Sealect Sour-and-Spicy Sardine Salad

Thai Union Frozen Products

Sealect proudly introduces Sealect Sour-and-Spicy Sardine Salad, an innovative culinary sensation created through a perfect combination of oriental Thai sour-and-spicy salad dressing, also containing shallot and chili, and traditional western-style canned sardine in tomato sauce. Sealect Sour-and-Spicy Sardine Salad is in easy-open can, needs no additional preparation and offers tasty experience right away after can lid is lifted up. The newly created recipe is retailed at Bt14 at leading supermarkets and grocery outlets as an alternative choice for sour-and-spicy salad lovers.

Thai Union formed JV to produce high grade tuna oil

Thai Union Manufacturing, Co., Ltd., a member of the Thai Union Group of Companies, has joined hands with Nippon Suisan Kaisha Limited of Japan to produce high grade tuna oil in Thailand. Utilizing the state of the art technologies, the new venture is the first in Thailand that is capable of manufacturing high grade ingredient that is suitable for baby formulas. In addition to creating more value-added products, the JV will also help reduce material wastes from Thai Union Group’s main seafood production lines.


Thai Union Frozen Products PLC (TUF)’s president, Thiraphong Chansiri, revealed that TUF’s subsidiary Thai Union Manufacturing, Co., Ltd., entered into an agreement with Nippon Suisan Kaisha Limited, a leading Japanese seafood company, to set up TN Fine Chemicals Co., Ltd. With the registered capital of 90 million baht, the new firm aims to develop seafood by-products into fine chemical products that can be used as ingredients in dietary supplements and pharmaceutical products.

While Thailand is a major seafood producer in the world, the country is also the world’s number one manufacturer and exporter of processed tuna. Thai Union Group management believes that seafood by-products have significant potential for further development into high value-added products. TN Fine Chemicals plans to invest more than 80 million baht in equipment and machinery based on new production technologies that are never used in Thailand before. The first phase of production will begin with tuna oil products. The firm aims to produce high grade tuna oil suitable as an ingredient for baby formulas that help enhance brain development in young children.

Besides tuna oil, the joint investment also plans to extract glucosamine from shrimp and crab shells. Glucosamine is a key ingredient of pharmaceutical products for treating arthritis. The chemical can act as a lubricating fluid in the human joints.

Khun Thiraphong further emphasized, “These new projects will make better use of waste materials from our main seafood production lines, helping us achieve our environmental objectives, while adding values to these by-products and diversify our product portfolio.”

At this initial phase, TN Fine Chemicals will produce 540 ton of tuna oil per year, with sales expected to exceed 125 million baht. Japan, the US, and the European Union are key export markets for this product. This investment represents a significant step in turning Thailand's seafood by-products into high value-added export items with a potential to generate substantial income for the country and promoting a more efficient use of natural resources.

As for TUF, business performance for the first three quarters has shown remarkable growth. Net profit rose 39% from the same period a year ago to reach 2,625.4 million baht. Sales in Thai baht term equaled 51,792.8 million baht, or 1,495.6 million US dollar term. The company is confident that all of its subsidiary companies can continue to grow sustainably in terms of sales and profits.

TUF branches into tuna oil

       Thai Union Manufacturing Co, an affiliate of Thai Union Frozen Products Plc (TUF),has formed a joint venture with Nippon Suisan Kaisha Limited, a leading Japanese seafood company, to produce high-grade tuna oil.
       The new company, TN Fine Chemicals Co, has 90 million baht in registered capital and will convert seafood byproducts into refined chemical products that can be used as ingredients in dietary supplements and pharmaceuticals, said TUF president Thiraphong Chansiri.
       Thailand is the world's main producer and exporter of processed tuna, he said.
       The group believes that seafood byproducts have significant potential to be developed into high value-added goods.
       TN Fine Chemicals plans to invest more than 80 million baht in new equipment and machinery that has never been used in Thailand before, said Mr Thiraphong.
       The first phase will produce high-grade tuna oil suitable for use in baby milk formula.
       TN Fine Chemicals plans to produce 540 tonnes of tuna oil a year, garnering sales of more than 125 million baht. The product will be exported mainly to Japan,the US and the EU.
       The joint venture firm also plans to produce glucosamine, a health food product extracted from shrimp and crab shells.
       "These new projects will make better use of waste materials from our main seafood production lines, helping us achieve our environmental objectives,while adding value to these by-products and diversify our product portfolio," Mr Thiraphong said.
       TUF, the world's second-largest tuna company, reported strong sales of more than 51 billion baht in the first nine months of the year.
       TUF shares closed yesterday on the SET at 27.25 baht, down 25 satang, in trade worth 46.54 million baht.

