Lobo, seasoning powder maker, plans Bt150m expansion
Lobo, the Kingdom's leading brand of seasoning powder, will invest Bt150 million this year to expand its production capacity to serve strong growth in domestic consumption and rapid export growth to neighbouring countries.
Also, the firm will spend about Bt100 million this year focusing on advertising and marketing campaigns to maintain its market leader status in the industry after many new players have entered the market.
Akom Palanuwech, managing director of Globo Foods, said the firm sees more opportunities to boost sales in both domestic and overseas markets this year thanks to a change of consumer behaviour to favour more convenient lifestyles.
"The firm is projected to generate significant growth of 30-40 per cent this year to achieve Bt2 billion sales revenue. This is due to higher domestic consumption as well as strong export growth, in particular to Asean markets, which are familiar with Thai tastes," Akom said.
The company expects that it will be able to increase production capacity by another 25 per cent. Its new plant in Samut Prakan province should be completed this year. Last year, the company invested Bt200 million to expand a plant in Suphan Buri.
He said more competitors were entering the industry. The company needs to increase capacity and focus more on marketing strategy to maintain its leading status.
Last year, the company's sales were valued at Bt1.5 billion. Normally, its sales grow by 15-20 per cent a year, while it spends only Bt40 million for marketing and advertising.
Of the total sales value, about 35 per cent was generated from retail business, and the remainder from supply to chain restaurants.
About 50 per cent of the company's retail income is generated from exports. Major export markets are in the European Union and the United States. However, sales to Asean countries have increased a lot in the past 10 years after economic growth and the benefits from Asean free-trade agreements.
Akom said sales to Asean were expected to grow this year as zero tariffs kick in, while sales to Myanmar would also increase significantly on strong demand for Thai food products.
Asked about whether the financial crunch in the EU and slowing economic growth in the US had affected the company's sales, the firm said the sluggish global economy had actually encouraged higher sales of seasoning powder. This was because of consumers tightening their spending for dining out.
According to the company's sales and marketing department, the value of the seasoning-powder market in Thailand is about Bt4 billion to Bt5 billion. Lobo is the market leader in the segment, having about a 70-per-cent market share. Normally, the industry will grow by 10-15 per cent a year, but this year it is expected to grow by 20 per cent because of more players jumping into the business, including Knorr.
To promote sales domestically, Lobo has introduced a contest for amateur chefs to join the company's activities. The winner will experience a 10-day trip to New York.
The firm has also introduced eight new Lobo 2 in 1 Express products. These are seasoning powders for eight exotic Thai menus with powdered coconut milk.
The company will continue to introduce new products to the market under its strategy to invest about 5 per cent of revenue in research and development.