and distributor of agricultural products, has set aside an investment budget of Bt300 million to expand its distribution channels and for research and development of vegetable seeds in South and Southeast Asia next year.
India, Bangladesh, Myanmar, Vietnam and the Philippines are the main countries where Chia Tai Co will conduct R&D on seeds, chief operating officer Manas Chiaravanond told a news conference yesterday to celebrate its 75-year partnership with Japan’s Takii & Co. “We have now had distribution channels in South and Southeast Asia for more than 20 years, but our investment next year will integrate marketing and research and development overseas. This will help us know what our customers want and allow us to provide products that meet their demands,” he said.
Manas said that normally, the company spent between 10 and 18 per cent a year of its annual revenue from sales of vegetable seeds on R&D.
“Our research and development focus on hybrid vegetable seeds for the farmer only. We are not developing genetically modified organisms,” he said.
Meanwhile, the company will join with its Japanese partner Takii & Co to develop products and export vegetable seeds together.
“We will import some seeds from Takii & Co and re-export them under our brand, Chia Tai, as Takii & Co will also import our vegetable seeds for export under the Takii brand. This will help both firms expand our exports next year,” Manas said.
The aim is to boost Chia Tai’s sales of vegetable seeds by more than 50 per cent in 2016, Manas said.
This year, the company estimates that its seed sales will total US$65 million (Bt2.3 billion), while the next year’s sales revenue from vegetable seeds will reach $97.5 million, more than 70 per cent from exports.
Vegetable seeds currently account for only 10 per cent of Chia Tai’s total sales revenue of $500 million to $600 million a year. The rest is from other agricultural products such as fertiliser and plant-protection products. This year, Chia Tai targets total sales worth about $500 million because of the drought that had an impact on the demand for agricultural products. This impact will continue into 2016, when total sales value should be around the same as this year at $500 million, chief executive officer Manu Chiaravanond said.
Chia Tai Co and Takii & Co have had a strong relationship sharing knowledge about vegetable seeds since 1983. The two companies set up a 50:50 joint venture to research and develop watermelons in Thailand in 1992.
Takii & Co is the sixth-largest seed producer in the world. The company celebrates its 180th anniversary this year.
Kazuo Hatsuda, senior executive director of Takii & Co, said after the initial R&D success with watermelons of its joint venture with Chia Tai, the group was also interested in developing other seeds with its Thai partner in the future if both companies see an opportunity.
“We cannot say now what we will do the next for research and development after the watermelon [project], but we are in a strong partnership to do business in Asia,” Hatsuda said.