THAI UNION IN TUNA-OIL JV WITH JAPANESE SEAFOOD FIRM

       Thai Union Manufacturing has joined hands with Nippon Suisan Kaisha of Japan to produce high-grade tuna oil in Thailand.
       Utilising state-of-the-art technologies, the new venture is the first in Thailand that is capable of manufacturing high-grade ingredients suitable for baby formulas. Besides creating more value-added products, the advanced technology will also help reduce material wastes from Thai Union Group's main seafood production lines.
       Thai Union Manufacturing is a subsidiary of Thai Union Frozen Products, the country's leading seafood and tuna manufacturer and exporter, while Nippon Suisan Kaisha is a leading Japanese seafood company.
       The plant is located at Samut Sakhon, TUF's manufacturing-based area.
       TUF president Thiraphong Chansiri said yesterday that it has to set up TN Fine Chemicals to facilitate the joint venture operation. With registered capital of Bt90 million, the Japanese partner holds the majority stake of 51 per cent and TUF handles the remainder.
       The new firm aims to develop seafood by-products into fine chemical products that can be used as ingredients in dietary supplements and pharmaceutical products.
       While Thailand is a major seafood producer, the country is also the world's No 1 manufacturer and exporter of processed tuna.
       Thai Union Group believes that seafood by-products have significant potential for further development into high value-added products.
       TN Fine Chemicals plans to invest more than Bt80 million in equipment and machinery based on production technologies that have never been used in Thailand before.
       The first phase of production will begin with tuna oil products. The firm aims to produce high-grade tuna oil suitable as an ingredient for baby formulas that help enhance brain development in young children.
       Besides tuna oil, the joint investment also plans to extract glucosamine from shrimp and crab shells. Glucosamine is a key ingredient in pharmaceutical products for treating arthritis. The chemical can act as a lubricating fluid in human joints.
       "These new projects will make better use of waste materials from our main seafood production lines, helping us achieve our environmental objectives, while adding value to these by-products and diversifying our product portfolio," Thiraphong said
       At this initial phase, TN Fine Chemicals will produce 540 tonnes of tuna oil per year, with sales expected to exceed Bt125 million. Japan, the US and European Union are key export markets for this product.
       This investment represents a significant step in turning Thailand's seafood by-products into high value-added export items with the potential to generate substantial income for the country and promote a more efficient use of natural resources.
       TUF's performance for the first three quarters has shown remarkable growth. Net profit rose 39 per cent from the same period a year ago to Bt2.63 billion. Sales reached Bt51.8 billion, or US$1.5 billion. The company is confident that all of its subsidiaries can continue to grow sustainably in sales and profits.

BT90M INVESTMENT IN HOUSE BRANDS

       Central Food Retail, a leading supermarket operator, will spend Bt90 million in developing house brands with the ambition of getting them to double their contribution to sales by the end of next year.
       According to a study completed in September by ACNielsen, the sales of hourse brands at most retail outlets had grown by more than 20 per cent year on year.
       Phattaraporn Phenpraphat, vice president for marketing and public relations of Central Food Retail, which operates Tops supermarkets and Central Food Hall stores, said Thai consumers had changed their shopping habits and were opting more for cheaper house brands.
       "The ACNielsen survey also shows that the contribution to sales by house brands had grown from between 2 and 3 per cent last year to 3 to 5 per cent this year," she said.
       Phattaraporn added that the firm was going to concentrate on developing its won brands and spend more on packaging and marketing them. It expects the sale of its house brnads to rise from the Bt450 million targeted for this year to about Bt750 million next year. Of the house brands, 70 to 80 per cent are food items.
       Central Food Retail spent almost three years doing a feasibility study and looking into consumer insights about the possibility of its own brands, and launched more than 1,000 items under the house brands of Cooking for Fun, My Choice and Tops.
       The Tops brand covers consumer products in food and non-food categories, Cooking for Fun covers food and cooking ingredients, while My Choice covers fresh food and nonfood items.
       Nick Reitmerier, vice president of the buying department responsible for perishable, produce, international food, wine and own-brand items, said the company was hoping to double the sales contribution of its own brands from the current 2 per cent to 4 per cent next year.
       In the first 10 months of this year, house-brand products posted Bt400 million in sales and are expected to hit Bt450 million by year-end.
       "We want to increase the number of house-brand items from the current 1,000 to about 1,500 next year," Reitmeier said.
       Tops and Central Food Hall stores have about 16,000 products on their shelves, and Central Food Retail wants to differentiate its own brand by focusing on pricing as a sales strategy.
       "We want to promote our brands as top-quality products that are good value for money," he added.
       Meanwhile, Phattaraporn said local vendors supplied about 70 to 80 per cent of the house-brand products and that there appeared to be great opportunities for these items overseas.
       "We have been approached by retailers in the UK, Singapore and Belgium. The deals will be concluded very soon," she said.

JITRAMAS TO FOCUS ON CHEF BOX GROWTH

       Jitramas Trading will focus more next year on its catering services and fostering brand awareness for its Chef Box ready-to-eat meals.
       Jitramas said premium services now accounted for Bt500 million of Thailand's Bt20-billion food-catering market.
       Sales and marketing director Wannadda Khorprasert yesterday said the firm would add three or four more distribution centres to the one it had now, for more efficient delivery of Chef Box ready-to-eat meals to corporate customers, seninars and conferences.
       Corporations, the main target group, will benefit from the recovery, and Chef Box and the company's Party Solutions catering unit can ride that to revenue growth, Wannadda said.
       The company began delivering Chef Box meals early this year.
       "We'll focus on raising brand awareness among corporate customers through public relations, the media and direct and telesales," she said.
       Jitramas is also negotiating with budget airlines to allow it to cater passengers' meal service. It already has Nok Air as a client.
       Wannadda said the company would also increase its meal service for Transport Co bus routes.
       Jitramas expects sales revenue of Bt450 million next year, up from a projected Bt350 million this year.
       However, some units have been affected by the economic slowdown.
       "Rice Station, our unit operating in food courts, has been affected by the slowdown," she said.
       Wannadda said the company would increase the proportion of domestic sales from 30 per cent to 40 per cent while cutting exports from 70 per cent to 60 per cent, in order to diversify risk.
       She said the firm should not rely too much on exports, because foreign markets fluctuated more. Jitramas exports frozen foods and seasoning sauces to Australia, Europe, the US and Canada.

