Doi Chaang Original Coffee Co, the founder of the Doi Chaang premium coffee brand, will form joint ventures with local businesses in Romania and India to expand its coffee business in the near future.
Advisory chairman Phitsanuchai Kaewphichai said the company will use Romania as its springboard to expand its Doi Chaang coffee business into Europe. It is negotiating with businesses spanning the European market to distribute Doi Chaang roasted coffee via their retail channels.
The company is considering two options for its European-expansion push.
The first is creating a joint venture with a Romanian coffee roaster to set up a facility in Romania. The Romanian coffee roaster used to be a partner of Doi Chaang in Thailand, providing technicians and handling repairs of coffee machines in the country.
If the first option is not feasible, the company will hire an original equipment manufacturer in Romania to produce Doi Chaang roasted coffee. Doi Chaang will then market and sell it to independent coffee houses and retail outlets.
It expects to use 400-500 tonnes of green bean coffee in Romania.
Romania is attractive for investment because the import tax on coffee is not high. Also, being an EU member, the country can be used as a springboard to expand its business throughout the European market.
"Opportunities for Doi Chaang roasted coffee in the European market are huge because of its high levels of coffee consumption. Doi Chaang is also one of the coffee brands in Thailand that has received Geographical Indication (GI) protection from the EU, making it well-known and accepted by European customers," Mr Phitsanuchai said.
The company is also negotiating with a potential Indian partner in the coffee trading business to open a Doi Chaang coffee house in India.
"A small number of people drink coffee in India, but we found more and more are visiting Western coffee chains," he said.
The import tax for green beans and roasted coffee in India, however, remains a significant trade barrier. Standing at 100%, it is the highest such import duty in the world.
Mr Phitsanuchai said negotiations with the potential Indian partner were under way.
The company is still considering a proper business model for Doi Chaang coffee in the country, with a deal expected to be finalised by the end of the year.
The first Doi Chaang premium coffee house will be opened in Bengaluru next year, as it boosts the highest number of coffee drinkers of any city in India.
Mr Phitsanuchai said the company recently opened its first Doi Chaang coffee house in Cambodia, which is operated by a Cambodian franchisee.
It has 40 Doi Chaang branches operated as franchises, with 14 in Malaysia, 10 in South Korea, two in Singapore, and one each in Myanmar, Laos and Cambodia.
In Thailand it has franchised 30 outlets. The company expects that number to grow to 80 by year-end.
Doi Chaang projects its outlets at home and abroad to reach 600 by 2024.