Two leading frozen food companies -- Pacific Fish Processing and Lucky Union Foods -- have adjusted their business strategies to prepare for the impact of the escalating US-China trade row.
Thawee Piyapatana, president of Pacific Fish Processing, the producer of PFP seafood products, said as trade squabbles between the US and China are unlikely to finish anytime soon, the company has prepared various measures to cope with the impact.
The company sells about 10% of its raw materials to China, who produce finished goods to send to the US.
"Preventive measures include reducing the company's operation cost and focus on the existing export market," he said. "We also changed the company's logo to become more modern and the slogan to 'healthy tasty' to focus on healthy food in response to consumers' growing health consciousness."
Piyakarn Piyapatana, the company's general manager, said it will officially launch three new brands -- PFP Gold, V.Grand, and Oh!Umi -- at ThaiFex-World Food Asia 2019, a food and beverage trade event.
PFP Gold is a premium frozen Thai fish cake brand, which is a mix of fish paste, Thai herbs and fish tofu. V.Grand comprises ready-to-eat meals for vegetarians, exported to the US and Europe, while Oh!Umi is a seafood and vegetable snack, selling online in Thailand and via a retail channel overseas.
"This is the first time PFP is expanding into snacks because the market is very big," Ms Piyakarn said. "The move should increase our opportunity to tap into other markets, reducing the risk from dependence on Asia."
The company expects the three new brands to contribute about 140 million baht in the first year of operation.
In addition, PFP wants to become a trader, buying products from small and medium-size enterprises (SMEs) to sell via its overseas network.
"We are teaming up with SMEs to co-produce under their brands or our own for the export market," Ms Piyakarn said.
PFP aims for sales worth 3.5 billion baht this year and 5 billion in three years from 3.2 billion in 2018.
Suradech Chinsakuljaroen, marketing director of Lucky Union Foods, the producer of Kani Family and Lucky frozen seafood, said to curb the impact of the trade row, it will emphasise expanding business in the domestic market. The company is seeking business partners in packaging to co-develop its prepared meals for the Thai market.
"The negotiation is about 80% finished and we may take up a joint venture and co-produce new products for the market. This is the first time we are diversifying, turning to ready-to-eat meals in Thailand to balance our business risk," Mr Suradech said. The company is also expanding via e-commerce for business-to-business and business-to-consumer customers.
The ready-to-eat meal market is very attractive because it fits the needs of young people, he said. The Thai market for such meals is worth about 5 billion baht and there are fewer players than in the prepared seafood snack segment, said Mr Suradech.
The company is spending 150 million baht to install new machines to produce crab sticks at its factory in Samut Sakhon, raising capacity to 39,000 tonnes per year from 30,000 tonnes.
