The flood disaster has had a heavy impact on Kasisuri Co, a leading producer and exporter of rice-bran oil, which is facing business losses of Bt40 million to Bt50 million. It hopes to resume normal operations by next month.
The company plans to build up a stockpile of least one month’s worth both of finished products and raw materials, including packaging and rice bran. The plan is aimed at ensuring timely shipments to prevent further losses.
The company resumed some operations on November 3, but has not yet returned to full capacity. It plans to achieve that as fast as possible to compensate for the loss of a month’s production.
“We lost some customers as they cannot wait any more, and we can’t ship our product because of flood waters. The flood crisis has heavily affected our operational results in October,” said Varapong Supachok, chief operating officer of the company.
Kasisuri’s two plants are in Sing Buri and Ayutthaya provinces. In addition, it has invested Bt200 million to set up a second manufacturing plant in Ayutthaya with capacity of 500 tonnes of oil per month. The company also plans equal investment in another phase of the new plant, but that will be finalised next year.
Varapong said the company’s new plant would increase its total capacity from 1,600 tonnes per month now to 2,100 tonnes next year. Kasisuri aims for monthly capacity of 3,000 tonnes by 2013. Of the company’s total production, 95 per cent is for export.
Rising demand for rice-bran oil and related products has fuelled the company’s growth, which is targeted at 35 per cent to between Bt1.35 billion and Bt1.4 billion this year. Export volume has grown by an average of 30 per cent per year.
Responding to increasing health consciousness among consumers, the company has launched new healthy products, including salad dressing, mayonnaise, spread and cooking-oil spray. These new products have expanded into the New Zealand market.
Kasisuri’s products are exported to 55 countries but the strongest base is in Australia and New Zealand, accounting for 50 per cent of the company’s total exports. Other export markets are the United Kingdom, Italy and Poland, with Canada and the United States the next targeted export markets.
For now, however, the flooding has forced Kasisuri to reduce its production capacity from 90 per cent to 60 per cent.
Another factor that will hit production is the high rice price arising from the government’s pledging policy.
“We fear that the high pledging price will result in speculation and prompt rice millers to keep their stocks for the higher price, causing a supply shortage,” Varapong said.
He said producers of rice-bran oil had faced lower profits since early this year after rice prices began climbing. Consequently, some plants have closed down, not only because of a supply shortage, but because of the high price of raw materials.
Source: The Nation