K&U Enterprise sees potential growth in E.U. An interview
with president of the company, Tetsuo Matsumoto
December 17, 2007
K&U Enterprise was established in May, 2005 with registered
capital of 120 million baht. The Union Frozen Products, who
is a leading fishing company in Thailand with has 13 vessels,
and Kyokuyo, the third largest seafood firm in Japan, each
share 50% of total stock. Tetsuo Matsumoto, president of the
company sees the company is approaching its annual sales of
1.5 billion baht this year and sets the next year`s target
to 1.8 billion baht, as a result of surging demand in E.U.
Suisan Times: Will you explore new markets globally?
President: Tetsuo Matsumoto
Testuo Matsumoto: Our company
is focused on value-added products, and as a result, 75 to
85 % of the products are for Japan exports. The North America,
EU and Australia are other major markets.
When we look at markets regionally, Japan faces undue competition
and severe resistance from retailers. Therefore, it is unlikely
we can raise prices although fuel and raw material prices
are on the rise, which results in skinnier profits. All things
considered, the makeup of Japan will shrink in the future.
The U.S. exports are restrained thanks to the subprime mortgage
crisis and weaker dollar to baht. Our business to supply frozen
sushi to Walmart has ended. Instead, we are selling frozen
sushi to a Canadian supermarket chain, Loblaws.
We believe we can expect potential growth in E.U. Our main
target is Germany, where demand is constantly increasing.
If business there becomes active, we can automatically explore
neighboring countries, such as Austria, Belgium and Switzerland.
Kyokuyo`s newly opened office in Amsterdam will enable us
to open up new business opportunities. We are working on developing
new sushi items using tomato and cheese to draw new customers.
We also consider India and the Middle East countries as new
ST: What about Thai market?
TM: We are mainly selling chilled products
in Thailand. Although volume is small, it is steadily growing
and we are sure of boosting sales. On domestic market, products
are marketed under Prantalay brand. Union Frozen Products`s
subsidiary, Prantalay, is launching a new premium quality
sushi brand "I LOVE SUSHI by Prantalay" aiming to
penetrate high-end consumers.
ST: Approach to eco-labeled products seems to becoming
more important to enter into new markets, especially EU.
TM: We have cleared IFS and BRC. IFS evaluates
companies supplying retailer food branded products, including
traceability from origin to table. BRC, British Retail Consortium,
is known as the safest standards in U.K. and we are proud
that our food safety and environmental management is strict
and thorough. So far, we have never received requests of eco-labeled
ST: What`s the baht appreciation affecting your business?
TM: Our operation for the
Japanese market has fallen 15% after August due to the impact
of the rising baht. Currency fluctuation leaves shrimp farmers
to take up the slack. Unalterably, it is causing harsh consequences.
ST: People say rising labor cost is eroding competitiveness
against other Asian rivals.
TM: Thai`s technical capabilities can`t
be simply compared to its labor cost. Our staff is 100% Thai
and we doubt cheaper labor from Burma. If you judge comprehensively,
including ambidexterity, royalty to company and religious
matters, I believe gaining ground in Thailand was a wise decision.
Kyokuyo and Union Frozen Products have long history of business
relationship of 25 years and we have a foundation of sharing
the same values.
However, increasing labor cost causes serious concern. Minimum
daily wage in Bangkok is 194 baht and will be up another three
baht next year.
If left untreated, 100 workers quit and we hire another 100
on a monthly basis
ST: What do you think if you look back on the past
year and a half after the company was established?
TM: I am amazed that we`ve made it this
far. This is my honest feeling. The biggest challenge I faced
is communication. I realized how it is difficult to convey
significance of production management and technologies. It
was also challenging to have Thai staff develop a deeper understanding
of Japanese way of business and views.
Our number one future task is to seek even safer food, though
nothing bad has happened to us. The second step is strength
of marketing to expand markets in Japan, the U.S. and EU.
As a global company we would also like to put a focus on human
resources development, as well.
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