An unquenchable thirst for wealth
Teerin Tanyawattanakul turned around his company’s rice business by introducing computers and accounting systems. By Jesus Alcocer
The prodigal son was once nearly dragged to university in the US by his parents. Teerin Tanyawattanakul now presides over Kai jae’ s( Soon thorn tan ya sap Co) 2-billion-baht-plus empire that encompasses rice, property and snacks. Mr Teerin’s stint at Cal State Fullerton was largely unremarkable. Lots of late nights in dingy fraternity house basements and questionable alcoholic concoctions.
“My classmates in college would be surprised with my success. But in fact, I think there is a very tenuous correlation between good grades and financial success later in life. I’ve used less than 10% of what I was taught, and I got a master’s degree only because I felt obliged to my family,” he said.
By the time Mr Teerin was in college, his family had sold around 20 million baht in rice, which was mostly distributed to local stores in Chon Buri in a run-down pickup. He had never been interested in the business, and with very few exceptions, he never worked a day in his life before graduation.
As someone who had spent his teens in an extended idyllic childhood, Mr Teerin’s first attempt at self-support was a cruel experiment in contrast. The future rice mogul started earning US$10 (324 baht) per hour as a salesman and had to supplement his income as a dishwasher.
He was a sharp marketer, a skill he naturally developed early on when he used his New Year’s money to buy and “flip” toys as a child.
“I was always selling something,” he said. He was also hungry. “Growing up I didn’t know what I wanted to do, but I knew I wanted money. I just wanted to be rich, not in terms of a number, but in terms of thinking nothing was expensive.”
Unlike many entrepreneurs and money-hungry executives, Mr Teerin was never poor. His dad quit his job at Krungthai Bank when Mr Teerin was seven to start a small rice business, following in the family’s farming tradition. While food was always plenty, he says money and success have never been enough.
“Even now, I may no longer care about money, but I care about growing the business, creating more success for myself.”
While Mr Teerin was an adept salesman, his first full-time experience was nothing short of a disaster. “I was making so little I had no energy to work. My manager hated me because I showed no commitment, but I wanted to put in 10 to get 100, not 100 to get 10.”
The ordeal lasted six months, until he called his mum asking to return to Thailand to work in the family business.
“Naturally, they were sceptical. They thought I just wanted to fool around and use the family’s money.”
The first few months did not go very well, accentuated by Mr Teerin’s frequent clashes with his father, a “very traditional Chinese businessman,” who did everything by hand, and had a hard time delegating tasks. His fiery nature did not help.
“I have never been afraid of fighting. When I hired the first salesman my father walked out of the room and slammed the door. His felt that if we could do it ourselves why waste our money hiring other people.”
The tension with his father initially got him relegated to the lower rungs of the business.
“I was driving the truck with other staff. My father was constantly asked why he let his son do that kind of work, but in retrospect it was the right start.”
Working alongside his dad’s workers, most of whom had been recruited from surrounding neighbourhoods, allowed him to build a loyal following in the company and focus on customers.
Kaijae’s revenue had been stagnant for decades, a fact Mr Teerin says he was always puzzled by.
“I realised we never talked to the customers. We had been selling 10 bags of rice to each restaurant for 20 years, but we never asked if they could do with 20 bags,” he said.
He eventually gained the trust of his father through results, and in four years he took the top job at Kaijae. “He still gets mad at me sometimes, but he won’t stop me from doing what I’ve decided on.”
The first year under Mr Teerin’s guidance Kaijae grew 200%.
In the following decade, the company’s rice sales shot from 20 million to 2 billion baht.
Part of the growth can be attributed to the introduction of basic business tools, including computers and accounting systems.
Listening to the customer was also key, he said. “We introduced dozens of rice varieties in order to adapt to the whole Thai market, and move away from low-margin grains like white rice,” said Mr Teerin.
The company also took a stab at the elusive modern trade market.
Rice is still an overwhelmingly traditional business, with about 80% of rice in the country moved in trucks and sold by the kilogramme in unmarked plastic bags at corner stores and wet markets. Modern trade is a relatively small part of Kaijae’s revenue, but it is the fastest growing segment as it is the first place where consumers interested in premium branded rice look for it.
Mr Teerin said Kaijae turned rice from a commodity into a differentiated product.
The company controls less than 10% of the gargantuan Thai rice market. Increasing its market share will require introducing varieties at every price point, as well as many flavours.
In recent years, Mr Teerin has looked into other businesses to supplement rice. Two years ago he added Thai traditional snacks to the mix, 60% of which are sold abroad and the rest sold domestically through 7-Eleven and other convenience stores. Together, snacks and the company’s thriving real estate business provide about 200 million baht in revenue annually.
The company focuses on secondary provinces where Kaijae is often the only major player in town. In Phrae province, for example, its hotel runs an occupancy rate of 50%, but the company attracts most major businesses and government events held in the vicinity.
The graduate who once struggled to find a job because of his low grades can now purchase most things that meet his gaze, including the head-totoe Gucci outfits he sports. His thirst for wealth still rages as violently as when he knocked on doors under the scorching sun for a living.
“I don’t know what is next. If I see an opportunity I want it. I won’t stop with rice,” he said.
‘‘ I don’t know what is next. If I see an opportunity I want it. I won’t stop with rice. TEERIN TANYAWATTANAKUL President, Soon thorn tan ya sap Co