AGROPAGES recently conducted an interview with Mr. Kornkanok Chantakitwattana, the Vice President of Plant Protection Business of CHIA TAI CO., LTD. in Thailand. He introduced us to the development of the agricultural market in Thailand and its main problems. CHIA TAI has had good relations with Chinese pesticide suppliers, and he also looks forward to the future cooperation between the two parties.
Could you introduce Thailand’s agriculture structure and the dynamics of crop protection market?
The major crops in Thailand are rice, sugarcane, cassava, corn, rubber, oil palm and tropical fruit. The bigger crop, in term of planting area, is rice which covers 50% of planting area. Field crop and fruit tree cover 25%.
The core problem of Thailand agribusiness development (both agribusiness and grower) now is understanding the needs of customers along the value chain. There are bottle necks of developing the agriculture in a sustainable manner.
For the crop protection market, the challenges are how to fast develop the product replacement to be able to be in place in the right time. Regarding to strictly control of pesticide by authority, this bring about to misperception of consumers about food such as residue of pesticides. This pressure of misperception is more and more pressed to agribusiness on how to provide the correct understanding to public who may not trust the message released.
In case of the opportunities lies in the market, the new entrances are harder and harder. So that less competitors and agriculture industry will be better developed and monitored among agriculture companies. In the future, agribusinesses have to better understanding the needs along value chain of produce in order to better develop solution to market.
Multinational companies are paying attention to develop the new products both premix and new molecule. In the past 5 years, overall multinational company growth is decline due to less new product introduced to market and unfavorable agriculture environment.
For local company, commonly, they use pricing and focusing strategy either crops or area where they have competitive advantages.
Please introduce your company, your market position and the brand influence in Thailand.
Chia Tai Co., Ltd. has been in the agricultural business since 1921. Chia Tai has become one of the leading agricultural companies in Thailand and continuously expands into the overseas market. We consist of three main businesses: seed business, fertilizer business, and plant protection business. We adhere to product quality and integrity for our partners. We also focus on research and product development, and select only high quality products from the world leading manufacturers for distribution.
Chia Tai have capacity for formulation and repackaging for Insecticide, Herbicide, Fungicide and Plant Nutrient. We keep developing new offering, especially crop implementation, to ensure that our solutions can enhance farmer crop management to be sustainable in order to get produce at optimum yield, good quality and low production cost.
How is the cooperation between Chia Tai and Chinese agrochemical suppliers?
We have cooperated with Chinese pesticide manufactures more than 20 years. We have imported the products from China source 45% from group of pesticides (herbicides, Insecticides, fungicides, fertilizer, and others).As the environment protection policy implemented in China in recent year, this percent declined 15% when we have compared with year 2013.
The main procurement problems that ChiaTai currently encounters include:
Unstable of supplying: ChiaTai has provided plan in advance and the price may not competitive than others.
Container damage from the shipping line: ChiaTai has required the Chinese companies to take photo before stuffing the goods. Most of them have closely cooperate as well.
Now we spend more time to connect with our Chinese supplier to closely follow up price trend in order to have good supply planning so that we have enough quantity at the appropriate cost.
How is your vision of the future development and the partnership between ChiaTai and its Chinese partners?
If the India source can short cut the transit time less than 15 days, they may get advantage from China source because the quality is also well and price is very competitive. So Chinese suppliers have to work closely with customers in the way of arm length relationship to make sure that both sides will work as a solid partnership.
For the future view, the role of middle man, such as dealer or whole shop, will be minimizing. The connectivity between producer and end user will be significant because of power of internet. Regarding to power of internet, Agribusiness as a whole have to have agility at lowest cost or cost controlling effectiveness along the value chain from producers to farmers. Furthermore, consumers and regulation are more and more on health protection concern. The clean and green food is consumer needs. The role of bio products and plant nutrition to promote plant health will be accepted in the agriculture. These products will be growth and the chemical products volume will be maintained of declining.
Ms. Kanokporn Ariyapoolpong
Purchasing Manager for Plant Protection Business of CHIA TAI CO., LTD.
Tel: +66 22338191-9