Laos’ Coffee Giant Eyes Thailand For Expansion

Dao-Heuang Group, a leading coffee producer in Laos, is set to enter Thailand next year via a contract to grow coffee on a 1,000-rai plot of land in the North.

This move is part of the company’s plan to boost its production capacity to meet rising demands once the Asean Economic Community (AEC) is launched in 2015, the group’s vice president Boonheuang Litdang said at a press conference yesterday.

“We will be growing coffee in Thailand in order to serve rising demand in Asean countries,” she said.

The group, which is a member of the Laos PDR Coffee Federation, will also partner up with the Singapore Coffee Federation and other similar associations to set up an Asean Coffee Federation in the next two months. This is part of a move to promote coffee products produced in Asean to the global market, Boonheuang added.

She went on to say that the group was also planning to invest Bt20 million on a coffee-roasting plant in Ubon Ratchathani’s Warin Chamrap district this year. This comes after the group recorded sale of coffee products worth US$20 million or Bt600 million in Thailand last year.

The group is also planning to open its first shop called the Tea Room by Dao Coffee in May to boost its growth in the Thai coffee market with the aim of achieving sales worth $40 million by 2018.

Meanwhile, Dao-Heuang’s production base in Thailand should cover demand in the region and is part of the group’s plan to meet 20-30 per cent growth on a yearly basis, Boonheuang said.

The group is also planning to open its first duty-free shop in Vietnam next year worth Bt10 million, she added.

Dao-Heuang’s aim is to double its revenue growth target from $160 million this year to $320 million by 2018. Up to 80 per cent of the group’s total revenue comes from its coffee business, and the rest from its other businesses such as duty free, hotel, retail and property business in Laos. Of its total revenue in the coffee business, 80 per cent comes from export.

The company exports coffee to Japan, the United States, Europe, China, Vietnam, Myanmar and Cambodia.

Separately, the group is also planning to spend $3 million on a 10-hectare coffee-drying yard in Laos this year, after it spent $100 million to build a coffee plant there last year.

With these expansion moves, Dao-Heuang hopes to be listed in the Laos Security Exchange in the next three years, she said.

Dao-Heuang Group, considered to be one of the largest firms in Laos, has a hand in retail, real estate, consumer products and hotel industries. The group, established in 1991 by Dr Hao Litdan and his wife Leuang, has also set up joint ventures and distributorships in other countries such as Thailand, Vietnam, Myanmar, China, Cambodia, and Japan.

In Thailand, the group has signed a joint venture with Sum By Dee Co Ltd, which imports Dao coffee from Laos and has also opened an outlet in Thanya Shopping Park on Srinakarin Road. The company is planning to open a tea room in Siam Square One next month.

Source: The Nation