Thai food giant in deal with Sri Lankan food major

By Ankush Chibber

- Last updated on GMT

Related tags Sri lanka

Thailand food company S. Khonkaen Foods Plc has signed a deal with Sri Lanka-based Keells Food Products Plc to distribute food products on the island, with further expansion plans mooted.

Keells Food Products Plc, a subsidiary of John Keells Holdings, has committed to building a new facility with Khonkaen that would manufacture goods for the Indian market.

Keells will distribute Khonkaen products on the island including Thai-style sausage and dried shredded pork.

“Khonkaen products would be retailed in Sri Lanka through the Keells supermarket chain, which is also part of the John Keells Holdings Group,”​ a spokesperson for Keells told FoodNavigator-Asia

Of the factory he said, “No specific plans have been made.”

“A feasibility study is still to be done over this and it would take some time before concrete plans are firmed up.”

Sri Lanka is fast becoming a hub for companies serving the Indian food market. In September, Dabur India announced that it would invest US$15m in a new beverage manufacturing plant near Colombo to cater to the rising demand for fruit-based beverages in India.

Dabur India CEO Sunil Duggal told FoodNavigator-Asia that the venture made business sense in view of the Free Trade Agreement between the two countries.

“The other big reason for establishing base in Sri Lanka was to service the South Indian markets, a region that we have not been addressing effectively,”​ he said. Sri Lanka is to the south of India, and this puts the new plant closer to Southeast Asia.

Khonkaen is not restricting itself to Sri Lanka however. According to local newspaper the Bangkok Post​, the food giant has plans to expand globally with an investment budget of 80m to 130m baht (US$2m to US$4.2m).

Apart from Sri Lanka, the company plans to expand production in Poland, where it is hiring a factory to produce Chinese pork sausage, sour pork and moo yor (a Thai mortadella) to supply Eastern European markets, the report said.

Calls to Khonkaen by FoodNavigator-Asia went unanswered.

Related topics Business South East Asia Supply chain

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