CADBURY HEAD SLAMS KRAFT'S "LOW GROWTH" BUSINESS PLAN

       British confectioner Cadbury criticised US food giant Kraft Foods for having a "low growth" business model in rejecting their "unappealing" takeover bid a letter on its website showed.
       The letter from Cadbury chairman Roger Carr to Kraft Foods chairman and chief executive Irene Rosenfeld explained why Cadbury rejected the offer.
       Kraft Foods recently launched a 10.2 billion pound (Bt572.6 billion) bid for Cadbury, an offer spurned by the British group.
       Despite the snub, Kraft said it hoped the venerable maker of Cadbury Dairy Milk chocolate bars other brands would eventually jump on board.
       "In my letter of August 31, I informed you that the board had rejected your unsolicited proposal on the grounds that it is unattractive and fundamentally undervalues Cadbury," wrote Carr in the letter dated yesterday.
       "Under your proposal, Cadbury would be absorbed into Kraft's low growth conglomerate business model, an unappealing prospect which contrasts sharply with our strategy to be a pure-play confectionary company."
       "Your proposal fundamentally fails to reflect the current value of Cadbury as a standalone business, its growth prospects and the potential synergies of a combined entity."

Food to drive exports

       Food products will be a key driver of Thailand's export growth next year, experts say.
       The sector's shipments are predicted to grow by 4.57% to top 755 billion baht in 2010 compared with an 8% contraction this year, said Yuthasak Supasorn,director of the National Food Institute.
       Signs of global recovery have prompted the institute to increase its export forecast for the year to a contraction of 8% to 722 billion baht, up from a slide of 15-20%.
       "The improving target is due to the improving global economy while stimulus packages from various government have also boosted food demand," he said.
       Thailand's shipments to the EU are expected to climb by about 10% next year driven by a regional recovery, said Banjongjit Angsusingh, executive director of the Thai Trade Centre in London.
       This year's shipments are expected to fall by 10-15% to $21.26 billion.
       The trade centre suggested the government next year map out stimulus measures to attract European entrepreneurs, particularly those who want to use Thailand as a production base,especially for animation and printing.
       As the UK will host the 2012 Olympic Games, Thai manufacturers and exporters are recommended to expand product lines to capitalise on the event.
       Exporters, meanwhile, are being urged to tap the elderly and health food markets.
       Food, textiles and electronics products can expect to see strong growth for the rest of the year, said Chantira Jimreivat Vivatrat, executive director of Thai Trade Center in Los Angeles.
       But exports to the US this year are set to shrink by about 5% to $19.56 billion, she said.
       Mrs Chantira said she could not provide a forecast for next year without input from the private sector. But exports will focus more on niche markets through institutions and organisations,such as the US army, hotels, hospitals,cruise ships, prisons, sports stadiums and concert venues, she said.
       Those niche markets are expected to increase the country's export income by not less than $100 million, she said.
       Exports to Japan are expected to edge up over next year after a 20% contraction in 2009 from $20.09 billion last year,said Amparwon Pichalai, executive director of Thai Trade Center in Tokyo.
       Consumers in Japan's fragile economy are expected to remain cautious over their spending until next year, she said.
       Commerce Minister Porntiva Nakasai recently said Thailand's export decline has bottomed out, with single-digit growth forecast for the fourth quarter,which could reduce the full-year contraction to between 10% and 13%.
       Improving global demand was expected to drive the Kingdom's export growth upwards of 10% in 2010, she said.

INDUSTRIES READY TO STAND IN DEFENCE AGAINST US CHARGES

       Three Thai industries-shrimp, garment and sugar-may face difficulties in exports to the US next year due to accusations of hiring child and migrant labour.
       Kessiri Siripakorn, minister (commercial) for the Office of Commercial Affairs in Washington DC, said the US Labour Department had issued an announcement against the industries.
       "Thai industries will have 90 days, until the middle of December, to clarify about the accusations. If they may be subjected to trade barriers," said Kessiri.
       She called for the government and related industries to discuss the matter and present clear evidence to defend their industries.
       Kessiri warned that under the Barack Obama administration, all industries must be aware of new non-tariff barriers, particularly ones focusing on labour and environment.
       Thai manufacturers would face greater difficulties in exporting if they do not promptly deal with rising non-tariff barriers, she said.
       Poj Aramwattananont, president of Thai Frozen Foods Association, said the US government report was untrue and the association had already presented evidence to the US Embassy in Bangkok.
       The association will also present evidence regarding the matter to Washington as the association has frequently worked in cooperation with Immigration Custom Enforcement for inspecting all factories and their suppliers to ensure they have not hired any child or migrant labour in the industry.
       So far, more than 1,000 factories have been investigated. The industry employs more than a million people. We are confident no child or migrant labour was hired in our industry, Poj said.
       To ensure that the shrimp and other industries will not face any obstacles resulting from the report, the association will soon meet the Foreign Ministry and related Thai government agencies to clarify the issue to the US government.
       Wallop Vitanakorn, secretary general of the Thai Garment Manufacturers Association, said the US report must have been the result of a misunderstanding.
       He said most garment exporters to the US must normally comply with high standards required by their importers, including labour issues.
       Export of garments to the US must follow a "code of conduct" which specifies that no migrant labour of child labour must be hired in the industry. Moreover, under the agreement between Thai garment manufacturers and American buyers, it states that employers must have a fair contract with laborers, including restricting maximum period of work to 60 hours a week, and set a fair payment and days off, as per the law.
       Wallop said American buyers also regularly send teams to inspect their factories every six months to ensure the producers had followed the code of conduct.
       He said it was impossible for garment exporters to break this tight rule. The association will soon cooperate with the Thai government and collect information to defend against this accusation.

