Orchid business aims to double growth, improve profit margin under 5-year plan

With 36 years’ experience in the business of exporting orchids, Prayoon Orchids founder and managing director Prayoon Ployphommas acknowledges that the company has been at a disadvantage in regard to floral technology in particular, when compared with orchid producers from advanced markets – and especially the Netherlands.
For example, for Phalaennopsis orchids, his company’s plants take 25-26 months to reach maturity, whereas Dutch orchid producers need only 18 months, he said.
On price and quality, Prayoon Orchids is able to attract customers, but some buyers favour spending their money if an orchid wholesaler can deliver flowers within a shorter time, he added.
He explained that orchid exports globally are divided into three categories: cut flowers, for which Thailand is the largest exporter, although this advantage is offset by high competition in the segment; potted orchids, which have a low margin and also high competition; and orchid tissue culture.
“Most Thai exporters ship tropical orchid tissue culture, but we produce only spring orchid flowers, as we don’t have competitors in this segment,” Prayoon said.
“We have always told ourselves that we have to go to high technology in order to improve efficiency, but this takes time; meanwhile, we have to open new markets, especially where there are no problems with plant quarantine, as that is a high cost for orchid buyers,” he said.
As a wholesale exporter, Prayoon said the company must help save costs for overseas buyers, especially on transportation.
Orchid exports in general are transported by air, but the company can also export by sea thanks to its innovative production.
The company’s innovation enables customers to save up to Bt60 million per shipment, he added.
Prayoon decided to draw up a five-year business plan to maximise orchid production, and to open up his orchid farm business in Khao Yai, Nakhon Ratchasima, as a channel for both foreign and domestic customers who want to see its range of flowers before making a final decision on what to purchase.
“Having a public garden, apart from a laboratory and private plantations, will help us to open up markets more easily, as customers can visit the garden and tell us what types of orchid they want in the next few months.
“We are able to serve the right products to the right markets. Moreover, we can see the investment ability of each customer, and the character of each customer, in order to offer the right services to them,” he added.
The company opened its garden at the end of last year, since which time there has been good feedback from visitors, many of whom have ordered orchids from the company for the first time.
Having the garden enables it to supply flowering orchid plants throughout the year, while this type of business provides a higher margin than merely selling orchid plants and tissue culture, the company founder said.
A flowering orchid plant in a bottle sells for Bt50, while a bottled plant not in flower fetches just Bt10.
Prayoon Orchids targets annual growth of 10 per cent – double the current level – thanks to implementation of the five-year plan, he said.
The plan should also attract customers within Thailand, after the company exported 100 per cent of its output during its first 35 years in business.