What are Thai industrialists’ strengths
and weaknesses? What strengths can
be used to enable Thai industries to be
competitive in the world market?
National Council for Peace and Order understood this problem
and used Article 44 of the 2014 interim constitution to solve it.
Under Article 44, the FDA is entitled to appoint specialists, specialist
organizations, state agencies, or private organizations, both local
and international, to be in charge of assessing and analyzing
academic papers, and inspecting enterprises. Such specialist
bodies are allowed to collect application fees, which are used as
remuneration for individuals, organizations, or agencies providing
the services and for payment of operating expenses of plans or
public projects aimed at protecting consumers of health products.
This is a big step to speed up the work of the FDA and help SMES
and Start-ups to sell their products.
One of the strengths of the Thai food industry is the food itself, much
of which is unique and well-known across the world. Besides, big
manufacturers are well equipped with knowledge, technology,
and world-class production skills, and have workforces that are
better trained than those of rival countries. These two advantages
have enabled the Thai food industry to transform raw materials into
products well accepted by consumers. The public sector has also
continually focused on the promotion and development of the
agricultural, processing, and trading sectors.
Under the current circumstances, how
can SMEs strengthen their businesses?
And what are the emerging markets to
which the Thai entrepreneurs should pay
attention?
However, the weak point of the Thai food industry is the lack of
credible evidence to support its claims to quality, and this is due
to inadequate scientific research-based laboratories and modern
manufacturing technologies. Besides, there are limitations for
innovation development since the knowledge of Thai entrepreneurs
is limited to their particular production facilities. In fact, innovation
development requires knowledge from various fields and this
is an extremely significant factor for doing business nowadays.
Efficient processing techniques, supply chain management and
networking among manufacturers, are also important. The last
weakness of the Thai food industry is branding capability, following
the aforementioned limitations.
Currently, SMEs should pay attention to promoting their brands
to consumers. We can see that businesses can hire OEMs to
manufacture products on their behalf. Many of them have
established their presence in the market without owning a factory,
but focusing on promotion and brand recognition. SMEs can
survive only when entrepreneurs profoundly understand marketing
or “Think Globally, Act Globally”, which means that they can
catch up with the overall trend in the world market. They have
to know what they are capable of and how they
position their products. They also have to know
who their customers are, and what they want, and
they have to know how to find the connections to
support their businesses.
To be able to follow the
government’s policy of Driving
Thailand toward the 4.0 era,
how should indust rialists be
prepared?
To survive, entrepreneurs can no longer
manufacture uninteresting mass products. They
have to penetrate niche markets which are
exciting and have specific needs. They have to
clearly define their customer base and make use
of e-commerce to explore branding opportunities.
They need to be aware of how important supply
chain management is. This requires an action plan
to maximize production in all aspects, not only food processing
but also how to make use of and add value to the materials left
over from the production process. You can see this in the structure
chart of herbal food business management in the 4.0 era, which
shows how to maximize benefits from raw materials at every step.
(Exhibit 2) (Details of the chart were thoroughly explained at the
AFB Roadshow’s seminar.) As the involved state agencies do not
realize the importance of the management plan and are only
familiar with their current capacity, manufacturers who wish to
develop their products face shortages of raw materials. Thus, the
involved agencies should improve their working system by focusing
more on technological development and research.
Meanwhile, interesting emerging markets are Asean+6, with CLMV
countries as key markets. Each of them has different features. For
example, Myanmar is rich in natural resources and has many tourists
attraction suitable for product distribution. It also has a low cost of
production while its people appreciate Thai products. Laos and
Cambodia are growing markets where Thai products are popular.
Vietnam is a growing market where Thai products are known for
quality. Additionally, Thailand has the advantage of being able to
easily distribute products to all these markets.
How can the FDA play a role in supporting
Thai entrepreneurs to compete in the
world market?
The government itself also has to realize the importance of supply
chain management by clearly defining the role each agency has
to play. The FDA is now encouraging food factories of small and
medium sizes to install quality assurance systems with Food Safety
Supervisors or FSSs as the people responsible for the entire quality
assurance process, including the return of products with problems.
This would boost trust in Thai products and confidence in the quality
assurance system. Right now, we are in the process of Dr.afting a
law, which is expected to take approximately one year and be
enacted by 2020 as a result of which food entrepreneurs will have to
acquire knowledge on food safety and product quality assurance
to be able to conform to the new regulations. Meanwhile, the FDA
will provide training workshops for entrepreneurs, following the
introduction of the new law.
What the FDA plans to do in the future is to develop Thai food
products and introduce them to the world. To position their
products on premium shelves, entrepreneurs have to apply for
permits from the FDA. Product quality, raw materials, production
processes and nutrition facts will be assessed before products are
certified. This is to lift the standard of Thai products which must
have quality standards and certified raw material percentages.
Dr. Tipvon also said that to make Thai products competitive in the
world market, every concerned party from both the public and
private sectors must work together systematically to design a
structure for the transformation of the country. The private sector,
in particular, should act as the Driving force to help upstream
manufacturers to improve the efficiency of their agricultural
production, while the public sector should encourage universities
At present, there are numerous enterprises, products, and
advertisements that have applied for permits. As a result, the FDA
was unable to handle the application process fast enough to
meet the demands of entrepreneurs. However, the head of the
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