Tropicana Oil banks on R&D for sustainable growth
TROPICANA Oil, which produces cold-pressed coconut oil, has allocated 5 per cent of its annual sales revenue to research and development, convinced that R&D will bring sustainable growth to the company in the global market.
As a result of promoting its hand-pressed coconut oil under the OTOP (One Tambon One Product) scheme at organic fairs, the benefits of pure cold-pressed oil mean the firm’s products have become increasingly popular among health-conscious consumers overseas, said Suradej Ninek, founder and managing director of the business.
The international market now accounts for 70 per cent of sales revenue.
He said Tropicana Oil was attaching importance to R&D as it believes this will help strengthen its current products and enable it to expand the range in the future.
The company’s output of cosmetic products from cold-pressed coconut oil caters to middle- to upper-class customers abroad, with the bulk of foreign sales going to Japan, Australia, New Zealand, Russia and South Korea.
Thanks to R&D, Tropicana Oil can upgrade the quality of its cosmetics to serve customers at the premium end of the market, where demand has increased recently.
The managing director said a new brand, Kalapa, had been launched late last year to cater to this segment.
While Thailand as a whole allocates 1 per cent of gross domestic product to R&D, his company has set aside 5 per cent of revenue for R&D purposes, and has recruited master’s-level staff to help innovate to extract totally pure organic oil from coconut meat and coconut shells.
The company recently brought smart machines to help its employees in charge of extracting oil from coconut meat and shells, in order to increase productivity and save on labour costs.
Smart machinery also prevents human error, the MD said, adding that the company had also purchased a system to make the receipt of orders more accurate and keep on top of the firm’s inventory.
Tropicana Oil is one of five SME winners in the latest “Pai Po Business Awards” scheme, run by Siam Commercial Bank and Chulalongkorn University’s Sasin Graduate Institute of Business Administration.
The company was awarded for its outstanding performance in terms of Sustainable Business Practice, Innovation Enterprise and Entrepreneurship.
Suradej said that in the new industrial world, with Thailand moving to the Industry 4.0 level, R&D and knowledge were crucial for business success.
SMEs should not wait for cash from the government, while the government should focus on education and training programmes rather than giving money away as the latter would not help SMEs to grow in the long run, he stressed.
The company, meanwhile, is rebranding and repackaging its Tropicana products to better position its cold-pressed coconut oil in the global market.
It also plans to broaden its export markets to Europe and the Middle East, in order to offset price competition from rival producers in Japan, he said.
The company hopes overall sales |will reach Bt1 billion in the near future, while it targets a 50-per-cent rise to Bt450 million this year, from Bt300 million in 2016.
