Dairy giant KCG expects expansion plans to help continue double-digit growth
Thailand's largest dairy producer and distributor, KCG Corporation, aims to become a regional player as a provider of premium western cuisine ingredients and partner solutions, the company’s newly appointed CEO, Damrongchai Vipawatanakul, said.
The goal followed its new business directions and strategies, including improving its production lines, expanding manufacturing, developing its logistics networks and warehouse, and incorporating new technologies into its operations and services.
At a press conference on Friday, he said he expected the new strategies to keep the company growing by double digits for the next 3-5 years, continuing the previous three years of consecutive double digit growth.
KCG broke its revenue record in 2023, reaching an all-time high of 7.157 billion baht, a 16.2% increase year on year. Net profit reached 305.9 million baht, a 26.9% increase.
He said the group would upgrade and expand its production capacity, which is already operating at full capacity 24 hours a day.
"Initially, we started expanding and improving our cheese production lines. The process was completed in October last year. It helped double the volume of individually wrapped processed cheese slices from 2,106 to 4,212 tonnes per year. We are currently upgrading the butter production lines, which will be completed next year," he said.
Following the upgrade, KCG expects to increase butter production from 18,000 tonnes to 23,000 tonnes per year.
He said new growth would come from expanding into new export markets around the world, particularly in Asia, such as Japan, while investing in research and development to explore new potential products.
Currently, the company exports to 17 countries, most of which are in Southeast Asia, with the exception of Singapore.
Thawach Dhiranusornkit, the group's deputy managing director, stated that KCG's R&D approach from 2024 to 2029 would focus on developing food innovation and services for five major global diet trends: health beliefs, naturally functional foods, weight wellness, snackification, and sustainability.
"We will improve both our dairy and non-dairy products while developing new ones to meet the trends," he said, adding that the company also collaborated with universities, researchers, and academics to find the right products and solutions that would meet the demands of its customers.
As Thailand's "first and only dairy manufacturer that offered one-stop cold-chain delivery services to its business partners and consumers", Danai Galassi, KCG’s deputy managing director, said the company was working to improve its logistics network and operations.
The move includes integrating information technology and artificial intelligence to improve data management, which will lead to better operation of its logistics networks.
Meanwhile, he stated that KCG was upgrading its warehouses. Rather than stocking finished goods in different locations, the company has set up KCG Logistics Park, which is located in the same area as the factory.
He explained that the park comprised six warehouses that stocked all three types of KCG products: dairy, food and bakery ingredients, and biscuits.
Each warehouse would be outfitted with a vendor-managed inventory system to help control inventory volume and deliver products on time for customers' needs, he said.
The project is expected to be completed by the second quarter of this year, saving the company approximately 15-20% in logistics costs. In addition, KCG intends to increase the number of electric vehicles in its logistics system to 30% as part of the company's commitment to meeting sustainable development goals.
