Thailand

WHEN the joint venture to form CP-Meiji in Thailand was sealed in 1990, two giants were shaking hands. Meiji Dairies Corporation is Japan's biggest producer in this sector, active in all segments of the white and the yellow lines, with a strong focus on exports. On the Thai side, Charoen Pokphan Group (CP) is the nation's largest animal feed producer and one of the world's biggest fowl exporters, supplying 60% of the Chinese chicken market, for example. And that's not all. The privately owned company, employing more than 500,000 people in Thailand, also has stakes in the 7-Eleven retailing chain operating in Thailand and China, in the Tesco Lotus chain of supermarkets and in the British telecommunications company Orange. The shareholdings in the retailing chains, in particular, make it easier for the group to launch its own food products on the market. The CP-Meiji joint venture has built ice cream factories in Indonesia and China, and established a sales network for CP-Meiji ice cream in Taiwan, Singapore and Hong Kong. From Thailand, CP-Meiji exports milk, yogurt and yogurt drinks into neighboring countries on a large scale. In Thailand itself, CP-Meiji is the market leader in the segment of pasteurized milk in the cold chain ?which shouldn抰 be taken for granted in Thailand, where milk consumption can only look back on a short history. It was no less an institution than Thailand's royal house, still highly revered by its subjects, that triggered it about 40 years ago, when the DPO (Dairy Promotion Organization of Thailand), a Thai-Danish initiative, established a domestic dairy industry. Smallholdings were able to buy special dairy cows bred to cope with the prevailing tropical conditions but still yield relatively limited amounts of around 15 to 18 liters a day, which are collected by cooperative centers. CP-Meiji's Saraburi production facility around 120 km to the north of Bangkok, for example, purchases the milk from cooperatives of autonomous farmers located in a radius of 200 km in Central Thailand. It receives about 200 tons of raw milk per day, processing it with the appropriate ingredients for an output totaling around 300 tons of dairy products. One ton of raw milk is the minimum amount received per collection center, with a tanker-truck holding a maximum of 15 tons, meaning that up to 20 trucks a day will be arriving at the dairy. Higher value creation Pasteurized milk did not achieve widespread dissemination until the early 1990s, when CP-Meiji offered the first-ever pasteurized milk in Thailand. Up to then, there had been next to no cold chain for the distribution of pasteurized milk; all of it was supplied as UHT milk. Even today, consumers are still very much used to the 250-ml cartons. A one-liter bottle is way too big in the view of most Thais; the demand is for smaller units. Nowadays, the UHT milk market is saturated, and being served primarily by the two big producers, subsidiaries of Dutch and Danish dairies respectively. CP-Meiji, as the third-largest player on the market, therefore took a deliberate decision at the end of 2006 to withdraw from this market and discontinue the production of milk in cartons. It chose instead to upgrade its presence in the market for high-quality, pasteurized milk with an extended shelf-life (ESL), a market at present growing steadily by around 7% a year. Venturing into virgin territory at its Saraburi facility, CP-Meiji installed two milk filler BLOCs from Krones, each featuring a VPGW weighing filler and a Variojet triple-channel rinser ?the first ESL milk bottling line in Asia to feature Krones?weighing fillers. CP-Meiji commissioned the two lines in two stages. The first Krones line commissioned in 2006, rated at 18,000 bph, fill seven different types of milk and flavors into 450-ml and 830-ml HDPE bottles and optionally 2000-ml HDPE bottles. These include fresh milk, skimmed milkNike Magista Obra Low