Big dreams from small beans
Dao-Heuang Group plans to add a 50-room boutique hotel to its coffee empire in Laos. By Pitsinee Jitpleecheep
After having established the Dao coffee brand for decades, Dao-Heuang Group, the largest coffee producer in Laos, is ramping up its business with agro-tourism as a strategic move to generate a new revenue stream.
The group is now developing a new boutique hotel on a 30-rai land plot in the highlands of the Bolaven Plateau in southern Laos.
The new hotel is situated near Dao-Heuang’s coffee farm. The hotel business is an initiative of the second generation of DaoHeuang Group, founded by Lao tycoons Leuang and Hao Litdang.
“We’ve been trying to bring in new things to our business umbrella, which will be handled by the second generation of the family apart from relying mainly on coffee business,” said Boonheuang Litdang, the group’s vice president and the eldest daughter of the founders.
The new boutique hotel will be handled by the founders’ third son, Howie, who has an educational background in interior design.
Ms Boonheuang said the group will participate more in the tourism industry, bringing it in line with Laos’s recent policy announcement of Visit Laos Year 2018.
Some 600,000 foreign tourists visited Pakse in Champasak province last year, and the numbers are expected to reach 1 million people this year as the government promotes Visit Laos Year 2018.
“There are only two major landmarks in Pakse for tourists to pay a visit when they come here: the Khone Pha Pheng Falls and Vat Phou (Phou Temple),” Ms Boonheuang said. “We hope that our new agro-tourism business will become one of the attractive landmarks for tourists who visit Pakse.”
As part of the agro-tourism scheme, the company has opened a Dao cafe on part of the 30-rai plot. The planned boutique hotel, an investment worth hundreds of millions of baht, will have about 50 rooms, with prices ranging from US$200-300 a night.
“We aim to make our coffee farm in the highlands of Bolaven Plateau into a new tourist destination in Laos,” Ms Boonheuang said. “People who come here can learn everything about coffee, from planting to coffee bean roasting to finished coffee. It will be a must-visit landmark in Pakse.”
The boutique hotel will also be a new magnet to promote Dao coffee indirectly.
In addition to the hotel, the company will aggressively expand its Dao coffee brand in Thailand this year after entering the country in 2004 to test market feedback.
The company appointed Pens Marketing & Distribution Co Ltd, a Saha Group subsidiary, to distribute Dao 3-in-1 instant coffee via traditional and modern retail chains in June of this year.
“Thailand is our priority market because the population is big and the coffee market is huge,” Ms Boonheuang said. “If we are successful in expanding our coffee here, we believe we can go anywhere in the region easily.”
Dao coffee is in the process of adjusting its product formula and packaging and is expected to relaunch its products with a new image in September.
The company expects sales of 3 billion baht from Dao instant coffee in Thailand by 2020.
Dao-Heuang Group was established in 1991 as a small import-export company. It imported wine and perfume from France, alcohol and cigarettes from Singapore and household goods from Thailand.
The group has diversified into various products ranging from coffee and tea to agricultural and industrial items. Some 90% of its coffee production capacity is exported to more than 10 countries in Europe and Asia under its own brand and others.
Dao coffee contributes about 60% of the group’s sales, worth more than $75 million. The remaining income comes from duty-free retail and other services such as logistics.
The management of Dao-Heuang Group has been gradually transferred to the second generation over the last 12 years, led by Ms Boonheuang, 36, the eldest daughter.
“We intend to make our coffee a longterm sustainable business by putting more focus on developing premium coffee,” Ms Boonheuang said. “We have never changed our mission to become the king of coffee one day.”
Ms Boonheuang plans to spend about $7 million to build a new plant to expand production capacity and add new packaging facilities.
“We invest for the future,” she said. “Nowadays, more people are more interested in Asean coffee. But our challenge is to convince coffee farmers to listen to us and plant coffee in the way we want, otherwise we cannot produce enough premium coffee to sell. The way to cope with this is to extend more coffee contract farming in the future, up from 2,000 families now.”
We have never changed our mission to become the king of coffee one day. BOONHEUANG LITDANG Vice-president, Dao-Heuang Group