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.
Friday, September 25, 2009
Sunday, September 20, 2009
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."
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.
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.
Wednesday, September 16, 2009
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.
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.
Tuesday, September 15, 2009
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.
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.
Saturday, September 12, 2009
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.
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.
Friday, September 11, 2009
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.
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.
Monday, September 7, 2009
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.
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.
Sunday, September 6, 2009
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.
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.
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.
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