Sun Group, a local integrated chicken producer, is in negotiations with four potential clients in the United Kingdom and expects to conclude deals with two of them by mid-January.

The exports are expected to begin as soon as the deals are concluded, Sun Group president Somkiert Tangjaiaworn said last week.

It will be the group's first exports to Europe after a lull of three years due to the bird-flu outbreak in Thailand. However, this time it will export cooked products for other brands instead of raw chicken.

Somkiert said it was not certain when Sun Group would export products under its own brand because it would take time to study the export markets and build brand awareness. It has a long-term plan to build up its brand among expatriate Thais via Thai restaurants in target countries before gradually spreading the awareness to the local people.

He said the group knew nothing about consumer behaviour abroad because it previously exported only fresh chicken for manufacturers there to turn into finished products.

In the very long term, Sun Group also hopes to have co-investment with a business partner that not only utilises its production facilities but also lets it play a part in developing the products.

In preparation for resuming exports, the group has invested Bt200 million in a new plant near Sun Food's slaughterhouse in Saraburi province that is expected to break even within four years. The plant was approved by public authorities last August and is currently testing its machinery. It is expected to start production at about the same time the group expects to conclude the UK deals.

Taweesak Jiwawattanawanit, export sales manager of Sun Food International Co, which will undertake the exports, said the negotiations were nearly completed but could not say what the volume of the first order was expected to be. Sun Food International is one of the seven companies of Sun Group.

The group has been approaching both old clients to whom it exported until the European Union (EU) prohibited all fresh chicken import from Thailand due to the bird-flu outbreak, as well as potential new customers.

Regarding to baht's current strength, Somkiert said it could certainly influence international clients to possibly switch their supply from Thailand to Brazil (for clients in the EU) or China (for clients in Japan). The group's approach to counter this is to manufacture what it competitors cannot in order to keep clients' loyalty in all situations.

However, exports are expected to contribute only 10 per cent of expected sales next year, with the rest coming from domestic sales.

Somkiert said Sun Group would not rely on exports as before and was confident that domestic market for both fresh and finished chicken products had a lot of room for growth.

Before the bird-flu outbreak, the group relied solely on exports. At that time Thailand was very strong in exports, he recalled. From just 100,000 tonnes in 1996, the volume of Thai chicken exports had increased to 500,000 tonnes by 2003.

Current per capita consumption of chicken in Thailand is only 13 kilograms, with the market worth approximately Bt30 billion per year, while consumption per capita in the US is as much as 40 kilograms.

Moreover, the global trend is that chicken consumption is increasing at the cost of other meats because it is a relatively cheap source of protein and adjusting both taste and colour are relatively easy. Also, chicken can be eaten by people of all religions, unlike pork or beef.

Sun Group is currently the seventh largest chicken producer in Thailand, according to Somkiert.

Nitida Asawanipont

The Nation