Nongpho to ditch Loxley, go it alone
Nongpho Ratchaburi Dairy Cooperative Ltd will cancel its distribution contract with Loxley Trading after four decades of partnership and set up a dedicated network to distribute dairy products nationwide.
Thanapol Vongvatasit, the company’s chairman, said Nongpho will start marketing and distributing dairy products on its own in June after appointing distributors in each province.
The new strategy is meant to expand dairy business at a faster pace than in the past. The company expects to have 100% product distribution coverage across the country by the end of 2017, encompassing both modern and traditional trade outlets.
Nongpho’s dairy products at present are distributed in just 60% of channels across Thailand.
“We found opportunities to expand Nongpho dairy products, particularly in the North and the Northeast, where our coverage is quite weak when compared with other regions,” Mr Thanapol said.
The company has also extended its dairy product lines to include pasteurised milk.
To celebrate Nongpho’s 45th anniversary this year, 100 million baht will be budgeted for promotional activity during April-September.
Apart from domestic distribution, the company plans to expand into neighbouring countries.
Nongpho is in the process of studying trade laws, consumer behaviour and market potential before exporting its dairy products to China, Vietnam and Malaysia.
Vietnam is an interesting market because of the country’s strong economic growth, Mr Thanapol said, though competition is fierce as well.
The company is talking with Thai traders about distributing dairy products in the Chinese market. The expansion in Asean and China is expected to conclude by the end of this year.
Nongpho already exports dairy products to Myanmar, Laos and Cambodia, but sales are still low.
At present, the Nongpho factory in Ratchaburi province has a production capacity of 300 tonnes of dairy products a day. But it uses just 200 tonnes of capacity.
The company buys raw milk from 5,000 farmers in the factory’s nearby area.
The expansion of Nongpho dairy products into neighbouring countries will make use of the extra production capacity to boost future sales growth.
With the plans, the company expects sales to grow by 30% to 3.9 billion baht by the end of this year.
Last year, sales of Nongpho grew by 10% to 3 billion baht.
Of the 2016 total, some 2.8 billion baht came from the domestic market and 200 million baht from other Asean markets.