If you live outside of east Asia, you may never have heard of Thai Wah. But wherever you are in the world, chances are you’ve eaten, or cooked with, one of its products.
The Bangkok-based company claims to be the world leader in the production of food-grade tapioca — the starch extracted from cassava roots that’s a staple food for millions of people in the tropics — with ‘Rose Brand‘ as its most recognized product line. Tapioca is also widely used as a thickening agent for other food products, and in modified form in everything from aquatic animal feed, mosquito repellent, and metal casting.
Thai Wah’s other major business is noodles. It says it makes over 27,000 tonnes each year, manufactured from tapioca, pea starch, potato starch, and rice. In addition to holding the largest market share in Thailand and much of the rest of Southeast Asia, the company exports its noodle and starch products to key markets like China, Japan, Taiwan, and the US.
AFN recently caught up with Ho Ren Hua, CEO at Thai Wah, in the run up to his appearance as a panellist at next month’s 2020 Asia-Pacific Agri-Food Innovation Summit. He’ll be participating in a session on building food security in Asia Pacific in the aftermath of Covid-19, where he’ll be sharing the (virtual) stage with Syngenta‘s regional director Alexander Berkovskiy, ADM‘s regional president Leo Liu, and renowned consumer business strategist Ireena Vittal. (You can register for the 100% online event here.)
Thai Wah experienced a “challenging” 2019 according to Ho. Thailand, the company’s main production center and supply source, was hit with an outbreak of cassava mosaic virus, as well as drought and significant appreciation in the value of the local currency, making exports more expensive.
And that’s before Covid-19 came along. By the look of things, 2020 is likely to prove an even tougher year for Thai Wah. But even before the pandemic hit, the 70-year old company was increasingly implementing tech-based solutions to drive efficiency and sustainability in its traditional agrifood manufacturing business.
This includes working with its supplier farmers to pilot technologies like drones and satellite imaging, to help them reduce risk and improve yields. Thai Wah is also developing biopower plants that can convert byproducts from its farming and manufacturing activity into usable energy.
Read on to hear more from Ho on how Thai Wah is embracing tech in the midst of Covid-19.
AFN: What has been the most significant impact of Covid-19 on Thai Wah and its business?
Ho Ren Hua: By far the most important thing has been taking care of our people. We have close to 3,000 employees across Southeast Asia in our manufacturing and food business. On March 22 [when Bangkok implemented a partial lockdown] we went very intensely for 100 days — until July, when things more or less stabilized in Southeast Asia — checking the health and hygiene [daily] of our workers. They’re distributed across the region, in different villages, different provinces – we made sure they had enough supplies and we did contract chasing.
For our factory staff, the was probably that first month of significant adjustment, with lots of standing around and queueing to take temperatures, making sure they are socially distanced [on the factory floor] and splitting shifts differently to avoid contact.
For our office staff — including R&D — the first two months were chaos. We moved on from that, nearly everything went online. But the interesting thing is that, at least for Thai Wah, by May things were a lot more smooth because people [became] hyper-focused with regards to managing time. People were planning shorter meetings. Often in Bangkok the traffic is a mess, so staff staying at home meant less time spent commuting; those coming in to the office saw reduced traveling times.
The second major challenge was from the supply chain, and seeing different responses from different markets in terms of economic recovery. China opened faster, so more of our tapioca was heading to China – but some some of our important countries and regions are still under partial lockdown, such as Jakarta, the Philippines, and much of Europe. In the US some [of our business] has recovered.
Following on from that, what changes has the company made to its business in response to Covid-19? Do you see these changes as long-term and lasting?
For our internal culture, the change has been positive in terms of flexibility. We should never take for granted that this Covid-19 pandemic is personal in its impact. People have had different struggles – with travel, family, commuting. It has had a very big macroeconomic impact, but we are mindful everyone responds differently as an individual. Understanding that and being flexible is very important. For example, today 80% of our meetings are physical, face-to-face meetings where possible, but just to give the flexibility to dial-in virtually is psychologically very important. I think that will continue.
That change is not just internal, it’s for the wider ecosystem. With effective virtual conferences, you can do a lot over a one-hour call with Vietnam or China or Jakarta. So when you used to travel for two days just to have a two-hour lunch meeting – people are now saying, ‘Can we achieve those goals with a one or two-hour virtual conference?’
Food is a very operational, people-focused business. Tech companies can work remotely, but half their team are engineers. Agrifood is very human business — people still want to see each other, taste new products, visit sites and talk about supply chain and farm development — and that will remain, even after Covid-19. But overall I see a lot more increased understanding around that kind of flexibility.
What are some of the cutting-edge technologies and solutions that Thai Wah has developed to help make its business more sustainable?
Our core vision is to develop innovation and sustainability from farm to shelf. Innovation becomes an enabler across the entire value chain – so at different points of the value chain, we embrace the use of tech. One example is, for a lot of our farmers, we pioneered digital payments – so now our farmers, instead of [handling] cash which can be messy, can get paid into their account or digital wallet within 30 seconds. We are also working with one of the leading startups here on geomapping, using satellite imagery to work out new outcomes for farmers.
At the production level, there are many different types of tech – engineering, manufacturing, food science. Within that you’ve got fermentation, enzymatic treatment. There is just so much to do and so much to explore.
Finally, the third segment is consumer-focused, digital tech. Here, we’ve made some significant progress. Ultimately we see tech as an enabler for our vision, and use of tech as one of highest priorities. Of course, it has to be human-centered – not tech for tech’s sake.
What are the agrifood industry’s priorities for innovation and tech investment, in your view? How should agrifood companies approach innovation and working with startups?
First of all, companies need to develop an innovation agenda. As I mentioned, our core agenda is innovation and sustainability from farm to shop.
In actual terms, we [at Thai Wah] do it at two levels. For innovation, we are a big believer in partnerships. At any one time we’re working with multiple startups. Those are very concise, agile innovation projects, usually for specific timeframe – typically for a number of months.
Then we’ve got R&D, [which is] typically longer term – not three months or six months, but rather it could be three years, five years. We do combination of internal and external R&D. At Chulalongkorn University we have team too, so while we’re building a very significant internal R&D capability, we’re also working with external partners.
In terms of investing, what we found one of the most meaningful [ways to partner with startups] is through revenue-sharing contracts or co-development contracts rather than by directly investing for equity. At this point we’re not looking to start a corporate venture capital fund. I think it can be a pretty good idea, however – but the administration and effectiveness [of such a fund] really depends on each company’s DNA. Our preference is to work with startups on a practical and meaningful basis to help them scale, to really work with them much more operationally. If they’re upstream, we’ll buy their products; if they’re downstream, we can be their supplier.
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