Issue 26

King Pac has become one of the biggest manufacturers of plastic bags in Asia. Horizon Thailand discovers the secret behind its success.
Sometimes the most direct approach proves to be the most profitable one. Certainly this was the case for King Pac Industrial Co Ltd, part of the King Corporation Group, when it approached the DITP for a recommendation.

“We went to talk to the DITP in London and asked them to issue a letter of recommendation to go to a conference in 2011 with the UK’s National Health Service (NHS)” says Paiboon Jullasaksrisakul the group’s Chief Marketing Officer.

At the conference, delegates were informed that the NHS, which runs state-owned hospitals, needed to cut its budget by £1 billion ($1.5 to $1.6 billion).
“There were about 30 suppliers, mainly from the UK, and the only one from Asia was us,” explains Jullasaksrisakul. “They mentioned at the conference that they had to do direct import from Asia and then everyone looked at us.” Since then, King Pac has become the NHS’s only overseas supplier. “We supply a lot to the NHS; the clinical wares, specimen bags, etc.,” says Jullasaksrisakul.

King Pac started by manufacturing food bags in 1976, initially in partnership with Malaysian and German investors. Then, when their partners retired in 1997, the Jullasaksrisakul family took over 100% ownership. Now, King Pac is one of the largest plastic bag manufacturers in Asia. Its 107,920sqm factory located a couple of hour’s drive from Bangkok, has a production capacity of 100,000 tonnes per annum, or sufficient to fill 400 containers each month.

Jullasaksrisakul has adopted the same direct approach to marketing ever since he joined the family company direct from university in 2006.
“At that time there were 96 customers, 95% of these were importers and distributors,” he says. The only direct customer was Tesco, which was already established in Thailand. “Now we are 100% direct business,” he adds.

“I listed down the potential customers, and I started from the top. So I went to see the distributors in the UK and US. They drove sports cars, they worked 10 to 4, they had a good life. I think it’s not very ethical, they kept the margin very high.”

Now, King Pac has cut out the middle men with their expensive lifestyles, supplying direct to world’s top retailers, Walmart, Carrefour, Tesco and Metro.  “From that day we grew 30% every year [from 2011-13],” Jullasaksrisakul says. According to him, last year the company’s exports totalled $140 million, predominantly to the US, Australia / New Zealand and the EU. Exports constitute 80% of overall business, with the remaining 20% being domestic or intra-ASEAN trade.

Jullasaksrisakul believes that much of the company's success is due to its commitment to the long-term. “We want good partners,” he says. “We are looking for customers that really focus on their consumers.”

Citing as an example companies such as Tesco and Sainsbury’s that visit King Pac’s factory to conduct their own audits, Jullasaksrisakul says ethical considerations play an important role in determining who major retailers choose as their suppliers. “All of them very much focus on ethical [business],” he says. “The difference between us and other producers is that we can invest on the people’s safety. That’s why I have spent hundreds of millions of baht changing production safety for my people.”

Such measures ensure that King Pac steals an advantage over any potential competition. “If I pass they [major retailers] can buy from me, but other people can’t pass because they don’t invest,” he says.    

Words by Mark Bibby Jackson