Mama producer eyes plant in Hungary to firm up foothold in Europe
THAI PRESIDENT FOODS, the producer of Mama instant noodles, might invest more than Bt300 million to acquire a plant in Hungary as its first production foothold in the European market. "Because of the economic slowdown in Europe, we will be able to purch
“However, the most important issue is whether we will be able to export instant noodles from our plant in Hungary to other markets in Europe, including England, Germany, France, the Netherlands, the Czech Republic and Eastern Europe. We have already exported instant noodles to those European markets from Thailand, but faced many difficulties, including |high transport and freight costs, high import duties and currency fluctuation,” he said.
Thai President Foods (Hungary) was set up in May with 2.35 billion Hungarian forints (Bt305.5 million) in registered capital. The company is negotiating with an Asian investor that owns an instant-noodle plant in Hungary on a possible acquisition.
The talks will be completed by year-end and if successful, the company will take over the plant immediately.
There is a tremendous opportunity to expand its instant-noodle market in Europe, where consumption is still low compared with Thailand. Thais gobble up 42 packs a year on average. The company distributes its instant noodles in many markets in Europe via leading retail chains, including Tesco in Britain.
Mama is sold in many countries in Europe and enjoys high annual growth of 10-20 per cent. Germany and England show the highest growth rate.
“For the progress of our investment in setting up our second instant-noodle plant in Myanmar, we still have not concluded the purchase of a site because land prices in Mandalay are shooting up and the location has not been settled yet,” Suchai said.
“We established our first plant in Myanmar about 10 years ago, with current capacity at about 30,000 cases per year. Our plant in Cambodia is also growing well with annual increases of 10 per cent in sales.”
The company has changed its distributor in Vietnam, ThaiCorp International Vietnam, a subsidiary of Berli Jucker Group. Such a large distributor might not be able to handle its products in depth. Vietnam is also a market with intense competition.
Mama instant noodles are shipped to more than 50 countries around the world, including in North America, Africa, South Africa, Europe, Australia and Asia. Overseas sales contribute about 15 per cent of the total.
The company runs instant-noodle plants in many countries, such as Myanmar and Cambodia. It recently formed a joint venture with a local investor in Bangladesh to set up a manufacturing company called Kallol Thai President Foods with Bt220 million in registered capital. The plant churns out about 20 million packs per year.
The company also has a Bt248-million instant-noodle plant in Bhutan. Both the Bangladesh and Bhutan factories are responsible for supplying Mama instant noodles to India, which has a huge population of more than a billion.
