THAI COCONUT OIL MANUFACTURER RIDES RESURGENCE AMONG HEALTHCONSCIOUS TO STRONG EXPORTS

Mistaken as an unhealthy oil for several decades, coconut oil has fought its way back into the hearts of health-conscious consumers as a nutritious food. The price of coconuts has risen from only a few baht each many years ago to a high of 27 baht per nut earlier this year, as a pest outbreak greatly diminished output.

No business is happier than Tropicana Oil Co, a producer of virgin coconut oil and the winner of this year's Prime Minister's Export Award under the OTOP Export Recognition category.

The company started its cold-pressed 100% coconut oil seven years ago by distributing through health-food shops. The market was small in the beginning but output has skyrocketed to 10,000 litres a month once consumers learned more about the properties of the product.

Tropicana Oil anticipates 60 million baht in sales this year from retailing its oil at 550 baht a litre along with several healthcare products using coconut oil as their main ingredient. The company targets 30% growth next year through expansion in both domestic and overseas markets.

Mr. Suradej Ninek, the Company's Managing Director, recalled that the road to success was a bumpy one as it took consumers a while to learn about the benefits of virgin coconut oil. The production process of many coconut oil crushers a decade ago was not well developed, casting doubt on quality. The first group to latch on to Tropicana Oil's product were health-conscious people over 45 who are educated and have purchasing power. Now a younger market is paying attention to coconut oil for beauty care.


Around 70% of sales are from the domestic market, where half consume it and the other half use it for beauty products. He noted the quality of the company's oil offers an advantage over other producers in Asia-Pacific and it will continue to focus on Russia, China and Japan where it has already established distribution networks. However, it will also expand more in Asean, particularly in Vietnam, in order to reap the benefits of the planned single market.

Tropicana Oil invested in getting its factory in Nakhon Pathom certified to meet Good Manufacturing Practice and HACCP standards. It also aims to achieve ISO 22000 guidelines next year.

"Word of mouth helped us survive in the beginning," said the native of the Tapi River Basin in Surat Thani province where coconut has been grown for centuries. Mr. Suradej is convinced coconuts from his hometown are of better quality than other parts of the country due to the fertile soil and brackish water there, so the company is willing to pay to transport about 100,000 coconuts a month from more than 100 planters on 1,000 rai of plantation. "Luckily transport costs are low as trucks that deliver goods to Southern provinces would return empty otherwise, so we get a reduced rate," he said.

Tropicana Oil also sells coconut byproducts, particularly shell that is used in the production of mosquito coils and powdered carbon. The price of coconuts has risen from only a few baht each many years ago to a high of 27 baht earlier this year, as a pest outbreak greatly diminished output. Coconuts are now 16-19 baht each, but may reach 25 baht if some traders stock coconut to manipulate its price.

"A whole coconut can be kept for 45 days after harvest, providing plenty of time to bet on the price," said Mr. Suradej. Mr. Suradej believes that R&D is the key to success in this field, leading his company tosign a 20-year Memorandum of Understanding to help fund students at the Faculty of Pharmacy of Silpakorn University to research how to add value to coconut oil, especially as an ingredient in beauty care and pharmaceuticals.

The Company also works with Rajabhat Nakhon Pathom to hold packaging contests to find the most suitable container for its products. (http://www.bangkokpost.com)