       Under the Barack Obama administration, all industries must be aware of new no tariff barriers, particularly ones focusing on labour and environment.

TARGET GREYING POPULATION, EXPORTERS TOLD

       The National Food Institute yesterday urged manufacturers to focus on creating food products for the older generation, soon to become the biggest consumer group in the world.Europe, Japan and the Middle East are still major food importing markets while demand is increasing from emerging markets including Russia and Africa.
       NFI director Yuthasak Supasorn told a seminar on value creation and the Thai food industry yesterday that Thailand has great potential, with abundant fruit and vegetables, to produce food for older people. The elderly society is expanding particularly in Japan and the European Union.
       Europe is the largest food importer and has high purchasing power. However, the region is greying, so food exporters should send over healthy foods, vegetables and fruit.
       The institute's study also showed that Japan is becoming a mature society, with one-fourth of its population aged over 60.
       Thai food exports to those five target markets include fruit juice, herbal tea, alcohol products made from tropical fruit, products from bees, snacks, processed seafood, ready-to-eat chicken, fruit snacks, sauces, and other ready-to-eat foods.
       Russia is an interesting market as it relies on food imports. The global financial crisis has shaken Russia's economy, prompting its people to care more about product prices.
       Russia has a cold climate, so potential food products for this market are ingredients made from rice, followed by energy drinks, canned fruit and tropical fruit.
       South Africa is a gateway to Africa. The country has high purchasing power. The African market prefers spicy and frozen foods. Thai exotic sauces have high potential.
       In the Middle East, Thailand already provides food products to the United Arab Emirates and Iran.
       Yuthasak said the global economic crisis, rising health consciousness and an ageing society have changed consumer behaviour. Thailand as a food exporting country should take note of the trends in market demand.
       Thailand's total food exports had averaged Bt700 billion per year. The government has revised its forecast for food exports from a fall of 15-20 per cent to 8 per cent after assessing the environment in the first nine months.
       It projects the country's total food exports reaching only Bt722 billion this year compared with Bt778 billion last year.
       However, food exports next year are expected to improve to Bt750 billion, of which 50 per cent will be raw materials, so the Bank of Thailand should keep the baht at Bt36-Bt37 against the greenback, he added.

Halal receives export focus

       The government aims to expand halal food exports by at least 10% a year between 2010 and 2014, helped by new strategies to drive the development of products for Muslim markets.
       A panel on halal industry development chaired by Deputy Prime Minister Korbsak Sabhavasu yesterday approved strategies to develop the industry.
       They include a plan to strengthen the potential of the halal industry to meet world standards and conform to domestic demand; promote the competitiveness of both entrepreneurs and workers in the industry; increase Thailand's capability in certifying food as meeting Muslim halal standards, and expand markets and upgrade research and development.
       The targeted products are vegetables, fruits, fishery and livestock products and tourism and health care services.The strategy calls for five southern provinces - Pattani, Yala, Narathiwat, Satun and Songkhla - to become the production base for halal products.
       Mr Korbsak said various agencies would complete an action plan within one month.
       The world's Muslim population is about 1.9 billion or 29% of the total world population. Muslim consumers include 8 million in North America with a market value of $1.75 billion per year, 18 million in Europe ($2.63 billion), and 200 million in Indonesia ($2.19 billion).
       The total global halal market is estimated to be worth $635 billion.
       Thailand is currently the fifth-largest halal food exporter, controlling a 5.6% market share.
       In 2008, Thai halal exports were worth 5.19 billion baht, up 53.3% from a year earlier. In the first seven months this year, exports dropped 26.9% to 2.49 billion on shrinking global consumption.
       A previous nine-year halal industry development plan ending in 2010 had a budget of 3.3 billion baht. The new budget was not disclosed.
       The Thai Commerce Ministry has been encouraging small and medium-sized entrepreneurs to explore the halal market by joining its trade trips abroad. The ministry also advises manufacturers on how to make products and run businesses in strict conformity to Islamic rules.
       In Thailand, halal products are processed in accordance with the regulations of the Central Islamic Committee of Thailand for Halal Food Standard B.E. 2544, which covers production plants, food products, raw materials, employees, transport and storage, distribution and services.

Growing market for Thailand producers

       Growing global concern for health has created a timely opportunity for Thai functional food entrepreneurs to develop and export products to high-potential markets, said Yuthasak Supasorn, president of the National Food Institute.
       Functional food's global market will be worth at least US$53 billion in 2009 and $90 billion in 2013, up from $44.9 billion in 2008, according to research by just-food.com, the food industry's online resource.
       Key markets for Thai operators include South Korea, Japan, China, India, the UK, Germany, the United States and Australia, as well as Thailand.
       "People around the world are concerned about their health. This creates an opportunity for Thai operators because Thai foods are well-known, especially for the use of herbs as ingredients.But we must apply creativity and high standards to our products. Besides, there is also a need for entrepreneurs to understand market demand and how to build a business in each market," said Mr Yuthasak.
       Consumers are especially attracted to products that can reduce the risks of heart and cardiovascular diseases, cancer,diabetes and hypertension, he told a seminar yesterday.
       Foods that prevent obesity or enhance immunity, digestion and beauty are also in demand, he said.
       Asian markets like China, India and South Korea are likely to soar. Japan's market is estimated to be be the world's biggest, with a value of $8.42 billion, but is already saturated.
       "The South Korean market consists mostly of female consumers," he said."They look for quality products and raw materials from reliable producers. They love natural products and care quite a bit about beauty. Doing business in South Korea would require a business partner with insight into its Functional Health Food Law."
       The functional food markets in China and India are set to surge because of the countries' fast-growing economies and immense populations. Chinese consumers favour capsules while Indians prefer drinks.
       The UK is the largest market in Europe,with an estimated value of $2.48 billion.Germany's market is expected to be worth $1.3 billion in 2013, up from $0.97 billion in 2008.
       Thai operators should not overlook the US, which has the world's second biggest market after Japan, said Mr Yuthasak.
       The US market may rise to $6.51 billion in 2013, up from $5.25 billion in 2008.But operators must understand the country's strict import regulations as well as its diversified demand because of its racial and cultural diversity.

