DAIRY
PRODUCTS
PITSINEE JITPLEECHEEP
Dutch Mill Group, the wholly Thai-owned
dairy firm, is planning to set up a joint-venture dairy
manufacturer in India within the next three years, with an
initial investment of 200 million baht.
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Chairman Teerayuth Chaisawangwong
reassures consumers about the safety of Dutch Mill
products at a press conference yesterday. |
The move is part of the company's mission
to become one of Asia's leading dairy product makers, said
chairman Teerayuth Chaisawangwong. He added that the company
had already opened a representative office in Chennai late
last year to explore India's market of over one billion
people.
So far, three Indian dairy manufacturers
have contacted the company regarding a business partnership.
But the final decision depends on resolving shareholder
stakes. Dutch Mill wants to hold at least 60% in the new
venture.
"We decided to expand the business in
India because of its enormous population, while the
production capacity of raw milk in India is 100,000 tonnes
per year," said Mr Teerayuth.
"However, dairy farming there is
fragmented so there is a huge opportunity for us. If we
could gather raw milk from these fragmented dairy farms, we
could set up our own factory to produce fresh dairy products
and powdered milk."
In the initial stage, the company would
invest US$6 million (about 200 million baht) to set up a
small dairy manufacturer with an annual capacity of 30,000
tonnes. It would then gradually increase the manufacturer's
capacity to 200,000 tonnes.
"The company expects to hire 600 staff
for the new factory and 2,000 sales representatives in
India. The business there will be operated under a direct-sales
system as we have the expertise," said Mr Teerayuth.
As it must compete with world-class dairy
brands in India, Dutch Mill plans to enter provincial areas
before penetrating major cities. The company expects to
reach a break-even point in four years.
In the export market, Dutch Mill
currently ships dairy products to Southeast Asian countries
and Sri Lanka. Exports contribute about 250 million baht, or
about 5%, of total sales of five billion baht. The company
aims to increase exports to 15% of total sales within the
next three years after it enters new markets including the
Maldives and the United Arab Emirates.
"We are not concerned about the global
economic recession as dairy products would be the least
affected as they would be the last items for parents to drop
from their shopping list because they are essential to their
children," said Mr Teerayuth.
Dairy product sales in October fell
15-30%, compared with a normal drop of 8-15% during what is
normally the industry's low season.
Dutch Mill has suggested the government
assign four ministries - Industry, Commerce, Public Health,
and Agriculture - to set a clear standard on melamine
contamination for all dairy product producers. This should
be in line with global standards to avoid creating
difficulties for Thai companies.
Recently, the Dutch Mill brand has been
damaged because the firm's subsidiary, Dairy Plus Co,
imported 100 tonnes of powdered milk from China that was
found to contain melamine, although at a safe level.
