Sinouk eyes Chinese coffee market

Vientiane Times, 30 Oct 209

Several major coffee distributors in China have expressed interest in
importing Lao coffee after sampling it at the Asean-China Expo in
Nanning , China , this month, according to the owner of Sinouk Coffee.

Mr Sinouk Sisombath made the comments this week after returning from
the annual expo, where he met up with many Chinese coffee
distributors.

He said people he spoke to were very impressed with the flavour of Lao
coffee and wanted to import it, adding that coffee consumption in this
country of 1.3 billion people has been growing rapidly in recent
years.

Mr Sinouk who is also President of the Lao Coffee Association, said
coffee distributors in China found Lao coffee to have a unique taste
and believed top quality products would find a niche in the high-end
coffee market.

He said he had discussed prices with potential importers, adding that
if a purchasing agreement could be reached it would lead to a sharp
rise in the export value of Lao coffee because of the strong demand in
China .

“The Chinese coffee market is growing quickly and will be a major
market in the future if we can penetrate it now. But I'm not sure
whether we can supply enough coffee.”

Although there is potential for Laos to export coffee to China based
on its superior flavour, Mr Sinouk said there was a major challenge.

The cost of transporting coffee from Laos to China would be very high.
High transport costs would raise the price of exported products to an
uncompetitive level.

Vietnam has a large coffee market share in China , supported by large-
scale production and good transport, with ships plying between
Vietnamese and Chinese ports.

“It is very expensive to transport coffee by road from Vientiane to
China ,” Mr Sinouk said, adding that he was considering shipping
coffee to China through Vietnam and Thailand .

Another major challenge, he said, was producing sufficient coffee to
fill containers for one shipment, thereby saving on transport costs.

Since he was unable to solve the transport problem, in the meantime Mr
Sinouk is looking for a good marketing strategy to get Lao coffee into
the Chinese market.

“We have to make the Chinese realise that our product is the best, so
we can sell more coffee at a higher price than other brands,” he said.
But he recognised it would be difficult to introduce the Sinouk brand
into China .

He said he would discuss the matter with Chinese coffee distributors
as they had considerable investment capacity.

At present, Sinouk roasted coffee is sold locally and in Thailand ,
with the company's supplier roasting about 30 tonnes a year.

Lao coffee production capacity is currently below 20,000 tonnes
annually, according to Mr Sinouk.