New Agricultural Ideas with Technology

"The problem faced by Thai farmers is that the agricultural sector is entering an aging society, and agricultural products continue to have low value. In the past, Thailand focused mainly on exports but did not emphasize the development of added value for agricultural products seriously."

Thai farmers cannot forget their debts (are weighed down by debts), struggles, and uncertainties about the future. Sometimes, we feel resigned. This is something our country has faced for a long time. In reality, Thailand's agricultural industry has great potential, it’s very large in the region, with a great variety of agricultural products known worldwide.

However... strangely, Thailand cannot improve the quality of life for the majority of its farmers, who are crucial to us, seriously and sustainably. This is different from Japan, which has an Agri-Business mindset, a Sixth-Order Industry concept that has led Japan to success and significantly improved the potential of its farmers.

This is what ignited the Yushi Group diverted our focus from the business of selling goods and services in the industrial sector to developing and processing agricultural products fully in 2016. The goal to elevate agricultural products and the quality of life for Thai farmers.

" Fresh fruits " are products that Thai people of all genders and ages are familiar with and have plenty of raw materials in the agricultural market. " How can we increase the value of Thai fruits? " This was a discussion in the boardroom of executives and company chairmen.

Our business plan has linked agricultural and industrial businesses where we have expertise in both factory operations and modern marketing. By planning the business model before implementation, or what we call "Business Plan & Model Canvas," Yushi chose one main raw material to start the business, focusing on processing and adding value to products before entering the market (Value Add Up).

What we chose was "orange" as the primary material. The reason is that oranges are fruits which can be processed to add significant value. Additionally, we operated the business using the planning system of Japan, which is clear and statistical. According to statistics in 2017, there were more than 99,000 acres of orange plantations in Thailand, mainly in the northern region of the country, which is no small amount!

The reason Thai farmers chose to plant oranges in large numbers is that oranges are fruits that can generate higher profits compared to other agricultural crops, and orange trees have an average lifespan of up to 20 years. This leads to an increase in orange cultivation every year. This indicating that the overall situation in the future of this fruit is definitely a cause for concern, as Thailand's agricultural behavior tends to focus on planting in succession when the price is high, leading to eventual oversupply.

And it's no surprise that in 2018, the average price of oranges was 20 baht per kg, while the cost of cultivation was 10 baht per kg (per seasonal yield). If all the oranges were harvested, farmers would undoubtedly risk significant losses and those who cannot adjust would face problems such as losses, debts, and others. Farmers with long-term strategies and good management may be able to avoid crises, but the situation for this fruit is expected to continue in this manner until at least 2022.

Therefore, this prompted the Yushi Group to process oranges in the form of a production factory, focusing on the full-cycle management process from "beginning, middle, to end," and producing and processing 100% pure orange juice under the product brand " Shinsen by Yushi "

With the Agri-Business concept, which focuses on create complete agricultural products in terms of production, processing, and services, as well as direct access to consumers. This includes connecting agricultural producer networks, leading to the emergence of diverse agricultural businesses.

First, we have started to gather agricultural experts, researchers, and various research works to analyze and process orange products. We have received consultations and cooperation from professors and the Department of Agro-Industrial Agriculture at Kasetsart University (Bang Khen) to control the quality of water sources (farmers and cultivation areas) and select orange varieties. The knowledge gained is that: "In fact, sweet green oranges (Tangerines) are commonly grown throughout all regions of Thailand, but they are called by different names in each region. When oranges are grown at different temperature levels in each area, the resulting oranges will have different colors due to the different temperatures during day and night. Observing sweet green oranges grown in the northern region will have darker skin than those grown in the southern region, hence the different names and different tastes due to the different soils."

Yushi Group has brought agricultural and soil experts to advise farmers on cultivation techniques and directly contract with farmers without intermediaries through Contract Farming, to ensure orange production meets standards and can continuously supply fruit to the factory without farmers being pressured on prices by middlemen or traders. This approach reduces income inequality for farmers while also advising and providing direct consultation to farmers on various techniques to improve production based on agricultural principles.

