DPO has eyes on Malaysian milk market
The state-run Dairy Farming Promotion Organisation (DPO), the producer and marketer of Thai-Danish dairy products, will explore export markets in Muslim countries, starting with Malaysia.
DPO director-general Narongrit Wongsuwan said the Malaysian government will send a team to audit the halal standards of the Thai-Danish dairy factory in Sukhothai province as a preliminary measure.
If the factory’s standards meet the Malaysian government’s requirements, the DPO will start exporting UHT dairy products, a Thai-Danish brand, to Malaysia by the end of the year.
“If we can enter Malaysia’s dairy market, it will be a springboard for Thai-Danish dairy products to expand into other Muslim countries, including Indonesia and Brunei,” said Mr Narongrit.
The Asean market holds much potential, with DPO confident its products will make a splash, citing Thailand’s robust dairy farming industry.
The Thai-Danish brand is one of very few that uses 100% raw milk for its products, Mr Narongrit said.
Thailand can produce 3,100-3,300 tonnes of raw milk a day, supplied from 16,000 farmers. Of the total, 700 tonnes is used by DPO, which pays 19 baht a kilogramme for raw milk to 4,000 of its contracted farmers.
DPO began exporting dairy products a few years ago by appointing authorised agents to distribute its goods in Cambodia, Laos and Myanmar.
Sales of Thai-Danish dairy products in Cambodia are expected to reach 800 million baht this year, and sales in Laos and Myanmar are projected at 20 million baht to 30 million baht, respectively.
Mr Narong hopes to earn 20 million baht to 25 million baht in additional income from the Malaysian market in the first year if a deal is concluded.
DPO’s sales last year stood at 8.7 billion baht, of which 10% came from exports.
According to market and research company ACNielsen, Thailand’s dairy products were valued at 59 billion baht in 2016. Of the total, 20 billion baht came from UHT milk, 4.63 billion baht from milk for children and 5 billion baht from pasteurised milk.
The pasteurised milk market in the first half grew 6-8%, while the market for UHT and drinking yoghurt have contracted. This caused Thailand’s dairy industry to stay flat in the first half.
Over that period, DPO saw sales grow 4-5%, outpacing industry growth. The company expects them to rise by 7% this year, generating 9.30 billion baht, on the back of further expansion abroad.
Adding new distribution channels domestically and ramping up its product portfolio are seen as the key to helping the company achieve its sales target.
DPO launched a new brand this month called “Thai Danish Kid-D”.
The company said that based its projections, first-year sales of 25 million baht are expected.