PFP in talks to set up Vietnamese factory
Group to hold major stake in joint venture
PFP Group, the frozen seafood producer, plans to set up a joint venture factory in Vietnam in the next three to five years to diversify business risks.
Piyakarn Piyapatana, i nternational marketing director, said it was negotiating with several mid-sized seafood processing companies in Vietnam about setting up the joint venture.
The deal is expected to be concluded in the near future with PFP holding a major stake.
PFP will provide the production knowhow while its local partner will handle the raw seafood supply and find a suitable plot for the factory.
“We chose to have a seafood processing plant in Vietnam because its economic growth is higher than many Asean countries, including Thailand. Moreover, Vietnam offers a good source of seafood,” she said.
The country also enjoys trade privileges that will help PFP shipments to the US and Europe in the future.
Initially, the seafood processing factory in Vietnam will produce fish paste or surimi before expanding to other products. The output will serve the Vietnamese market and then be exported to other Asean countries.
Before the factory’s establishment, PFP will re-market its frozen seafood in Vietnam after suspending sales for two years. It will find a new local distributor to distribute its products to modern retail stores nationwide.
Apart from Vietnam, the group will seek more business partners in China to distribute its products in one of Thailand’s top export destinations.
Sales in China this year are expected to increase to US$6 million.
“Demand for our seafood in China increases by at least $1 million every year and the rising sales momentum is expected to continue this year,” Ms Piyakarn said.
PFP plans to enter new markets in the Middle East, including Saudi Arabia, which has the world’s third l argest Muslim population.
Its overseas sales are expected to rise to 1.5-2 billion baht this year, up from 1.3 billion baht last year. Of the total, about 70% or 900 million baht will come from Asia.
On the domestic front, Thawee Piyapatana, the group’s chairman, said it would be spending 300 million baht to install new machines at the factory in Songkhla province to increase the production capacity by 30% to 600 tonnes per month by the end of this year.
The additional capacity will support growth over the next three years. New processed seafood products will be added in the second half of the year to serve the catering business.
By doing so, PFP’s total sales is expected to grow by 15-20% to 6 billion baht this year, including exports to 23 countries.