Tipco to ease back on products in new year

Tipco F&B, a fruit juice and beverage manufacturer that launched 10 products this year, is likely to halve the number in the coming months, shrinking company revenue growth to 10 per cent from 18 per cent this year.

CEO Viwat Limsakdakul said yesterday Tipco had already researched and developed new products, including fruit juices, functional drinks and other new products, but given the poor economic conditions it had no clear plan on launching dates.

"We plan to launch roughly five new products next year. Consumer purchasing power is the important factor to consider," he said. Viwat said this purchasing power had dropped sharply in the last quarter of this year and some fruit-juice market segments had declined in sales.

He quoted from AC Nielsen's research that, so far this year, the premium segment - 100-per-cent fruit juice - had increased by 5 per cent. The medium segment, or 40-per-cent fruit juice, had risen by 20 per cent, while the economy segment, at 25-per-cent fruit juice, was the only segment that showed negative growth, dropping at least 10 per cent from last year.

Total market value of the fruit juice industry is at Bt7.5 billion, of which Bt3.5 billion is in the premium market. The medium market value is around Bt500 million to Bt600 million. The remainder are economy and super-economy segments which are less than 25-per-cent fruit juice.

"Our market share in the premium segment in the second half of this year has increased from 46 to 53 per cent because consumers seem to be paying attention to their health," Viwat said.

Tipco F&B yesterday officially opened its plant in Ayutthaya province. The company, along with its partner - Suntory - invested Bt1.2 billion to establish the plant to produce beverages, functional drinks and fruit juice.

Suntory became Tipco's strategic partner after it acquired 50-per-cent stake in Tipco F&B last year.

Viwat said the company has moved 80 per cent of its product lines in fruit juice and beverages from Prachuap Khiri Khan to the new plant, and will transfer all production by January next year.

At present, the new plant is running at 50 per cent of total capacity or around 130 million litres per year. Tipco expects it to support the production of fruit juice and other beverages for at least the next five years.