Thai-Korean joint
venture in plastic food storage containers:
Synergies to be achieved in manufacturing and distribution
By Jon Fernquest
Hanacobi is the leading plastic container
manufacturer in South Korea.
Hanacobi produces a line of plastic containers for storing food under the Lock & Lock brand name.
These are the sort of plastic containers used to store leftovers in the refrigerator or to take your lunch to work with you.
Customer satisfaction with the product has a lot to do with the tightness of the seal. If the seal is not tight enough, then the food will not store well. If the seal is too tight, then container is difficult to open and close.
A very tight seal is necessary to prevent the contents inside from being spilled and to prevent air and dirt from entering the container. If air enters the container, the food inside can spoil.
The tightness of the seal varies with temperature. During the summer lids become loose. Food spoils and spills more easily. Stored in a refrigerator, the lid of a container becomes tight and difficult to remove.
Better product design was needed to overcome these problems and make the containers more effective and easier to use for food storage. This is exactly what Hanacobi has done with their new Lock & Lock brand.
Growth of plastic container distributorship in Thailand
Lock & Lock is an established brand sold through distributors in more than 100 countries.
In the past, Srithai Superware, one of Thailand's largest plastic-product makers, has imported Lock & Lock products manufactured in South Korea and China and then distributed them locally.
The business has grown quickly in Thailand, expected to reach 100 million baht in sales this year and double that next year.
Thai-Korean Joint venture
To work more closely together in manufacturing and distributing the product in Thailand, Srithai and Hanacobi have forged a joint venture recently. The partnership will be named Srithai Lock & Lock with Srithai holding a 51% stake in the company and the Korean partner the remaining 49%.
Both companies have manufacturing facilities. On the marketing side of the business Hanacobi will take responsibility for new product development as well as the marketing and promotion of existing products. Srithai will take care of the distribution of the product in Thailand.
Both Hanacobi and Srithai have factories in Vietnam. Operating together certain synergies can be achieved. Srithai's factory has plastic injection manufacturing capability. Hanacobi will be able to use the supply of plastic products manufactured in Srithai's factory and avoid a costly separate investment in this technology.
When Srithai begins to import some models of Lock & Lock plastic containers from Vietnam instead of Korea, the duty that it has to pay will fall from 20% (Korea) to 5% (Vietnam). Thailand and Vietnam are both in ASEAN which as lower tariff rates. This should make Lock & Lock containers a cheaper and more attractive product for consumers in Thailand.
Other new investments are planned under the joint venture:
Yesterday, Srithai opened its second flagship Lock & Lock store on the third floor at The Esplanade shopping complex on Ratchadaphisek Road. A third outlet is planned by year-end in the Siam Square area.Though the current economic situation is poor, Mr Sanan said he was going ahead with expanding the business locally by spending about 800 million baht on new investments. About 500 million baht will be spent on producing PET bottle and related products at the Chon Buri factory and the remaining 300 million will be spent on install new robotic machinery at the factory in Nakhon Ratchasima.
Also, a new production system will be installed in order to reduce its production cost by 70%. Additionally, the company plans to open its first flagship store for melamine products next year.
Srithai's sales of plastic containers and products made from melamine are projected to increase 8% this year (to 5.04 billion baht). Next year sales are expected to double.
About 74% of sales will be domestic and 26% exports.
(Source #1:
Bangkok Post, 03-09-08, PITSINEE JITPLEECHEEP, temp-link)
(Source #2: Lock & Lock product information,
link)
Vocabulary:
a line of, a
product line of - a group of related products made by a
company that are marketed and sold together กลุ่มผลิตภัณฑ์ประเภทเดียวกัน
a line of plastic containers ภาชนะชนิดต่างๆ
ที่ใช้บรรจุอาหารที่ทำจากพลาสติก
leftovers
- food that remains from dinner or lunch (to be eaten later) อาหารเหลือ
อาหารที่ทานไม่หมดในแต่ละมื้อ
customer satisfaction - how well the products and
services of a company meet or surpass customer expectation, a key
performance indicator within business (See Wikipedia)
ความพอใจของผู้บริโภค
the seal on a
container - the part of a container that keeps the container
closed and prevents air from getting in or how well
air is prevented from getting into the container
ฉลากหรือที่ปิดภาชนะบรรจุ
seal a container - closing a container tightly so
that no air gets in ปิดภาชนะบรรจุ
tightness of the seal ความแน่นหนาในการปิดภาชนะบรรจุ
food spoils - when food becomes no longer fit to eat
(because it has been exposed to the air, not refirgerated, or is too
old) อาหารเน่าเสีย
more effective
- works better and more efficiently อย่างมีประสิทธิภาำพขึ้น
distribute a product - deliver the product from the
factory to the store and customer จัดจำหน่ายสินค้า
forged - made หลอม ทำขึ้น
a joint venture,
a partnership - a business owned and operated by two other
businesses working together การลงทุนร่วม
a stake
- owning part of a company
holding a 51% stake in the company - owning 51% of
the company มีหุ้น 51% ในบริษัท
new product development - คิดค้นผลิตภัณฑ์ใหม่ๆ
synergies
- when working together leads to greater success than working
separately (See glossary)
การร่วมมือกัน
synergies can be achieved
plastic injection - (See Wikipedia on moulding
and injection
moulding)
a duty, a tariff
- a tax on imported goods อากร
a PET bottle - a type of plastic used in
food and drink containers (See Wikipedia and an article on recycling
PET plastic bottles)
ขวดเพท (ขวดใส) ที่ใช้บรรจุน้ำดื่มที่ขายกันตามท้องตลาด
melamine, melamine resin - a hard plastic used in
kitchen utensils, plates, flooring, and inexpensive furniture (See Wikipedia) วัสดุที่เรียกว่า เมลานิน
มีลักษณะคล้ายพลาสติก มีความทนทาน ใช้ทำภาชนะต่างๆ