South Korean confectionery company SPC Samlip said Monday it has signed an agreement with Siam Makro, an affiliate of Thailand’s largest conglomerate CP Group, to make a foray into the Thai bakery market.

This is the first time that the Korean firm has teamed up with a local company for overseas operations. Under the agreement, the two companies will set up a joint venture for both production and distribution of bakery products in Thailand and push for other related projects together.

Siam Makro, the operator of Makro warehouse-type markets and Lotus large supermarket chain across Thailand, posted about 17.6 trillion won ($13.5 billion) in sales last year. The company also operates 10 Makro stores in Cambodia, India, China, and Myanmar as well as other premium food and retail businesses in Asia overall.

SPC Samlip plans to operate bakeries within Siam Makro retail stores nationwide, producing and distributing bakery products locally by taking advantage of its distribution channels in Thailand and other Southeast Asian countries. It will also share its business know-how with the Thai partner.

In addition, SPC Samlip said it will extend cooperation with CP Group to cover digital innovation in the biotechnology and IT sectors, including its own microbial fermentation food technology that has been accumulated for decades.

"Through this agreement, we plan to further expand our business in the Southeast Asian market," an SPC Samlip official said. "Based on our competence in leading the domestic bakery market, we will promote the excellence of Korean bakeries in the Thai market."