Thaifoods Group to invest billions in expansion and new retail outlets

Thaifoods Group Plc (TFG), a leading chicken and pig producer in Thailand, has announced plans to invest between 3 billion and 3.5 billion baht in expanding its business this year, with a particular focus on opening new retail outlets.

Chief Operating Officer Phet Nantavisai stated that 2 billion baht of the investment will be allocated to the expansion of the company’s retail business, aiming to open 180 new branches of Thaifoods Fresh Market. This move is expected to bring the total number of TFG’s retail outlets to 400 by the end of the year.

Each new shop will cover a 300 square metre area, requiring an investment of 8-10 million baht and employing 10-12 staff members. The majority of the new outlets will be located in the northeastern, central, and lower northern regions of Thailand, where the market is currently less competitive. TFG’s retail shops offer a variety of products, including chicken, pork, seasoning products, frozen food, and ready-to-eat and ready-to-cook meals at affordable prices.

The remaining 1-1.5 billion baht of the investment will be used to improve TFG’s existing feed mills and expand through the establishment of new feed mills. Additionally, the funds will be applied to extend the company’s breeder pig farms in the central region, covering provinces such as Chai Nat, Nakhon Sawan, and Phichit. The investment budget will also include strengthening the pig supply chain and supporting its feed mill operations in Vietnam.

Phet Nantavisai highlighted the risks that high product prices, volatile raw material prices, and unstable distribution channels pose to the livestock business. TFG tackled these challenges by launching two Thaifoods shops in Ayutthaya province in 2020. This move aimed to strengthen its supply chain, reduce production costs, and sustain sales, profit and distribution channels.

Before 2020, the chicken business contributed to 40-50% of TFG’s sales, while pork sales attributed 20-30%. The remaining 20-40% was generated by sales from other products. However, as the Covid-19 pandemic affected both the export and HoReCa (hotel, restaurant, and catering) sectors, the company shifted its focus to opening more retail outlets.

TFG’s retail business has now become an important component of the company’s revenue, with an expected sales contribution of up to 20% this year, or around 12 billion baht in value. This is an increase from the 15% ratio in the previous year, which was worth 7.8 billion baht.

Phet Nantavisai described Thaifoods Fresh Market as the company’s new S-curve business unit, which enables TFG to transition from a production-driven to a market-driven company. It is anticipated that there will be 1,000 Thaifoods Fresh Market shops by 2026, with the retail business expected to boost revenue contributions to 30-40% in the future.

In the first quarter of this year, TFG saw a 31% increase in its revenue, reaching 13.8 billion baht. This growth was driven by rising demand for chicken, meat, and sales from retail shops due to the recovering tourism and economy.

TFG’s total sales revenue amounted to 52.3 billion baht in 2022. Of this figure, 23.3 billion baht was generated from poultry, 12.5 billion from swine, 8.53 billion from feed mills, 7.8 billion from retail stores, and 234 million from other areas, reports Bangkok Post.