For example, advising on the timing of harvesting fruits, the best-tasting fruits are usually harvested in December because oranges grow fully after the rainy season and during the winter, which is a period when the trees rest and do not produce new leaves or roots. All nutrients are stored in the oranges, making the fruits harvested at the end of winter have the best taste. Additionally, reducing the use of chemicals and increasing the use of organic agriculture to reduce costs.

If farmers harvest oranges during this period and supply them to the factory, they will have the highest profits. Even factors such as "soil" are crucial, and scientists advise farmers to improve soil quality through various techniques such as proportions of adding lime, soil drying methods, watering techniques, etc. until the soil has suitable properties for orange tree growth and good fruit production.

This is the foundation and first step of the business model of " Yushi "

Once the raw materials (oranges) are obtained, we move on to the "processing" stage or value addition. With cooperation of Management and consultants, we jointly decided to produce "100% pure orange juice" that must be nutritionally valuable, beneficial, and free from any chemical additives.

The group has established a GMP-standard fruit juice production plant on an area of over 10 rai within the company's premises to process oranges and fruits under the name Yushi F&B, utilizing the company's existing knowledge of factory management and expertise in automated and semi-automated systems to support production. Initially (2017), the production capacity is approximately 10,000 - 15,000 bottles per day, employing only a few staff, including machinery specialists, production staff, quality control staff, and food science and technology product developers who constantly monitor the quality of fresh orange juice as it requires precise control of many components both externally and internally to prevent contamination and maintain its short shelf life.

The product undergoes strict temperature control and sterile room processes, as well as stringent cleanliness and some production processes that require high level of control to prevent contamination of foreign substances, including sampling in each production round for traceability and data improvement.

There is no adulteration or addition of dangerous substances such as preservatives, acids, salts, or vitamins. Our fresh orange juice can last more than 10 days, which cannot be achieved with ordinary squeezed orange juice available in the general market (ordinary squeezed orange juice usually lasts about 3-5 days), which is our know-how that makes 100% fresh orange juice possible.

" Shinsen by Yushi " efficiently adds value to ordinary oranges and has received product certification standards from the Food and Drug Administration (FDA) as a quality assurance tool. We’re ready to go with the farmers….

The final and most crucial part, which many farmers or even several entrepreneurs cannot sustain and continue their businesses, is the issue of finding markets, knowledge in product selling, and distribution channels, or the "end of the stream" itself. Managing this part requires a myriad of complex skills and thought processes regarding marketing, product positioning, and capital management in sales operations and others.

Yushi Group has executed the business plan previously mentioned by incorporating online and offline communication technologies. In the online aspect, the focus is on creating awareness branding through various company social media, by defining clear target groups such as professions, age groups, consumption behaviors, purchasing power, etc., and delivering products directly to consumers through these channels (B2C) following the principles of the Sixth–Order Industry in direct consumer access.

As for the offline aspect, Yushi Group has a customer network in department stores and convenience stores resulting from the operation of industrial fans, air ventilation systems, and industrial components for a long time, resulting in a beneficial customer base, connections, and various sales channels beneficial to business operations. These results enable the distribution of new products to existing markets (Increase Product and Services) to be clearly positioned since the project's inception. These steps can be implemented rapidly, and the " Shinsen by Yushi " products can be placed in department stores, convenience stores, restaurants, and general stores (B2B). Continuous orders can be generated within a short period, with an increasing trend year by year. Following this, food products related to agricultural products also emerged, such as lemongrass pandan juice, fresh pineapple juice, and strawberry

This solidifies the business chain of Yushi Group with the management approach of "beginning, middle, and end," leading to increased income growth rates for farmers, processors, and communities compared to single-crop cultivation to sell only one product. Moreover, it has positive implications for job creation in factory and transportation systems as well.