May 30, 2012

Thailand - Novel SME programme targets higher AEC exports

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Project helps firms improve marketing

Tariffs no longer pose much of an obstacle for Thai small and medium-sized enterprises (SMEs) wanting to export to other Asean countries, but impediments remain in the form of foreign regulations, local culture and consumer behaviour.

For this reason, the "SME Ton Kla to Goal" project has been designed to help entrepreneurs improve their marketing, specifically those exporting food, beverages and crafts.

The programme, which is free of charge, is aimed at helping participants sharpen business plans and revamp packaging designs to improve sales in the Asean region, said Jirapaphan Malithong, director of the International Trade Promotion Department's Office of SME Support Solutions.

The department has developed the programme in cooperation with Thammasat University's Research and Consultancy Institute.

Some 3 million Thai SMEs are involved in exports, last year accounting for 2 trillion baht in export revenue or 30% of the total value of Thai exports.

Exports to other Asean countries have been growing, both in terms of volume and as a proportion of overall exports.

Last year, exports to Asean markets totalled 1.64 trillion baht or 24% of total exports.

With the help of academics and specialists, the Ton Kla to Goal project selects a handful of SMEs to attend intensive workshops about Asean Economic Community (AEC) import procedures.

The experts then provide individual companies with market analysis and help them plan their marketing strategies and develop packaging.

"Experts will give advice such as how to make their packaging more appealing to consumers in particular countries _ for instance, advising which colours would do well in Malaysia," said Ms Jirapaphan.

The third stage involves business field trips in Thailand and abroad. Then development prototypes are showcased at trade fair, such as the recent Thaifex _ World of Food Asia held at Impact Muang Thong Thani.

The programme began last year, and prototypes were showcased this past February. More than 100 SMEs applied.

"What makes this project different from other government-sponsored ones is we don't help SMEs develop their products from scratch but instead require companies to have already developed their products to some extent. We then help them with their marketing strategies and product matching in the real market," said Ms Jirapaphan.

This fiscal year, 55 SMEs will be selected, with the number increasing to 150 companies next year.

"SMEs don't usually have very clear business strategies when it comes to exports. We have been lucky to join the programme, as it means we're not alone in our endeavour," said Thitiwat Sirapantukul, the business development and marketing manager for Nithi Foods Co.

Nithi Foods makes fried-rice seasonings and was among the 20 SMEs selected in the first year.

Exports to Myanmar, China, Singapore and Japan account for less than 5% of the company's total sales.

"We hope this initiative will help us increase our exports to be equal to or more than domestic sales in the near future," said Mr Thitiwat.

Monthon Sattanon, general manager of The Waffle Supply Co, said the project was a helpful first step for SMEs preparing for the AEC in 2015.

The company has 200 kiosk franchisees in Thailand, and talks are being held to enter Singapore, the Philippines, Vietnam and Malaysia.



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