3. Industrial Situation and Competition
         Industrial Situation
         The  products  of  frozen  fruits  and  vegetables are new line 
products which are  different  from the dry and canned products etc. The 
products of frozen fruits  and  vegetables maintain freshness, cleaness, 
original tastes without improvement, natural  colours  without mixing of 
any chemical.  Therefore, they  are  not  dangerous  to  the  consumers.  
The frozen manufacture process keeps  the frozen fruits  and  vegetables 
fresh and available throughout of the year even out of season time.
         Japan is  the  biggest consumer of frozen fruits and vegetables 
of not less  than 500,000  tons per year.    In 1999, the  Company  only 
exported  the  frozen  fruits  and  vegetables to Japan in the amount of 
17,700 tons.  But due to the  continuous  sluggish of  Japan economy, so
in 2000 the company policy of sale  volume  will be  decreased from last
year in which sale target will be at 16,000 - 17,000 MT.   

         Key success factors
         The key  factors  that contribute to the success of the company
are: the  partners  who  qualified  in  every  aspect,  i.e.,  they  are 
experienced  in  doing  fruit  and  vegetable  business  for  10  years; 
sufficient   funds  and appropriate production   technology.   The  Most 
important is they are capable in marketing and have sufficient markets.

         Opportunities
         Since  most  Thai  people  are  engaged in  agriculture and the 
company  exports  frozen agricultural products, it is a good opportunity 
for the company to help  incuring  income to the farmers and good affect
to the country economic.   Thai agricultural products bear low costs and 
they do not need many imported raw materials.The import of raw materials 
is not  more  than 5 %  of  the  sales  volume.  Agricultural  products, 
therefore,have an advantage in competing with other  products,especially 
when the Baht is buoyant. The agricultural  business is still a business 
which  makes  good  profits.   The  company  believes  that it is a good 
opportunity to expand the business for growth in the future.

         Obstacles
         The  company  may  face  trade  protection  particularly by the 
European markets.  Moreover, the  fact that the  company's  products are 
not entitled to the General  System of Preference makes it difficult for
the company to compete with the  products in those  countries.  However,
the  company tries  to  reduce  its  production  costs and maintain high
quality products. Furthermore, the company is in the process of applying
for ISO 9002 to gain more competitive edges.

        External factors affecting the industry and the company at
        present and in the near future
        Factors which may affect the industry using agricultural produce
and the  company at present and in the near future are natural disasters 
such  as  the  Elnino  phenomenon   which  cause  weather  vagaries  and 
unseasonal rains as well as the"green house effects"  which may vary the 
temperatures and they,in turn,affect the growth of agricultural produce.  
Moreover, agricultural produce may be affected by typhoon  phenomenon in 
the solar and they may threaten the ecological system.

         Size, growth trend and industrial development
         The  markets  for  food products are huge because everyone must
consume to keep up life. Therefore, the food industry has  opportunities 
to grow  extensively  especially,  quality  and  nutritious  products in 
particular.  This is due to the fact that, at present, people  are well-
informed in choosing  the  most  nutritious food to prolong their lives.  
The company's products are foods with high nutritious values,  and  they  
are popular among the consumers especially the Japanese consumers.  This  
makes  the  company grow steadily.  However, the company has not relaxed 
and has tried to improve the quality of its products.  The  company  has  
also added new  products   such as  frozen baby corn, frozen sweet corn,  
frozen durian and frozen potato etc.  In addition, the  company  has co-
invested with the Taiwanese investors in producing frozen  vegetables in 
China for export.  The factory has a production capacity  of  5,000 tons 
per year.  The company  produces  new  products    such as  Taro,  Gobo,  
Broccoli  and Cauliflower etc.  to  offer  new  choices to the customers 
and create more competitive edges.

         Market share
         The company  is a major  exporter of frozen Green Beans and Soy
Beans with an export volume of not less than  70 % of the total exported
frozen Green Beans and Soy Beans. The Company exported volume for frozen 
fruits and vegetables products is only 3-4 % of Japan demanded volume.

         Probable challenges from new competitors
         The company is fortunate to  have  good investment partners who
have strong customer bases especially Itochu  Corporation, the company's
investment partner is a large  business  organization  with  a worldwide
network.Itochu Corporation is well-equipped in many aspects particularly
in providing  the  company  with  extermely useful data which is used in 
setting the company's marketing policies.    Therefore,  it would not be 
easy for new competitors to enter the existing markets and  particularly
to establish  new  markets and  make  their  products  acceptable to the
customers.  Whereas, the company's products are readily saleable because
there  already  are  purchase  orders.   In addition, the quality of the 
company's products is up to the standards because the Taiwanese partners
have assisted the company in the production process.

         Product substitutes
         Fresh  and  seasonal  vegetables  and fruits as well as canned, 
oven-dried  vegetables  and  fruits  may  substitute  for  the company's 
products.

         Bargaining power of the buyers and sellers
         The  quality  of  the  company's products are acceptable to the 
consumers on the grounds that they are fresh,delicious,healthy,regularly
delivered and the prices are competitive.    The company, therefore, has 
high bargaining power,in particular, the Japanese and Taiwanese partners
give the  Thai  executives  autonomy  and they do not interfere with the
administration ,  management  and  setting  sales  prices  by  the  Thai 
executives.

         The company's competition status
         Domestic Competitors
         As for domestic competitors, the company is the country's major
exporter  of  Green  Beans  and Soy Beans with not less than 70 % of the
total export volume of Green Beans and Soy  Beans.   The company has two 
important  competitors :   Lanna  Agroindustrial  with  an   approximate 
production  capacity of 3,000  tons  per year  and  Union  Frost with an 
approximate  production  capacity of  3,000  tons  per  year  while  the 
company's  annual  production  capacity  is  27,000  tons per year.  The 
domestic  market  for  frozen  fruits  and  vegetables is  still  new as  
vegetables and fruits  in Thailand are abundant and cheap all year round 
whereas frozen fruits  and vegetables are more expensive.   However, the 
company initiated domestic sales in 1996  through  its distributor, P.P. 
Foods Supply Co.,Ltd., with market targets on department stores, hotels,  
Japanese restaurants which emphasis on groups of middle-class  customers 
upwards  and  businessmen  demanding  semi-instant  products  which  are 
hygienic and convenient for consumption.

         Overseas Competitors
         The  important  competitors  are  China  and  Taiwan especially 
China  which  possesses   the  present  extreme  low labour  cost.  This 
allows China to sell the  products at  very low prices. The disadvantage 
of the Chinese products  is their inferior  quality  when  compared with 
Thai products.  At present, Taiwan implements the  machinery  harvesting 
technology  in  place  of  labour  harvesting to  decrease  a lot of the 
production costs and produce quality  products.   However,  the said two 
countries are disadvantage on  the natural  disasters  which often occur  
which  creates  the  irregular  productions  while Thailand seldom faces 
with this problem. Moreover,the planting may be made  almost  throughout 
of the year in Thailand.  Therefore,  Thailand is able  to  continuously 
supply the customers with the products.
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