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Home > Food and Beverage > Beverage > Soft Drinks
Thailand Food and Drink Report Q3 2009
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The Thai economy will be significantly affected by the global economic slowdown, with demand for Thaiexports all but seizing up and the tourism sector taking a particularly hard blow. In light of this BMI hasrevised down its economic growth forecast for Thailand in 2009 from 1% to -2.5%. This slowdown - andits impact on consumer confidence - is in turn likely to have a knock on effect on the country’s food,drink and mass grocery retail sectors.
However, despite the gloomy outlook, Q309 has seen Thailand on the receiving end of internationalinvestment from both Japan and China. Japanese seasonings giant Ajinomoto and compatriot processedmeat producer Itoham Foods unveiled plans this quarter for a new joint venture company in Thailand inorder to market processed meat products in the country. Meanwhile, leading Chinese brewer Tsingtaoannounced plans to invest THB2bn (US$56.4mn) in a Thai brewery.
Moving to the food-processing sector some companies are remaining optimistic despite the prevailingeconomic conditions. Examples of such companies include Thai Union Frozen Products (TUF) who inMarch announced ambitious targets for FY09 expecting both revenue and net profit to climb by 10-12%,and Thailand-based leading chicken exporter Charoen Pokphand Foods (CP Foods) who in the samemonth announced that it also expected its 2009 sales to increase following strong results for FY08 -revenue increased 16% y-o-y and net profit was up 145% y-o-y. However, Thai President Foods doesnot share their confidence and announced in Q2 that it had revised its sales growth target for FY09 downfrom 9% to 5%. Elsewhere, in the drinks sector, Oishi Group is feeling cautious announcing that it isconsidering scrapping plans for its new THB1.4bn (US$39.7mn) production facility. The main driver forthis decision being concern over the impact that a proposed beverage tax increase would have on salesamid the economic downturn.
Turning to the mass grocery retail sector, Q2 saw Thailand-based convenience retailer Sun 108 announceits intention to open a further 200 stores in 2009. With convenience store sales forecast to increase by14.9% in the year, this move is not surprising. Leading retailers Tesco Lotus and CP All re-iterated againthis quarter their intentions to proceed with expansion plans despite the dismal economic conditions.Activity this quarter underlines the fact that Thailand is still an attractive investment opportunity despitethe current economic situation.
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