Boonsithi Chokwatana is the Chairman of Saha Group, Thailand’s leading consumer products conglomerate. This is part 13 of a 30-part series.
As Thailand’s economy took off in the 1960s and 1970s, lifestyles rapidly modernized. Changes also emerged in people’s dietary preferences, offering us new business opportunities. We formed many tie-ups with Japanese companies handling bread, snack foods, seasonings, beverages and so on.
But it was a Taiwanese company that spurred us to enter the food business after we worked with them on instant noodles.
The manager of Bangkok Bank, who often made business trips to Taiwan and was close to my father brought the idea to our attention. “Instant noodles are popular over there,” he told us. “There’s a company that makes them that wants to expand into Thailand.”
In 1972, Thai President Foods (TF), an instant-noodle maker, was established as a joint venture between Taiwan’s President Enterprise Company and Saha Pathanapibul. The factory was built in the Thonburi district, on the west bank of the Chao Phraya River. President Enterprise ran the business, while Saha took care of sales.
We struggled at first. Four other companies, including Ajinomoto, had entered the market ahead of us, but that was not the only issue. At that time, instant noodles cost 4 baht per bag, but a bowl of kuay teaw, a Thai noodle soup, cost 1.5 baht at a street stall.
International politics made things even worse. When U.S. President Richard Nixon visited China in 1972 and began to normalize the U.S.-China relationship, all of Asia was forced to reconsider its policy toward China.
Pressure grew in Thailand to establish diplomatic relations with Beijing, but that would mean a break with Taiwan. Concerned about the risks, President Enterprise said it wanted to withdraw its capital from TF and just provide technical assistance. Thailand and China later established diplomatic relations in 1975.
Saha had to take over management. My father nominated Pipat Paniangvait, who had been with us since the early days of the company. He invested in the company himself and became president in 1973. At the time, he was 34 years old, two years my junior. Now 82, he is still in good health and serving as vice chairman.
The recovery operation began and the first issue was the product’s name. The brand name was originally President, the same name used in Taiwan, but Pipat changed it to “MAMA” at the suggestion of my younger brother, Boonchai, who had just returned from studying marketing in the U.S. The idea was to show that instant noodles, which were ready to eat in three minutes with just hot water, could help mothers through their busy mornings.
We also changed the taste. Instead of the usual pork flavor, we developed Thai-style products like moo sap (spicy minced pork) and tom yam kung (a spicy and sour soup with shrimp).
Since Thais still were not familiar with instant noodles, we launched a massive marketing campaign, traveling all over the country in six trucks for a whole year. The new products were aimed at young consumers. Early in the morning, the trucks would pull up near universities and high schools, serving students food that was fast, convenient and delicious.
Time and competition resolved the problem of the product’s relatively high price. Prices in Thailand had skyrocketed, and a bowl of kuay teaw, previously 1.5 baht, now cost 5 baht. Mama stayed at 4 baht because of competition from Yum Yum and others.
Sales rocketed and after 10 years the company held half the market. MAMA came to be known as the country’s national dish.
As readers know, Momofuku Ando, the founder of Nissin Foods, is credited with developing the world’s first instant noodles in 1958. Nissin and Saha formed their own connection later on. In 1994, we established a joint venture and made Cup Noodles in Thailand. After the Asian currency crisis in 1997, Nissin took a 5% stake in Saha Pathanapibul.
There are many cases where Nissin competes with TF, but this helps increase the size of the market. Our competitive and cooperative relationship continues today.
This column is part of The Nikkei’s “My Personal History” (“Watashi no Rirekisho”) series of autobiographies. The series first appeared in The Nikkei in 1956. Since then, a wide variety of world-changing individuals have written or dictated their life stories for publication.