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  • Sectors: Feeding

Case Studies

Wheat Milling Opportunity Assessment in Thailand

The client is a leading agro-business supplying food and industrial raw materials globally.

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Issue

Apart from their rice aggregation-export activities in Thailand for more than 20 years, the client wanted to enter another sector which is Wheat Milling Industry as the demand of wheat flour is expected to grow and would like to capture the opportunity.


Approach

Solidiance conducted an in-depth research and interviews on four dimensions as follows: 1. Market Overview & Value Chain - an assessment of the current, future demand for wheat flour and price levels. In addition, identifying key stakeholders on the value chain and buying behavior. 2. Competitor Analysis - an analysis of wheat flour suppliers on the number of millers, processed volume, capacity & utilization and margin made. 3. Customers/End-Users Analysis - identify main industry segments buying wheat flour to know volume purchased, key buying criteria and value proposition from new miller. 4. Entry Strategies and Barriers - conclusions on opportunities in acquisition/partnership and entry barriers.


Solution

Due to moderate level of attractiveness is seen in this industry, increasing in price pressure from customer side (i.e. sales prices decreasing) and abundant supply of wheat flour from local production, Brownfield investment is recommended over Greenfield investment as this requires lower capital investments, shorter approval time and fewer restrictions. Through this, existing market share, customer base, and reputation are secured by the local miller. In addition, with bread and bakeries being the largest, fastest growing and most profitable customer segment, the partnership with local miller that has the right segment positioning, well renown and present in this segment is recommended to be able to capture this demand in the future. "


Engagement ROI

Capturing the demand of high-end flour (bread and bakeries) segment worth a value of USD 263 million by 2021, and will represent 48% of the total demand in value (USD 548 million by 2021).