“We are adjusting our strategy to cope with obstacles or uncontrollable factors that may occur in the future,” said NSL president Somchai Asavapiyanond.
SET-listed NSL Foods, a manufacturer and distributor of bakery items, snacks and ready-to-eat meals, is ramping up its food service, snack and distribution arms as well as food in retort pouches to sustain long-term growth and reduce risks from the prolonged pandemic.
Somchai Asavapiyanond, the company’s president, said NSL wants to raise the sales proportion of the new businesses to contribute about 30% of total sales in five years from 6% now.
The bakery business makes up 94% of the company’s total sales.
“We are adjusting our strategy to cope with obstacles or uncontrollable factors that may occur in the future, and sustain our business growth in the long term,” said Mr Somchai.
“Food is necessary for life, but we were affected by the pandemic more than expected and sales in the third quarter this year are likely to slightly miss the target because of a slower recovery in consumer spending power.”
He said NSL’s business plans were delayed because of government lockdown measures, resulting in limited time to sell its products and fewer foreign tourists.
The company chose to delay the market launch of new frozen food products being developed through a collaboration with Kasetsart University until the fourth quarter this year after the university temporarily closed for two months, said Mr Somchai.
The company is also scheduled to launch biscuits and Hong Kong-style rice porridge to the market in the fourth quarter, targeting kids and the elderly.
The market for rice porridge in Thailand is worth about 1 billion baht and still has room for growth, he said.
“Despite broader vaccination coverage, we are concerned the pandemic will persist if we reopen the country next month,” Mr Somchai said.
“The company needs to look for new businesses for new sources of income. We are scheduled to start distributing fermented fish sauce via traditional trade channels next month and are in talks with some small businesses to distribute our products. We also plan to hire original equipment manufacturers to produce NSL products.”
He said business collaboration plays a significant role in the Thai market during the pandemic, allowing the sharing of best business practices and exchange of customer bases.
The distribution business should be one of the company’s strong pillars in the future, said Mr Somchai.
In a related development, he said NSL plans to install a new machine at its factory in Chon Buri in November this year to produce food in retort pouches for sale in Thailand in 2022.
The company is talking with Chinese partners about selling popular Thai foods in retort pouches in Shanghai and Shenzhen, hoping to become a springboard for other Chinese cities, said Mr Somchai.
NSL reported total revenues of 1.56 billion baht in the first six months this year, a 9.8% increase over the same period last year, with net profit rising 98.9% to 123 million baht.
“With the uncertainty of the pandemic, our sales this year are likely to stay on par with last year’s level at 2.92 billion baht,” he said.Internet Explorer Channel Network