KRAFT BIDS 10 POUND BN FOR CADBURY

       US giant Kraft Foods yesterday launched a Pound10.2 billion (Bt571.2 billion) takeover bid for Cadbury but the British confestionery maker has rejected the offer, Kraft Foods said.
       Kraft said it hoped Cadbury, whose share price surged more than a third in value following the bid announcement, would eventually come round as the US company looks to increase annual revenues to US$50 billion (Bt1.8 trillion) a year.
       A tie-up would merge leading Kraft brands Oreo biscuits and Maxwell House coffee with Cadbury's Dairy Milk chocolate and Trident chewing gum.
       "Kraft Foods today announces that it has made a proposal to the Cadbury board to combine the two companies. The board has rejected this proposal," Kraft said in a statement issued to the London Stock Exchange.
       "The offer values the entire issued share capital of Cadbury at Pound10.2 billion," it added.
       Shares in Cadbury shot up 38.73 per cent to 788 pence soon after the announcement.
       Kraft Foods said it had proposed 300 pence in cash and 0.2589 new Kraft Foods shares per Cadbury share.
       This valued each Cadbury share at 745 pence, 31 per cent higher than Cadbury's closing share price last Friday.
       "This proposed combination is about growth," Kraft Foods chairman and chief executive Irene Rosenfeld said in the statement. "We are eager to build upon Cadbury's iconic brands and strong British heritage through increased investment and innovation."
       She added: "We hope to engage with the Cadbury board on a constructive basis with the goal of consummating a recommended transaction."
       Kraft Foods said a tie-up would lift its revenues to about $50 billion a year from $42 billion presently.
       It added that by combining the groups, plans for job cuts at Cadbury in Britain would be scrapped.
       "Our current plans contemplate that the UK would be a net beneficiary in terms of jobs. For example, we believe we would be in a position to continue to operate the Somerdale facility, which is currently planned to be closed, and to invest in Bournville, thereby preserving UK manufacturing jobs," Kraft said.
       Kraft also makes Dairylea cheese, Kenco coffee and Toblerone chocolate.
       "It's competitively priced, but I think they will have to go higher," Martin Deboo, an analyst at Investec Securities, said by phone. He has a "hold" recommendation on Cadbury.
       Cadbury's profits after tax hit Pound313 million in the six months to June compared with Pound113 million in the same period of 2008. Revenues advanced 13 per cent to Pound2.77 billion.
       Cadbury last year completed the demerger of American Beverages. Prior to the split, Cadbury was known as Cadbury Schweppes. The US business, which has been renamed Dr Pepper Snapple Group, is listed on the New York Stock Exchange.
       Kraft, based in Northfield, Illinois, said the combination would create "a global powerhouse in snacks, confectionery and quick meals", with leading positions in developing markets including India, Mexico, Brazil, China and Russia.
       Kraft's second-quarter profit rose 11 per cent to $827 million, although revenue fell 5.9 per cent to $10.16 billion as the dollar's strength weighed on international sales.
       AT A GLANCE
       - A tie-up would merge leading Kraft brands Oreo biscuits and Maxwell House coffee with Cadbury's Dairy Milk chocolate and Trident chewing gum.
       - "This proposed combination is about growth," Kraft Foods chairman and chief executive Irene Rosenfeld said.
       - She added: "We hope to engage with the Cadbury board on a constructive basis with the goal of consummating a recommended transaction."
       - "Our current plans contemplate that the UK would be a net beneficiary in terms of jobs. For example, we believe we would be in a position to continue to operate the Somerdale facility, which is currently planned to be closed, and to invest in Bournville, thereby preserving UK manafacturing jobs," Kraft said.

EXPORTERS TURN FOCUS ON CHINA'S YOUTH

       Thai food exporters are pinning their hopes on the changing lifestyles of China's younger generation to boost sales of ready-to-eat meals in the huge market.
       Thai processed and frozen-seafood products have great potential to serve this group, whose modern lifestyles and higher purchasing power see them opting for meals that can be prepared quickly and easily, industry insiders said.
       Paiboon Ponsuwanna, chairman of the Thai National Shippers Council, said Thai food exporters in general should look to capture more of the Chinese market, of which they currently have only a 3- to 4-per-cent share.
       Chinese consumers' purchasing power is still relatively high, he said, as the impact of the global economic downturn was less dramatic in China than in other countries.
       "The lifestyles of young Chinese, and the middle class, have changed to resemble those in the West, with people living in condominiums and eating fast food and ready-to-eat meals," Paiboon said.
       Thailand's major export markets for processed food products are concentrated mainly in the US, the European Union and Japan. However, these markets have been hit by the economic crisis, lowering the purchasing power of consumers, who have turned to cheaper goods.
       Paiboon suggested Thai exporters conduct market surveys to find out which products have the most potential in China.
       So far, orders have been strong for Thai ingredients such as meatballs, beef, squid and shrimp. Chinese investors are also interested in Thailand thanks to the plentiful supply of raw materials here. However, the Kingdom's recent political chaos continues to leave many potential investors hesitant, Paiboon said.
       Thai processed-food and frozen-seafood prices have declined, but total export volume has increased, Paiboon said. Shrimp prices are trending downward as global consumption drops, particularly in economic powerhouses like the US and Japan.

