TISCO Securities views Nestlé’s investment of more than THB 6.4 billion in Thailand as positive for the country’s pet food industry, with no immediate threat to contract manufacturers ITC and AAI. The brokerage maintained its Buy recommendations on ITC, AAI and BTG with a target price of THB 22.70, 4.80, and 23.50 per share respectively, keeping ITC as its sector top pick.
Thailand’s Board of Investment (BOI) approved investment promotion for Nestlé’s expansion at Amata City Rayong. The investment comprises approximately THB 4.5 billion for pet food production and THB 1.93 billion for pet treats.
More than 90% of output will be exported to markets including the United States, Canada, Japan, Australia and New Zealand, under major brands such as Felix, Pro Plan, Friskies and Purina One. The projects will use more than THB 450 million in locally sourced raw materials annually.
TISCO said the investment reflects global brand owners’ confidence in Thailand as a production and export base. According to the brokerage’s overview, Thailand’s domestic pet food market was worth approximately $1.8 billion in 2025, with a five-year compound annual growth rate of 12.6%. Thailand also ranked as the world’s second-largest pet food exporter in 2025, with exports valued at $2.9 billion.
Despite the capacity expansion, TISCO does not see an immediate competitive threat to ITC and AAI. Nestlé manufactures in-house for its own brands, while ITC and AAI operate as original equipment manufacturers (OEMs) for major global brands, supported by longstanding commercial relationships and joint product development with customers.
ITC is expected to face the least impact, given its scale as a major OEM, research and development capabilities, and larger customer base spanning multiple regions. AAI faces comparatively greater competitive exposure because of its smaller size and high reliance on OEM operations.
BTG could benefit from market growth and export expansion, although pet food remains a small part of its overall business.
TISCO said Nestlé’s investment does not change its fundamental view of the covered companies. However, the brokerage will closely monitor direct and indirect competition, alongside new entrants to the industry.
TISCO has also upgraded the pet food sector rating from “Neutral” to “Overweight.”
