CP'S NEW FACILITY GIVES RICE PRIDE OF PLACE

       CP Trading Group plans to establish a Bt3.5-billion rice processing and trading facility in Ayutthaya province to ensure "single-standard quality" and facilitate future expansion.
       Set to be complete next year, the centre will be located on about 550 rai and will include the group's third rice processing and packing plant, with a total capacity of 1.08 million tonnes. Rice will be directly shipped from a river port nearby and an inland container depot.
       CP Trading's head office will be moved to the location from Bangkok, but a Bangkok office will be maintained as a business coordination unit. Started in 2007, the project is aimed at positioning the rice trade as the firm's core business.
       Prasit Damrongchietanon, chief executive officer of CP Trading Group, said completion of the project will boost the group's rice production capacity to 2.5 million tonnes.
       The firm already has two processing facilities in Ayutthaya and Pathum Thani and three rice mills in Buri Ram, Kamphaeng Phet and Suphan Buri.
       Prasit said the group's total rice trade volume is forecast to reach 1 million tonnes this year, with exports and domestic sales contributing 50 per cent each.
       "CP Group has focused on rice, developing the necessary fundamentals to ensure this business milestone is reached and strengthening the group's competitiveness," Prasit said.
       CP Trading Group manages its rice trading through CP Intertrade, its marketing arm, and markets the rice under the Royal Umbrella brand. The brand is ranked as the country's fifth-biggest export product, with total volume of 600,000 tonnes worth Bt9 billion shipped last year. However, this is forecast to drop to 500,000 tonnes, worth Bt8.5 billion, this year in line with the slowdown in the country's overall rice exports.
       Sumeth Laomoraphorn, president of CP Intertrade, said the company exported 265,591 tonnes of rice worth Bt6.3 billion during the first seven months of this year.
       The company's domestic rice sales are projected to reach 530,000 tonnes worth Bt11.8 billion this year. Its total sales reached 287,644 tonnes of rice worth Bt7.15 billion in the first eight months.
       The Kingdom's total rice exports are expected to reach 8.5 million to 8.7 million tonnes this year.
       Prasit said CP Trading Group has had to prepare a new rice-business plan to cope with increased competition from both existing traders and newcomers. However, the business still has room for growth in the areas of bagged rice and value-added rice products, he said.
       The tougher competition, however, will have a positive impact on the industry, Prasit said, as it will force traders to improve the quality of their rice and to develop new marketing strategies. The rapid expansion of modern-trade channels in Thailand has been a key factor in the switch to bagged rice, which has become popular among consumers, he said.
       The rice business is now managed
       by a young generation of highly
       educated executives who have em-braced modern-trade models to boost
       sales, Prasit said. This has not only widened market opportunities but
       also led to rapid changes in trading
       patterns, as well as business diversification.
       "The Kingdom's major rice exporters are not the established traders of old, but newcomers formed by small local rice traders and millers," Prasit said, noting, however, that quality is still the most important factor.
       Prasit said CP Trading Group is considering looking for business partners to launch new rice products. This strategy, he said, will support the group's goal of achieving complete upstream-through-downstream production.
       The company is also considering a plan to list on the Stock Exchange of Thailand, he said.