Thai President Foods buys back entire stake in joint venture
Pipat Paniangvait, more comfortable with Japanese than Western philosophy.
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Thai President Foods Plc, the largest local instant noodle manufacturer and the owner of the Mama brand, yesterday announced a buy-back of its entire stake in its joint venture company with Myojo Foods Co Ltd of Japan, ending the 20-year presence of Myojo Japanese style instant noodles in Thailand.
Pipat Paniangvait, director and president of Thai President Foods, said that the company would spend more than Bt400 million to buy back the 100-per-cent stake in TM Foods Co Ltd, a joint venture producing Japanese style noodles. Thai President Foods already owns a 49-per-cent stake in TM Foods Co Ltd. "We have bought a 30-per-cent stake from Myojo Foods Co Ltd, our Japanese partner. We also want to buy back the remaining shares from other local shareholders," said Pipat. He said the buy-back of 100 per cent in TM Foods Co Ltd would be completed this year. Pipat said that the buy-back of the 30-per-cent stake from Myujo followed different business philosophies that emerged after the Japanese partner was taken over by a Western firm, Steel Partner, a venture capital company, a year ago. "We can cope very well with Japanese philosophy, which focuses on long-term relationships. This is different from the philosophy of the West, which is profit oriented. We are not comfortable with that," said Pipat. He added that the group would transform TM Foods Co Ltd, which has a noodle factory in Rayong, to become a production arm of Mama instant noodles. He said the buy-back of TM Foods' high-end factory would support the group's existing facilities at Sriracha, Lamphun and Nong Kham in Bangkok, which are now working at nearly 90 per cent capacity on a two-shift basis. Pipat said that adding TM Foods' Rayong factory to the Mama umbrella would help increase Mama's production capacity from five million packs a day to more than six million. "We would like to produce high value-added instant noodle products under Mama sub-brands at the TM Foods' factory in Rayong. The premium noodle products will be available at prices ranging from Bt10 to Bt25 each," said Pipat. He added that Myojo instant noodle products would be completely withdrawn from local retail shelves within two months. Myojo currently has about a 3 per cent share in Thailand's over Bt10-billion instant noodle market. Thai President Foods Plc achieved first-quarter revenues this year of Bt1.2 billion, up from Bt1.1 billion in the first quarter last year. The first-quarter profit this year was recorded at Bt185 million, up from Bt151 million last year. The group expected total revenues this year to reach Bt5.3 billion, up from Bt4.9 billion last year. The group also expected to achieve a profit of over Bt400 million this year. "Mama itself has nearly reached the mature stage. Currently, about 35 Mama packs are bought by each consumer a year. In a mature market, about 40 packs of instant noodles are bought by individuals per annum," said Pipat. "What we can do is expand our product portfolio into different and more value-added goods to increase the unit price of our products," he said.
Kwanchai Rungfapaisarn The Nation
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