A few Thai brands have become well recognised in foreign countries, among them the energy drink Red Bull, Singha and Chang beers. Unfortunately, Thai rice brands have a much lower profile, even though the country has been the world's biggest rice exporter for many decades.
Most Thai rice exports are shipped in bulk, or in large sacks of 100 to 500 kilogrammes. They are then repackaged for retail sale under the buyers' brands to gain higher value. The practice leaves Thai exporters with no recognition and low on the value chain, since they are perceived as just another bunch of raw-material suppliers.
A few companies, including Chia Meng, one of the country's oldest rice exporting groups, are determined to change all that. Chia Meng has decided to export in smaller packages of one to 10 pounds and bearing its own Golden Phoenix brand, known in Thailand as Hong Thong.
''We're negotiating with buyers for the possibility to sell rice labelled only as our flagship brand, Golden Phoenix ... to strengthen the trademark in both domestic and foreign markets,''said Vallop Manathanya, the president of the Chia Meng group.
Chia Meng ships about 400,000 tonnes of rice a year, mostly fragrant rice, to 50 countries, with 60% under the Golden Phoenix brand and the rest under the labels of its buyers. Its brand is already fairly well known in key markets such as Hong Kong and Singapore.
Rebuilding the brand would transform the company from just a common trader, and Mr Vallop encourages other rice exporters to follow suit in order to raise the prestige of Thai rice, Hom Mali jasmine fragrant rice in particular.
This way, he says, consumers will be assured of product quality while exporters could gain more revenue.
''It is strange how our country, which has more than 200 exporters of more than eight million tonnes of rice a year _ the highest in the world rice trade, does not have popular brands like America has Uncle Ben's,'' said Mr Vallop. To build its brand, Chia Meng would start reducing its OEM (original equipment manufacturer) activity, and set up its own distribution centres overseas. The first two centres, in Dubai and the Philippines, would not only ensure quality of the grain but also broaden the product line to cover other offerings such as parboiled rice, instead of merely fragrant rice, the core product of the 70-year-old exporter.
Dubai would be a springboard to countries in the Middle East, while demand is rising for expensive fragrant rice in the Philippines, where white rice has largely dominated the market, he said.
Chia Meng has invested about 100 million baht in the centres and is considering a third branch in Shenzhen, China.
Brand building would run simultaneously with its new strategy _ to improve the standards of all partners involved in its rice business. This includes farmers, distributors and consumers, so they are all more like company stakeholders.
Under the strategy, the company would communicate more closely with distributors and consumers in a bid to supply rice that fits market demand. The product line could include healthier rice and formulations suited to people with health conditions such as diabetes. Farmers would be given a clearer idea of the market situation and would receive assistance, either financial supports or know-how for growing specialty rice.
''They will not only be paddy sellers but our trade partners whom we have to take care of. They deserve to have drinks and seats while doing business with us,'' said Mr Vallop, adding that the idea would change the general attitude that millers and others show toward the people who grow the crop.
The first step would be taken next year under a pilot project involving Chia Meng and the Agricultural Land Reform Office. They plan to develop a 200,000-rai plantation area in Thung Kula Ronghai, the world's largest jasmine-rice farming area, in northeastern Thailand. The three-year programme would have 20,000 farm households growing rice under the Good Agricultural Practice (GAP) programme with no chemical substances. Paddies would be bought at market prices and not based on the state-determined pledging prices that have long distorted the market mechanism.
''The state rice price intervention programme has added to exporters' expenses and lessened the competitiveness of Thai rice in the world market, to the point where Thai rice is now US$30 a tonne higher than Vietnamese rice,'' Mr Vallop said.
''Considering there are 200 exporters, the government should let the market run freely, otherwise Thai rice will face more stiff competition in the next few years.''
The high pledging prices, together with rising fuel prices that have led to costly transport, are expected to slow the growth of Chia Meng in 2008, from an estimated 10% expansion to eight billion baht in revenue this year.
No comments:
Post a Comment