Investment, Research Shape Thailand’s Food Industry

In January 2012, Food Technology Associate Editor Karen Nachay attended a food industry media tour in Thailand sponsored by the Thailand Board of Investment (BOI). The trip included visits to food research and product development facilities in Bangkok and in the eastern seaboard region of the country.

The agricultural industry and agriculture exports are quite important to Thailand’s economy. Approximately 40% of the country’s labor force is employed in agriculture, according to the U.S. Dept. of State. Food exports contribute significantly to the country’s economic bottom line, with food exports expected to reach US$30 billion this year (about 28% of total GDP) and exceed US$33 billion within the next two years, reports the BOI. The country is the largest exporter of rice (9 million tons in 2010) and a top exporter of sugar, seafood, canned tuna, canned pineapple, and cassava. The processed food manufacturers in the country make up about 15% of the national manufacturing output and 52% of total food exports. The bulk of these commodities, ingredients, and processed food products are shipped to the United States, Japan, China, Indonesia, and the UK.

Thailand has also become increasingly attractive to foreign investment, particularly by companies that locate processing, manufacturing, and research facilities to areas around the country designated by the government as industrial estates. Food companies like Dole Food Co. Inc., Unilever, Mead Johnson Nutrition Co., Coca-Cola, Kraft Foods, Kellogg’s, and others have a presence in Thailand, often established through joint ventures and subsidiaries. Nestlé, which has several manufacturing plants in the country, announced in 2011 plans to expand two of its food manufacturing facilities as well as to construct a new quality assurance center. Cargill, through its Cargill Meats Thailand, is expanding its integrated poultry processing operations through additions to existing buildings and the construction of a feed mill.

Part of the food industry media tour included a visit to the Jelly Belly Candy Co. (Thailand) Ltd. manufacturing and office facility in Rayong. Open since 2006, the facility is the company’s first located outside the U.S., where it has three, two of which are manufacturing facilities. While these two plants process confectionery for sale in the U.S. and Canada, the plant in Thailand produces 136 flavors of the company’s signature product, Jelly Belly, for markets around the world. Demand for Jelly Belly products is up and the 50,000-sq-ft facility is unable to keep up with demand so plans are underway to construct an addition to the existing plant, said Herman G. Rowland, Jr., the managing director of the facility. Eventually, Sunkist Fruit Gems and sugar-free Jelly Belly will also be manufactured at the plant. Rowland was fairly candid in his discussion of the experience in Thailand, saying that the location has allowed the company to grow marketshare overseas and save in labor costs but that the cost of purchasing sugar is quite high, something that candy manufacturers in the U.S. experience.

In addition to being home to various food manufacturing facilities, Thailand also features food research centers that focus on research and development, food safety and quality, and biotechnology. One such facility is the Institute of Food Research and Product Development (IFRPD) at Kasetsart University in Bangkok, where scientists conduct research and development related to food chemistry, engineering and processing, nutrition, quality assurance, and safety, and focus on transfer technology by working with food manufacturers around the world to develop commercialized products. The research work is varied and includes formulating nutritious food supplements for Thai infants, investigating the use of different protein sources for use in food products, investigating extruded protein products based on different sources like soybean, determining shelf life of foods, and more.

Not only do the scientists collaborate with each other and with food manufacturers, they work with government employees to formulate products using foods and ingredients from regions across the country. This helps to strengthen local communities so those living there have their own unique product to sell, explained Sornprach Thanisawanyangkura, Vice President for Research, IFRPD, and an associate professor, Kasetsart University. Offices established by the Thai government in every region around the country provide support and services to local farmers and businesses. The IFRPD receives “seed money” from the government to develop projects with the local communities but eventually it must fund the projects on its own, said Thanisawanyangkura. Some of the products include dried and preserved fresh water fish, banana chips, fermented mango, and various dried fruits. Since much of the country is poor or developing and rural, the sales of these products help support local economies.

Finally, the agriculture and foods division of the National Science and Technology Development Agency (NSTDA) located in Pathumthani plays a role in food research and development, particularly in the area of biotechnology and food safety and risk assessment. With such work as developing flood-tolerant rice (important to a flood-prone country like Thailand), improving the technologies to produce modified tapioca starch and tapioca products, and analyzing fermentation and starter culture technology, the NSTDA is also increasing the competitiveness of the Thai food industry to help the country grow its economy through a strong agricultural sector, said Morakot Tanticharoen, Senior Advisor to the NSTDA President. More importantly, she said, is that Thailand wants to be more than just an agricultural product producer; it wants to invest more in research and development to better the food industry by adding value to agricultural products, forming collaborative research projects with companies from around the world, and improving the safety of ingredients and food products.

Karen Nachay
Associate Editor
([email protected])