Thai food giant to tap West African noodles market

17-May-2012 - Last updated on 18-May-2012 at 10:07 GMT

In a first, a Thai food major is taking its operations across the Indian Ocean to Africa, hoping to capitalise both on available resources and rising consumption in the region.

Thai President Foods Plc (TPF), the producer of Mama instant noodles, announced this week that it would set up a joint-venture factory to expand its business in Ghana to serve the domestic and West African regional market.

The company saw market potential in the region after the high sales of Mama Noodles, which it had been shipping to the region via another distributor, said Pipat Paniengvate, chief executive officer at TPF.

Another indication on the market’s potential came when TPF was hired by another company to produce instant noodles for Ghana early in 2012.

“Thai President would be the first Thai instant noodle manufacturer to set up a factory in Ghana. There is strong potential there, but the country is far away and the import tariff is high, so setting up a factory in Ghana is in line with our international market strategy,” he said.

Will set up JV

Pipat said that it is currently negotiating with a Ghanaian partner, a spaghetti producer and a distributor of food products. If a deal is signed, TPF would invest US$95m to set a noodle production facility.

FoodNavigator-Asia contacted the company over the identity of the partner, but the spokesperson declined, citing ongoing discussions.

Ghana will be the fourth country outside Thailand to have a Mama Noodles factory after Myanmar, Cambodia and Bangladesh. The company’s most recent foray was into Bangladesh, where a joint-venture plant will open in August.

According to TPF investor data, Mama exports are valued at 1.63 billion baht or 16% of the company's total forecast sales of 11 billion baht this year, up around 10% from last year. Sales of Mama noodles rose by 11% year-on-year over the first four months of this year as well.

Myanmar calling

Pipat also revealed that the company planned to expand production capacity in Myanmar with a new factory in a new industrial estate in the country.

“We'll use Myanmar as a production base to export to Europe over the long term,” he said, adding that it will also invest 400m baht on expanding its factory in Chon Buri as well as a new wheat flour factory in Rayong province.

The new wheat factory will be operated by a new company called President Flour Mill Co., a joint venture between TPF Holdings (60%), President Bakery (10%) and its partner Kerry Flour Mills Ltd. with (30%).

The new wheat flourmill is expected to start operating in next year's third quarter with annual production capacity of 300 tonnes exclusively for Mama noodles, the company said.