Ocha Food Pack looks to production of value-added frozen, dried foods

Nongnuch Athiphunamphai, factory manager of Ocha Food Pack, said the company’s research-and-development team was currently developing value-added frozen products, while working with outside R&D establishments to develop healthy products to serve Asian consumers in developed countries, which are the company’s main market.
Ocha Food Pack, founded in 2007 as the ninth company in the Wuttichai Group – a major wood and steel trading company – produces and supplies frozen and dried foods to an affiliated trading company, Global Food Trading, for shipment overseas.
Ocha Food Pack’s main frozen products are vegetables, fruit and banana leaves, while its major dried foods are canned vegetables and fruit, and food ingredients.
Its product range is exported to developed countries with sizeable Asian populations.
Nongnuch, a third-generation member of the family, began working at the company in 2013 after graduating with a doctorate from Cornell University in the United States.
She believes cost management is a key element for a non-value-added product manufacturer like her family’s company, because most of the products are in a state of stable demand and it is hard to increase sales revenue or raise prices.
She realised just how crucial cost management was for Ocha Food Pack when the company’s overtime payments from the production of frozen banana leaves climbed to Bt1.3 million.
“We just thought about the output and how to produce frozen banana leaves to meet demand. The process of freezing and packing banana leaves is simple, so we decided to open it up to overtime. But the profit margin from selling frozen banana leaves fell because of the large overtime payments we had to make,” she explained.
The company had thought about ending this particular product line until Nongnuch took a “lean supply chain” course offered by TMB Bank, which helped her identify where there were supply-chain problems – in this case, the large overtime payments caused by the time it took to produce frozen banana leaves.
As a result, the time taken to make one pack of frozen leaves was cut from 193 seconds to 91 seconds, and the company was able to reduce the overtime cost accordingly, she said.
This has freed up employees to make other products and the company now has sufficient capital to start developing value-added products, which is the goal of third-generation management in taking Ocha Food Pack beyond being merely a non-value-added manufacturer, she added.
“Over the next three years, we will introduce value-added products, which will help the company to grow more rapidly. At present, Ocha Food Pack has a sales-growth target of 10 per cent per annum, but we intend our value-added products to contribute half of our sales revenue within the next three years,” said the factory manager.
“The changing market and the rising trend of health-conscious consumers enhance our adjustment. We also see more demand for Thai cuisine in developed countries, where there is growing interest in more varied menus and managed inventories,” she said.
However, Ocha Food Pack has no plans to supply its products to Asean markets because Thai foods in the company’s line of business are not sufficiently different from what is available elsewhere in the region, she added. “The Asean Economic Community forces us to escape the competition by upgrading to value-added products and, once our [value-added] products sell strongly in developed countries, we will consider producing the same products for sale in Thailand,” Nongnuch said.
The domestic market can help diversify risk from overseas market volatility, including foreign exchange, said the factory manager.