HUGE GROWTH POTENTIAL FOR THAI FOOD AMONG HISPANICS IN US MARKET

       Thai food and related products have a strong growth potential among Hispanics in the US market despite the ongoing economic crisis, US importers said yesterday.
       Juvenal Chavez, founder and CEO of Mi Pueblo Food Centre, the leading Hispanic neighbourhood grocery-store chain in northern California, said imports from Thailand are projected to triple to US$80 million to $100 million (Bt2.73 billion to Bt3.41 billion) annually in the next few years.
       At present, the chain sells $20 million worth of Thai products at its 18 stores, where demand for Thai food and related items has been growing strongly among Hispanic customers.
       Hispanic or Spanish-speaking Americans are the third-largest demographic group in the US, accounting for 14 per cent of the total population.
       Their combined purchasing power is estimated at more than $1 trillion a year.
       "Thailand is a solid source of foods and consumer goods to serve the Hispanic market, as the consumption pattern [of Thais and Hispanics] are similar. In addition, Thailand is well-known as the kitchen of the world," he said.
       Chavez, who is in Bangkok to source new products from Thailand for his stores, said despite the US economic downturn, his company's total sales continue to grow at 10-15 per cent annually - higher than the industry's average.
       Overall, the chain's turnover has reached $300 million this year, up 25 per cent year on year.
       Chavez said Thai rice, shrimps, fillets, canned food, mobile-phone accessories, garments, kitchenware, furniture and footwear have strong growth prospects among the Hispanic market.
       Pramook Jirdpongsatorn, president of California-based PK Food, a major US importer of Thai products, said Thailand should tap the Hispanic market, due to high growth potential.
       Despite the US economic crisis, PK Food also reported a strong sales growth this year.
       Department of Export Promotion director-general Rachane Potjanasuntorn agreed that Hispanics should be the target market for Thai exports.
       Most exporters have already tapped other well-known markets in the US, but Hispanics remain underserved, he said.

Chia Meng cooks up ready-to-eat germinated brown rice

       Chia Meng Rice Group, the country's leading rice trader and exporter, plans tolaunch ready-to-eat GABA, or germinated brown rice, as the latest innovation in Thailand's rice industry.
       Under the "Golden Phoenix Ready Rice" brand, the product offers cooked GABA rice in a microwavable container with a lengthy shelf-life of up to two years, said Vasana Manathanya, brand and marketing manager of Chia Meng's subsidiary, Bangsue Chia Meng Rice Mill Co."The product is aimed at healthconscious target groups and a choice for consumers' demand for new lifestyle products," she said.
       The company plans to market GABA rice in November after receiving approval from the Food and Drug Administration.Health stores, premium retail outlets and direct sales are key selling channels.Chia Meng Group may also export the rice, especially to Asian markets such as Singapore and Hong Kong.
       Since the product employs advanced know-how, its retail prices will be high,at about 30 to 35 baht for a 180-gramme cup, or three times the price of normal rice.
       Gamma-aminobutyric acid or GABA is naturally produced by soaking brown rice in water for about four to six hours.Researchers have found that GABA has health benefits, helping lower blood pressure, improve kidney function and treat insomnia.
       Chia Meng last week also launched a range of nutritious rice under the V-Life brand to tap into the growing market for healthy grain products among Thai consumers.
       The healthy rice market is a strong niche market worth about 450 million baht this year and expected to rise to 1 billion in the next few years, said Sopan Manathanya, president of Chia Meng Marketing Co.
       The company now has about 50 million baht in sales in the segment, giving it an 11% share. The products are aimed at upper-end buyers with strong purchasing power.
       "V-Life products will help increase our sales income to about 100 million baht and raise the market share to 20%by the year-end," said Mrs Sopan.
       The Rice Department expects to see more varieties of healthy rice enter the market soon to offer health benefits and add value to the grain.
       Several varieties of nutritious rice including rice mixed with vitamins, herbcoated rice and GABA rice - have been offered in recent years to tap the growth,said Laddawan Kunnoot, director of the Bureau of Rice Products Development.
       Although this is a niche market compared with about 10 million tonnes of rice consumed locally each year, the department supports any developments that will eventually increase income for farmers, says Ms Laddawan."It's a winwin for all sides," she said.
       The department has regularly conducted research and development for innovations to rice and is willing to share its findings with manufacturers for commercial development, she added.

