Sauce-maker to raise prices in second half
Thai Preeda Industry Co Ltd, a producer and distributor of cooking sauces, has announced it will increase the price of items it manufactures for other brands by 5 per cent to 10 per cent in the second half of the year, due mainly to the rising price of oil.
The company's president, Prapakorn Veerapong, said the increases were to offset transportation costs, which have risen by as much as 10 per cent. However, they will be implemented only after outstanding original equipment manufacturing (OEM) contracts expire in the second half. The company makes fish sauce, oyster sauce, stir-fry sauce, spicy stir-fry sauce and hot basil stir-fry sauce for brands other than its own. Of the company's sales of Bt120 million last year, 60 per cent came from OEM goods and the rest from its own Rajah brand sauces. Prapakorn said the company planned to increase the number of products under its Rajah brand so that they generate 60 per cent of the company's sales within a year. Several new products will be launched, with the aim of reaching Bt150 million in sales this year and Bt200 million in 2007. The first new product is Hong Kong oyster sauce, with a flavour originating in Hong Kong cuisine. It will target customers with a liking for Chinese food. Later this year, Thai Preeda will launch a new chilli sauce and a dipping sauce for chicken. To achieve its sales target, the company is planning to spend Bt30 million on marketing before the end of the year, with a focus on brand-building. It is the first time the company has promoted its products, Prapakorn said. "We have to promote our brand in order to generate a higher margin than concentrating only on OEM manufacturing," he said. Manufacturing products under its own brand generates a margin between 25 per cent and 30 per cent, compared with only 10 per cent to 15 per cent for OEM production. To boost its sales around the country, Thai Preeda is also negotiating with a distributor and a deal is expected within two months. Currently, the company distributes its products through as many as 100 sales agents. After spending Bt160 million to expand its production capacity as recently as 2002, Thai Preeda is able to produce nine million litres of sauce per year. Prapakorn said the company would also expand its export markets this year, by 10 per cent to 20 per cent. It will achieve this by joining international exhibitions with the Commerce Ministry's Export Promotion Department. Thai Preeda's major export markets include the Middle East, the United States, Europe and Asia. Established in 1947 in Chon Buri province, the company - run by the Veerapong family - has registered capital of Bt68 million. Somluck Srimalee, The Nation
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