Thai President Foods Plc, the producer of Mama instant noodles, is set to invest an additional 300 million baht to double production in Hungary.
Pun Paniangvait, manager of the president's office, said Thailand's instant noodle market is estimated at 20 billion baht a year and has experienced moderate growth in the first half of this year. In terms of volume, it expanded only by 1-2%, while its value increased by 5-7%.
With this outlook, the company has shifted its focus to the international market. It intends to increase the registered capital of Thai President Hungary, its subsidiary, to 600 million baht, from 300 million baht. The new capital will be mainly used to install new machinery and establish a new factory.
"Our instant noodles are more acceptable to European customers compared with more than a decade ago," said Mr Pun. "Based on this outlook, the company is set to expand its business in Europe."
Thai President Foods is designing its new Mama instant noodle facility in Hungary, with construction expected to commence next year.
The company initiated its foray into Hungary a decade ago and currently operates two production lines in its Hungarian factory, with four shifts in operation.
Once the new facility in Hungary is operational, all Mama instant noodles that were previously exported from Thailand will be replaced by production from the Hungarian factory.
The company exports two instant noodle brands to the European market. The Thai Chef brand caters to the German market, while the Mama brand serves the Finnish market.
According to Mr Pun, the European market contributes 20-25% of the company's total revenue from instant noodles.
The company expects this figure to increase to 40% within the next two years.
"Greater expansion of our instant noodles overseas will boost our net profit, helping offset a sharp drop in profit in the domestic market," Mr Pun said.
In addition to Hungary, Thai President Foods is actively seeking new business partners in Africa. The company began selling its instant noodles in Africa during the pandemic.
"There is a significant market potential with consumers from 14 African countries," Mr Pun said. "Although the African market is quite tough, we remain optimistic due to the familiarity of local customers with consuming instant noodles."
He said Thai President Foods is seeking partners in Africa to have a production base there.
Additionally, the company plans to expand its distribution network through retail chains that target Western customers. Previously, its instant noodles primarily targeted Asean customers and were sold mainly in supermarkets.
The company also intends to reignite its expansion in the Vietnamese market, where the company has scaled down its investment since 1999.
With these strategies in place, Thai President Foods expects to achieve 5-6% revenue growth from the previous year's figure of 27.2 billion baht. This growth will be driven by sales of instant noodles, both domestically and abroad, as well as the bakery and bread segments.
