Thailand's Useful Food, one of the country's largest snack producers, has revised its regional growth plan by focusing on Southeast Asia rather than the whole of Asia.
Known for its Paprika and Cornae brand chips, the company is looking at closing its factory in China, once regarded as a stepping-stone to an extensive market base for overseas expansion.
Prateep Pusayapaibul, the deputy managing director, said the company was mulling whether to close down the plant, built seven years ago in Guangzhou at a cost of 100 million bath (€2.6m), or find potential investors in Useful Food (Gwangzhu) after its Hong Kong and Japanese partners withdrew their 40 per cent stake in the firm.
"We face many problems with distribution channels and the demand for biscuits and bread is larger than for snacks," Prateep said.
Competition in China was fierce because several makers had entered the market. However, next year the company would expand its business in other countries bordering Thailand, he said.
In doing so, it would change its strategy by exporting Thai-made snacks rather than building factories in new markets. It planned to appoint distributors in Burma, Malaysia and Singapore where its products have been sold for years.
This year, the company would step up its presence in the domestic market after losing the leadership to PepsiCo's Frito-Lay brand. Useful Food's share of the country's snack market, which totalled more than nine billion baht last year, shrank to 10 per cent from 20 per cent in 1996.
Prateep said the company's sales last year were worth about 900 million baht, about the same as the year before. This year its sales were projected to grow by 10 to 15 per cent to one billion baht, the pre-recession level.