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Published on September 13, 2007

 Despite having controlled his family's business for decades, Betagro Group CEO Vanus Taepaisitphongse believes he has only recently discovered "the real way" of management and has introduced "traceability" practices in not only the group's manufacturing lines, but also every layer of management.

It is not easy to manage a livestock business with annual sales of Bt30 billion to Bt40 billion, about 20,000 staff and assets worth between Bt15 billion and Bt17 billion.

However, Vanus has implemented two management principles developed in Japan: Total Quality Management (TQM) and Total Productivity Management (TPM). The intention is to increase Betagro's production efficiency and systematise the group's operations. He has drawn up a new operational structure guided by these two principles that will not only ensure better working systems and a clearer business and manufacturing plan, but also allow each part of the group's operations to be followed and checked.

"Both TQM and TPM have led me to focus more on results than on processes. After all, this is the heart of business," he says, adding that the implementation was just beginning but will spread throughout the group's operations.

The Betagro Group's businesses focus on four core areas, including livestock raising and breeding, pig and poultry production, stock feed and animal health. In terms of sales revenue, it is Thailand's second-biggest agribusiness conglomerate.

His awareness of the key principles of TPM came from entering joint ventures with Japanese companies. Now, the more efficient management procedures allow the group quickly to check any mistakes that may affect manufacturing operations. Soon, this traceability will allow checking on and solving problems throughout the group's network of 30 affiliated companies.

"TQM and TPM also help to systemise my thinking, which is good for management," he says.

Vanus took over the top management position in the Betagro Group in 1988, when his father, Chaivat, moved up to become its chairman. He was well prepared for the tough management position, having earned a bachelor's degree in economics and a master's degree in business administration.

Unavoidably, the group faced difficult times during the 1997 financial crisis. Vanus had to find financial support for a Bt500-million plan to improve both the group's productivity and its product quality, knowing it would need a keen competitive edge to prosper.

Before taking Betagro's helm, Vanus had wanted to become a banker and worked as a project study officer for both Citibank and Tisco Finance and Securities (as it was called at the time). As it turned out, the experience helped him prepare business plans to borrow large amounts of capital from banks.

With his new management systems in place, the group's staff is able to sketch out business plans to ensure loans from banks, should they be needed.

"Betagro staff can draw up a business plan to borrow Bt100 million from a bank, thanks to our systemised financial module and more flexible budget strategy," he says.

Vanus volunteered to head up the family business after seeing both his grandfather and father working hard in the rice warehouse that was the basis of the business.

Last Friday, the group celebrated its 40th anniversary, and Vanus says it is about to enjoy sustainable development in terms of its management and operations.

"We are not focused on listing on the Stock Exchange of Thailand to mobilise funds, but the public can still check us out. We want to be an efficient organisation that helps drive the country's economic growth," he says, adding that there was a 50-50 chance the group would consider listing on the bourse sometime in the future.

The group is aiming at 15-per-cent growth in sales this year, to Bt33 billion. Of that figure, export revenue is expected to account for 20-25 per cent.

Vanus says the group's revenue has suffered because of the stronger baht and falling meat prices, resulting in an export loss earlier this year. However, it has revised its business plan to cope with unpredictable exchange fluctuations and as a result is able to report a profit and manage import costs to offset export losses.

The group is now focusing on cost reductions, in order to maintain its competitiveness in both domestic and export markets.

"We want to establish efficient management of business operations, to ensure sustainable development and competitiveness for the whole group. We'll develop and produce safe, high-quality food products from our modern agriculture-based infrastructures for the benefit of the world population," he says.

Part of this efficient management will involve keeping a close watch on each process in the group's business, including feed production, livestock raising and breeding, pork and chicken production and production of animal pharmaceuticals. This will ensure the consistent interrelation of processes throughout the various production chains.

Vanus says if he can set up a good system for the group's operations, he will retire and when he turns 65.

Achara Pongvutitham

 The Nation