SET-listed Thai President Foods Plc (TF), the maker of Mama instant noodles, yesterday signed a joint-venture agreement with Kourakuen Holdings Corporation, a Japanese restaurant chain, to expand together in Thailand.
The joint venture, called President Kourakuen Co, will be set up today with 25 million baht in registered capital to run Kourakuen ramen restaurants in Thailand.
TF will hold a 70% stake in the venture, Kourakuen Holdings will own 14% and the rest will belong to Thai individuals.
TF will look after fresh ramen production, while Kourakuen will handle the retail business.
TF recently bought a fresh ramen factory in Samut Sakhon province from Kourakuen Thailand and will relocate its ramen production line to its factory in Si Racha district of Chon Buri province soon.
President Kourakuen plans to operate 30 Kourakuen restaurants within five years with 540 million baht in sales, said Petch Paniangvait, TF's business development manager.
"The focus of ramen restaurant expansion remains in Bangkok," he said. "There are opportunities as Thai people love Japanese food, especially ramen."
The partnership with Kourakuen aims to riase TF's instant noodle business to a new level.
Tsutae Niida, president of Kourakuen Holdings, said the partnership with TF would help expand its Kourakuen business faster and more efficiently.
Kourakuen entered the Thai market in July 2012 and has two restaurants at Gateway Ekamai in Bangkok and J Park Sriracha in Chon Buri.
"After a review, we found that we should have a local partner," Mr Niida said. "Some of our restaurants did not have good performance and were finally closed."
Thailand is the first international market for Kourakuen. The company also plans to enter the US and Europe.
TF sales in the first five months of the year grew by 5% with net profit up 19%. The company expects sales in 2016 to grow by 5% to more than 10 billion baht.
TF shares closed yesterday on the Stock Exchange of Thailand at 173.5 baht, up 1 baht, in trade worth 189,000 baht.