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Published on April 9, 2008

This summer's Beijing Olympics is expected to attract huge numbers of hungry tourists, prompting Charoen Pokphand Foods (CPF) to raise its sales target in Hong Kong to nearly Bt1 billion this year.

Its subsidiary Charoen Pokphand Merchandising was originally expected to increase sales to Bt680 million from Bt360 million last year.

The upgrade came on anticipated rising demand for food in both Hong Kong and Macau, through which many overseas visitors will have to transit before or after attending Olympic events held in mainland Chinese cities.

Pong Visedpaitoon, chief operating officer of CPF, said that although Hong Kong has a population of about 7 million and Macau nearly 4 million, tourism brings in 32 million people.

Hong Kong is an oasis for food and fashion while Macau draws more than a million gamblers - and they are big consumers.

"They are also high-purchasing markets with high economic growth. Tax receipts from casinos in Macau are 40 per cent higher than what Las Vegas collects," Pong said.

The company sees the potential to treble last year's sales.

Since the CP brand was introduced in Hong Kong in 2006, it has won over consumers with its eggs, wonton, chilled foods and other products. Product champions are shrimp wonton with sales of Bt110 million last year and eggs with sales of Bt100 million.

CP Merchandising plans to double its share of the Bt1-billion egg market in Hong Kong to 20 per cent this year. It also aims to approach more food services and caterers, said general manager Sutha Dansermsuk.

CP wants its eggs to capture the high-end market in Hong Kong with a price of 20 Hong Kong dollars (Bt82) per dozen. Eggs imported from the US cost HK$23 and from China HK$12. However, the US has had to bring down its price to HK$20 and China has also dropped its price to HK$11 to maintain their competitiveness.

Thai eggs are fresher than those coming from America as shipping from Thailand takes less time, and they do not have a safety image problem like Chinese goods.

"We try to enter our customers' minds and stand on our strengths. Our products have been manufactured with 100-per-cent traceability from feed mill, hatchery and processing lines to distribution channels," Sutha said.

CPF has worked closely with three distributors to boost market share. For example, Sim's Trading focuses on frozen products and Dah Chong Hong concentrates on wholesaling.

CP products such as shrimp wonton and frozen ready-to-eat meals started accessing traditional trade and convenience stores in Macau last year. Of the total of 38 branches of traditional trade shops, the company has connected up with 28.

Exports to Hong Kong are expanding faster than those to Singapore, even though the company started promoting products in the city-state in 2004.

CP's exports to Hong Kong have hit the 27 SKU (stock-keeping unit) level.

The plan is to increase that by more than seven to 10 SKUs this year, but the company hopes to do better and reach a volume of 47 SKUs.

Achara Pongvutitham

The Nation

Hong Kong