Pres­i­dent Bak­ery de­lays fac­tory open­ing

Com­pany cites slow sales but is up­beat


SET-listed Pres­i­dent Bak­ery Plc, which pro­duces and dis­trib­utes bak­ery prod­ucts un­der the Farm­house brand, has de­layed open­ing a new fac­tory in Bangkok due to the slug­gish state of the mar­ket but still ex­pects to see sales grow around 5% this year, it said this week.

The new bread and bak­ery fac­tory in Bang Chan In­dus­trial Es­tate will now start op­er­at­ing next year, said Apisate Tham­manomai, the com­pany’s di­rec­tor and IT man­ager.

“Sales of our bak­ery prod­ucts in the first five months of this year are weaker than ex­pected. Growth in the bak­ery busi­ness has slowed sig­nif­i­cantly since our com­pany was es­tab­lished over three decades ago,” he said.

Pres­i­dent Bak­ery be­gan build­ing its new fac­tory on a four to five rai plot of land two years ago. The costly ad­di­tion was ini­tially set to be­gin op­er­at­ing in the third or fourth quar­ter of this year.

The com­pany owns two fac­to­ries that pro­duce sliced bread, cakes, pies, burger buns and hot dog rolls in the Bangkok districts of Lat Kra­bang and Min Buri. The new fac­tory, ad­ja­cent to the cur­rent Min Buri lo­ca­tion, will boost pro­duc­tion ca­pac­ity by 20%, it said.

To fight weak pur­chas­ing power, the com­pany has be­gun fo­cus­ing on sell­ing bread whole­sale.

The strat­egy is ex­pected to help bat­tle stiff mar­ket com­pe­ti­tion from both Thai and in­ter­na­tional brands.

“We have put in more ef­fort to tai­lor­make bread and bak­ery items that match the spend­ing power of our con­sumers,” Mr Apisate.

The com­pany said it will also re­struc­ture and pos­si­bly scale down its mar­ket­ing ac­tiv­i­ties.

New prod­ucts to be launched in the sec­ond half of this year will fo­cus on widen­ing the com­pany’s cus­tomer base, it said.

It pre­vi­ously ex­panded its prod­uct line to in­clude health­ier op­tions such as Farm­house’s “Royal Bread” and “Royal Whole­wheat Bread”.

Mr Apisate said the com­pany is op­ti­mistic about its fu­ture busi­ness in Thai­land due to the in­creas­ingly ur­banised na­ture of so­ci­ety.

Thai­land’s bread and bak­ery mar­ket is es­ti­mated to gen­er­ate 20 bil­lion baht in rev­enue each year but an­a­lysts say there is still room for growth due to the low con­sump­tion of bak­ery prod­ucts.

One study con­ducted by Pres­i­dent Bak­ery showed that Thai con­sumers buy two to three kilo­grammes of baked prod­ucts per year on av­er­age. In con­trast, the av­er­age con­sumer in Ja­pan buys 10-15kg of bread each year, or 80-90kg in Ja­pan, its stud­ies showed.

Farm­house prod­ucts are cur­rently sold via whole­sale chan­nels, where they con­trol about 40% of this chan­nel’s mar­ket. The com­pany said it will tar­get other trade chan­nels this year.

Pres­i­dent Bak­ery said to­tal sales last year stood at 7.64 bil­lion baht with a net profit of 1.46 bil­lion baht. In the first quar­ter of 2017 sales hit 1.75 bil­lion baht with a net profit of 318 mil­lion baht.

The com­pany is putting more ef­fort to make bread and bak­ery items that match the spend­ing power of its con­sumers, says Mr Apisate.

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