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Nature of Business

Group of companies’s products are categorized into 6 product groups as follows :

1. Processed Pork (Traditional Thai Foods)

2. Processed Seafood (Seafood Balls)

3. Meat-Base-Snack

4. Ready-To-Eat (RTE) Meals and Ready-To-Heat (RTH) Frozen Foods

5. Quick Service Restaurants (QSR)

6. Swine Farm

Nature of Products

1. Processed Park (Thaditianal Thai Foods)

Processed pork products or “Traditional Thai Foods” is one of the Company’s core businesses with 43% in total sales contribution. They are the first traditional product since the company has started commercially. Processed pork is manufactured in two main factories: Bangplee and Nakhon Pathom. SORKON and SKKF are supervised in marketing and distribution in which SKKF is taken care of marketing and distribution in wet market domestically. While SORKON is responsible for marketing and distribution among other channel such as retail business, convenience stores, upcountry dealer, direct sale agent, and for international dealer: Hong Kong and Macau.

Products under this category comprised of Shredded Pork, Crispy Pork, Chinese Sausages, Thai Sausages, Fermented Sausages, Vietnamese Sausages, Pork Balls, and etc which marketed under the Company’s own brands, namely “S.Khonkaen”, “Moo Dee”, “Moo Hoar”, “Huay Kaew”, “Baan Phai”, “3 Rien Thong”, “Moo Champ” and “Settri”.

2. Processed Seafood

Processed seafood is another company’s core business with 34% sales contribution operated by the company’s subsidiary, MFP. SORKON and SKKF are responsible for marketing and distribution. To be specific, SKKF is responsible for domestic wet market while SORKON is a distributor in other channels such as retail chains, convenience stores, upcountry dealer, and for international market through authorized dealer in US, EU, UK, Japan, Korea, and Hong Kong. The total domestic sales is 90% and 10% for international sales respectively.

The processed seafood include fish balls, shrimp balls, and squid balls which are manufactured in various qualities to penetrate high-end and low-end markets. The company’s processed seafood products are house brand and OEM. The products under the Company’s own brands are “Chiu Chow”, “Kwang Chow”, “Yaowarat”, “ODeng”, “Mahachai”, “Kowloon”, “KaiZen”, “Heng Heng”, “Hong Kong”, and “Taipei”.

Dipping sauces and chilli pastes (counted as processed seafood because of their ingredients and manufactures at MFP) are under brand “Thai Derm” and “Thai Niyom”. SORKON is responsible for marketing and distribution in modern trade while SKKF is taking care in wet market. The sale of dipping sauces and chilli paste are only 4% sales contribution in processed seafood category.

In 2012, the Company invested in purchasing around 24 Rai of land near Mahachai factory to support the factory extension acquiring approximately 348 million baht (land included) to increase manufacture’s capacity of fish ball and seafood-base-snack that has Halal standard to be exported to Muslim countries. By extending the factory, it is expected to increase manufacture capacity to 15,000 tons per year more than the previous 9,000 ton per year. It is expected to start manufacture in second quarter of 2015.

3. Meat-Base-Snack

Meat-Base-Snack manufactured at Bangplee factory operated by SORKON. SORKON appointed DKSH Company Limited as a distributor of Meat-Base-Snack comprised of Bar-B-Q crispy pork, roasted pork, roasted chicken, Bar-B-Q crispy fried pork, pork-rind and star shaped crisp rice which are produced under the company’s own brands, “Entrée”, “Moochi”, and “The Star”. At present the products are mainly sold domestically while 7% are exported to Hong Kong and Macau.

This year, the company is at 80% in process of building a new factory for chicken and sea-base-snack to be exported to Muslim’s market.

4. Ready-To-Eat (RTE) Meals and Ready-To-Heat (RTH) Frozen Foods

Ready-To-Eat (RTE) Meals and Ready-To-Heat (RTH) frozen foods are produced by another factory of SORKON located in Samut Sakhon Industrial Estate. The factory was bought from Narai Interfood Company Limited in 2009. The company’s products consist of frozen meat and desserts under the OEM. The company has a policy to change its production focusing on producing products under its brands. At the end 2013, the company launched “Yunnan” pork leg stew available at Tops Supermarket. Moreover, the factory producing Ready-To-Eat (RTE) Meals and Ready-To-Heat (RTH) frozen foods is a central kitchen that prepares foods to be sold to QSR restaurants under the brands “Zaap Express” and “Yunnan”.

5. Quick Service Restaurants (QSR)

The company started operating Quick Service Restaurants in 2010 under the brand “Zaap Express” using most of the company’s products as ingredients in various menus. The first restaurant was opened by utilizing the spaces in front of the Bangplee factory as a pilot restaurant. At the end of 2015, there were 6 Zaap Express restaurants in operation: Bangplee, Aree, Silom, All Season Bldg., Soho and Emquartier.

The pilot Yunnan restaurant was launched at Bangchak Gas Station (Bangna-Trad Km 4.5) in April 2013. At first, the company focused on launching at gas station so by the end of 2013 the company had 4 Yunnan restaurants. The reason of operating more branches is that the company foresees that pork leg stew with rice and soup is one of Thai favorite dish and has a large market. Combining the company’s expertise, secret recipe from Yunnan (Republic of China), healthy menu (non-fat), and stable taste, the company believes that “Yunnan by S. Khonkhaen” will create brand awareness more profoundly. Every branch operates successfully with some branches excel the other. By the end of 2014, “Yunnan” has already established 20 outlets across Thailand.

In terms of QSR business in 2015, the company has expanded another 12 restaurants making Yunnan restaurant from 25branches to 37 branches. The company also signed a franchise contract with Cambodia in order to open Yunnan restaurant. Cambodia is the second country in ASEAN after Laos where Yunnan restaurant is available. Zaap Express was changed its image and name to “Zaap Classic” employing QSR professionals to create and control work standard and to expand branches as expected.

6. Swine Farm and Distribution

Since the major raw materials of the company’s products are pork meat, the main purposes of backward integrating into its own swine farm are to reduce risk of materials’ price fluctuation enabling the company to maintain cost effectiveness and to mitigate the risk from material shortage.

The swine farm is located in Nakhon Ratchasima Province by using artificial insemination to reproduce swine to farmers. Moreover, the Company offers fattening piglets to farmers and full grown fattening swine to slaughterhouse as well.