INDUSTRIAL INDEXES SHOW IMPROVEMENT SINCE JANUARY

       Thailand's industrial indexes have improved significantly since the start of the year, with the July manufacturing index contracting only 9 per cent year on year compared to 25.6 per cent in January, according to the Industrial Economics Office.
       The index in February contracted 23.1 per cent year on year, March by 23.1 per cent, April by 12.8 per cent, May by 12.4 per cent and June by 6.8 per cent.
       Arthit Wuthikaro, director-general of the office, yesterday said the month-on-month figures had also shown improvement since February, when the index rose 0.5 per cent from January.
       In March, the index expanded 14.2 per cent month on month. Due to political violence, the April figure contracted 8.7 per cent, before expanding 9.2 per cent and 6.6 per cent in May and June respectively.
       The July index, however, dropped 1.3 per cent from June.
       Arthit said that despite the July reversal, the index should return to positive territory soon due to new orders in several industries and many plants having to increase capacity as a result.
       July capacity utilisation stayed at 57 per cent, well above the trough of 50 per cent in February.
       Hard disk drives are one sector for which the manufacturing index has increased for three consecutive months, as manufacturers have been able to offer new products to customers. They are, however, concerned about a labour shortage.
       In the first seven months of the year, the sector's output and distribution dropped 6.3 per cent and 6.5 per cent respectively from the same period last year. The sector is expected to show positive growth in the fourth quarter.
       The frozen-food sector in July also enjoyed growth in manufacturing and sales.

Local plastics producers optimistic

       The outlook for the local plastics industry is improving in the second half of this year, thanks to demand for plastic packaging in the food and electronics industries, according to the Petroleum Institute of Thailand (PTIT).
       According to the institute's research,plastic product growth contracted by 5% in the first half, reflecting poor purchasing power of consumers.
       However, the study found that the trend in orders had started to rebound,said Kriengsak Wongpromrat, the assistant executive director of the PTIT.
       Demand is rising for packaging for food, agricultural products and for hard disk drives but is sluggish among customers automotive, construction and electrical appliance industries.
       "After declining continuously since the economic slowdown started (late last year), demand was steady early this month. That showed us the falling pace had stopped and may be starting to head upward this year, but this is hard to predict," said Mr Kriengsak.
       Ready-to-eat food products have played a big role in lifting plastic demand, as more consumers cut expenses by eating more meals at home, he said.
       "But [demand for packaging of] hard disk drives in the electronic sector has risen due to the global demand," he said.
       Mr Kriengsak said that packaging businesses accounted for 40% of the local plastics industry, with 12% shared by electronics,7% by automobiles and parts, and 6% by construction materials.The total market was worth 370 billion baht last year with volume of 3.25 million tonnes.
       PTIT, as an information service provider and researcher for the petroleum and related industries, was hired by the Office of Industrial Economics to collect data on the plastics sector. The aim is to better serve the demand of operators as well as develop the industry in the long term.
       A total of 3,000 plastic and related industries out of 5,000 registered companies have participated by providing data to the institute. Major categories include 900 companies in packaging,followed by electronics, automobiles and construction materials.
       Arthit Wuthikaro, the OIE directorgeneral, said the research would help operators gauge demand trends, such as for high-grade film products, which are now imported.
       The OIE will join with the Board of Investment and other agencies to promote locally made film products through investment privileges, Mr Arthit said.
       For the future, research will go toward the bioplastic industry, since concern about climate change is on the rise throughout the world.

Food exporters have doubts

       Food exporters remain unsure whether the Thai and world economies have bottomed out, as revived purchase orders for Thai foods are mostly short-term.
       "Purchase orders for the food sector until the year-end are still relatively small,with most of them made just for about two months in advance," said Paiboon Ponsuwanna, chairman of the food industry club of the Federation of Thai Industries, at a seminar on Thailand's agro-food economic outlook held yesterday.
       "Advance purchase orders should be for a longer term and sustainable if the world's economy has bottomed out."
       Short-term purchase orders have tended to prevent food operators and exporters from planning their production in the longer term, he said.
       Improved demand from new markets has failed to offset sluggish sales in key markets such as the United States, Europe, Japan and Asean, he added.
       In the first six months of this year,Thailand shipped food products worth 354.96 billion baht -6.6% less than in the first half of 2008- and imports fell 13% to 107.40 billion baht.
       Food exports this year are now projected to shrink by about 7.2% from 722 billion baht last year, an improvement from earlier forecasts of a 14-15% contraction, he said.
       "Thailand's food exports remain in good shape compared with the figures in 2007," said Mr Paiboon.
       "The performance would be negative if we compared it with that of last year,when exports saw phenomenal growth as the sector was driven by speculation on fears of food and energy shortage."
       Dr Olarn Chaipravat, an honorary adviser to the Fiscal Policy Research Institute Foundation, said Thailand's future policy needs a better understanding of the interconnections between the prices of oil, agricultural commodities and financial assets.
       "For Thailand's policy framework over 10 to 15 years, it is essential to study demand for alternative energy, the increase of the world's population, climate change, as well as a new mechanism to raise income of Thai farmers," he said.

Chokdee to raise funds from MAI for expansion

       Chokdee Dimsum Restaurant plans to grow domestically and venture abroad in the next three years with funds to be raised from the stock market.
       Managing director Dheeraphop Siraprapathum said last week that the company was working with a financial adviser to prepare for listing on the Market for Alternative Investment (MAI).
       According to the listing plan, it has already separated its business into three companies.
       Chokdee International Food operates the central kitchen and distributes frozen dim sum to all branches nationwide.
       Chokdee Dimsum Restaurant operates the dim sum restaurants.
       And Chokdee International Franchise oversees its franchised restaurants.
       Listing on the MAI would be the springboard for expansion, Dheeraphop said.
       Domestically, Chokdee Restaurant would like to enter department stores and shopping centres, while it would like to penetrate overseas markets such as China.
       "To have a restaurant in one shopping mall, we need at least Bt4 million. Meanwhile, if we would like to have a Chokdee Dimsum Restaurant overseas, we have to set up a central kitchen. Therefore, the investment will increase to Bt20 million per branch, which is too much for us. We need to mobilise funds from the bourse," he said.
       The enterprise would grow rapidly after listing on the MAI, he said.
       Since its establishment in 2000, it has multiplied to 18 branches, of which nine operate around the clock.
       "We are the first dim sum restaurant in Thailand that sets reasonable prices, which everyone can afford and is open for 24 hours. This is our strength. We can utilise every resource such as employees for the most effective results to gain more money. And night-time is a good period for making money," he said.
       The company plans to increase its coverage by six branches this year, of which three have already been created by franchising both in Bangkok and upcountry.

