Danone Dairy (Thailand) has already spent 350 million baht revamping flooded yoghurt factory in Rojana Industrial Park
Revamped Danone pushes yoghurt culture in Thailand
Published in the Bangkok Post: 20/07/2012 at 02:06 AM
Eight months after closing its Ayutthaya factory amid the massive flooding, Danone, the world’s largest yoghurt firm, is spending almost 1 billion baht to revive the business.
Some 350 million baht has already gone towards revamping the entire manufacturing process for the group’s yoghurt factory in Rojana Industrial Park.
The factory restarted operations on June 15 with heightened annual capacity of 25,000 tonnes of dairy products.
“Even though we closed our factory for eight months, our Activia brand has been found to remain very high in consumers’ minds. With such support, we’re strongly committed to continuing our investment here,” said Laurent Boissier, the general manager of Danone Dairy (Thailand) Co, the maker of Activia yoghurt.
He said annual capacity could easily be doubled, taking little more than a year for adjustment at a cost of only 15 million (584 million baht).
Output serves both the domestic market and exports to neighboring countries including Laos and Cambodia.
Mr Boissier said per capita consumption of yoghurt in Thailand is 4.5 kilogrammes _ expected to rise to 6 kg by 2015 _ compared with 35 kg in France 12 kg in South Korea and eight kg in Japan.
Danone sees huge potential for the Activia brand in Thailand, where the yoghurt market has become more dynamic since the floods and forecast to grow by 10% this year.
The fastest growing segments are cup and pasteurised yoghurt.
At present, Thailand’s yoghurt market is worth an estimated 12 billion baht including the 4-billion-baht cup segment, which enjoys 15% growth annual growth.
Before the flooding, the Activia brand commanded an 18% share of the cup yoghurt segment.
The factory closure cost Danone an estimated 400 million baht in lost sales.
After restarting operations last month, new packaging was introduced in addition to new products.
Thailand is only the third country after Spain and China to use the new packaging.
Product formulas have also been adjusted to suit Thai tastes better.
“We’re confident our business will return to pre-flood levels within six months and that we can achieve a 20% share of the cup yoghurt segment by year-end,” said Mr Boissier.
A joint venture has been set up with Berli Jucker Plc, the trading firm owned by the whiskey tycoon Charoen Sirivadhanabhakdi, called BJC Danone Dairy, with Danone owning 49%.
Danone is in charge of marketing activities, product innovation and plant management, while Berli Jucker distributes the products including via home delivery.