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EN_Tipco_Annual Report 2014

PAGE 034 / 035 TIPCO FOODS PUBLIC COMPANY LIMITED Changes During The Past Year In 2014, significant decrease in Thai pineapple exported by TIPCO Foods PLC. caused the price of pineapple raw material to jump to the highest level ever recorded by the Thai pineapple industry. Short term impact was positive in terms of motivating some farmers to expand pineapple cultivation, which may in turn result in lower pineapple prices. Nonetheless, domestic pineapple price fluctuations may have detrimental long term effects if buyers decide to shift to other production bases, considering that global economies have remained in doldrums since 2013 while political conflicts in many parts of the world continue to restrain global purchasing power. It is also notewor-thy that raw material price fluctuations pertain only to the Thai pineapple industry. Recognizing Thailand’s narrowing comparative advantage, TIPCO placed the highest priority on achieving a turnaround and ensuring future sustain-ability of Thailand’s pineapple industry. Towards this end, TIPCo initiated a new format of Contract Farming project which focuses on co-operating with and rendering various kinds of support to formers, starting with cultiva-tion techniques through to irrigation system, harvesting, and increasing output per rai. In regard to purchasing price the company will apply the principle of minimum guarantee price per rai to solve the problem of fluctuating farmers’ income. At present about 100 farmers are participating in this pilot project which should be ready for evaluation by year-end 2015 or 2016. Although this long-term project take 3-5 years to complete, TIPCO deems it to be an essen-tial step in achieving sustainability for Thailand’s pineapple industry. Responding to market demand, TIPCO Biotech Co., Ltd. expanded distri-bution outlets for Homsuwan pineapple in 2014, focusing mainly on leading supermarkets and sales agents. Products were sold as either as whole uncut fruits or cut into pieces that are arranged on Homsuwan sticks and packed in bags which bear TIPCO logo. Favorable customer response is attributed to the fact that selling prices are consistent with quality and on par with other pineapple strains. Everyday farm output is dispatched directly to customers’ distribution centers but output still falls short of demand because Homsuwan pineapple is truly a premium pineapple strain. In 2014 proved to be an opportune time for the company to showcase the ability of its plant extract business to generate income and earn profit, the first profitable year since its inception. The company’s factory also passed the Ministry of Industry’s selection criteria and obtained certification for Good Governance in the category of Environmental Protection. TIPCO F&B Co., Ltd. Overall growth of the fruit juice market in 2014 was not outstanding as economic conditions remain in doldrums. Nonetheless, the company’s share of the 100% fruit juice market continues to predominate. As market leader in the category of 100% fruit juice, TIPCO launched a Health Benefit campaign at the beginning of 2104 by inviting consumers to savor “TIPCO 100% orange juice squeezed from real fresh oranges and packed in carton.” The new presenter, “Cain Phu-phume”, urged consumers to focus on healthcare as well as the unique taste and features of TIPCO 100% orange juice which is squeezed directly from real oranges picked from the tree instead of the usual method of blending Concentrate with water. This fully integrated promotion campaign was launched via various media including tele-


EN_Tipco_Annual Report 2014
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