EXPORTERS SEEK TAX CUTS FOR REST OF YEAR

       The government has been urged to cut withholding and income taxes applying to exporters as an urgent measure to boost export growth in the remaining months of 2009.
       The call was made yesterday by exporters themselves, saying that proposed cuts to import duties may be ineffective in bolstering export growth in all sectors.
       Next week the Commerce Ministry is to propose a cut in import duties to the Cabinet, as a measure to promote export growth in the second half of the year. The measure was suggested earlier by 23 trade associations.
       However, Thai Garment Manufacturers Association secretary-general Wallop Vitanakorn said that import tariffs for his industry were already very low. Only 1-per-cent import duty is payable on yarn and 5 per cent on fabric. Import tariffs on machinery for the indystry are also only 1 per cent, he said.
       The Asean-China Free Trade Agreement will also abolish import taxes on textile and fabric imports next year.
       To ensure that the government's support measures will help all industrial sectors, the government should cut withholding taxes for all exporters from 3 per cent to 1 per cent instead of cutting import duties, he said.
       Although the Finance Ministry may lose some income, it should not face any legal difficulties in cutting withholding taxes to give the export sector temporary help for the remaining month of the year, Wallop said.
       He also called for the government to reduce company income taxes from 30 per cent to 25 or 28 per cent for exporters, because high tax collections were part of the burden being carried by exporters.
       Wallop said the government had already reduced income taxes for stocl-marketing investors. It should also consider cutting taxes for the export sector, which was a major engine driving Thailand's economic growth.
       In addition, to increase liquidity for small- and medium-sizes enterprises (SMEs), Wallop called for government-owned banks to relax the qualifications required for loan finance.
       For example, government banks should lower their collateral or mortgage security requirements from 80 to 100 per cent of total loan value to less than 50 per cent for SMEs.
       Thai Frozen Foods Association president Panisual Jamnanwej said that in this industry, import tariffs were major burden only for shrimp exporters.
       He suggested that the government should consider cutting import tariffs on shrimp feed because this was a major cost of production for shrimp exporters.
       To ensure smooth export growth, the government should stabilise the exhcange rate, as the baht's apprecition had caused difficulties for exporters' competitiveness, he said.
       A Commerce Ministry source said the Commerce and Finance Ministries had agreed that, instead of cutting taxes related to imports, they should seek new measures that could be implemented more rapidly.
       "The ministry has asked exporters from each tradle association to send their opinions, and on which products they want the government to cut import duties. Responses will be returned to the ministry this week for passing on for the Cabinet's approval, as an urgent measure to lower the burden on exporters," the source said.
       Previously, a proposal to cut related import tariffs to help exporters was rejected by the Finance Ministry as it involved legal changes.
       Nevertheless, the source said cuts to import tariffs should be implemented within a month of receiving Cabinet's approval. This would ensure that exports could return to positive growth next month or in October.
       This would help to avoid a drop in exports earlier projected at a contraction of 18 to 20 per cent, and would mean a drop of only 10 to 13 per cent for the entire year, the source said.

THAI UNION URGES GOVT TO PURSUE FTA WITH EU

       Thailand's leading canned and seafood exporter, Thai Union Frozen Products, has urged the government to strengthen exporters' competitiveness by going ahead with bilateral free-trade negotiations with the European Union.
       Company president Thiraphong Chansiri said Thailand should move ahead on trade liberalisation with the EU to facilitate market access for Thai foods. So far, Thai foods are subjected to high import tariffs compared with other export rivals in the EU.
       "Thai food enterprises have reaped the highest benefit from the FTA's low tariff. The government should consider continuing bilateral trade talks with the EU under the Asean-EU FTA," he said.
       Exports of Thai canned tuna to the EU is subject to 24-per-cent export tariff, while other export rivals such as the African, Caribbean and the Pacific Group of States (ACP) and Andean countries have enjoyed a zero per cent tariff rate.
       Thiraphong said that if the government can negotiate for lower rates to halve the current import tariff, Thai exporters should be able to boost export share in the market.
       He also called for the government to talk to EU countries about increasing market access for sardine and mackerel exports due to their high export potential overseas.
       In addition, the company is expecting other bilateral trade pacts, including with Japan, to rapidly pave the way for higher export growth of agricultural and fishery products.
       However, he called on the government to issue early warning about rising non-tariff barriers as it could hamper export growth of the Kingdom, despite having FTAs.
       Nuntawan Sakuntanaga, director-general of the Trade Negotiations Department, said that talks with the EU under the Asean framework had been suspended due to varying levels of interest among Asean member states.
       However, due to the lack of a clear policy to pursue bilateral talks, the department is waiting for the government's mandate on further negotiations.
       The EU strongly wants to press ahead with a bilateral free-trade pact with Thailand and some countries in Asean as it foresees high potential for market access.