Firm earmarks Bt1.1 bn for capacity expansion
Supply-chain efficiency, exports to new markets on the cards
Sermsuk, Thai Beverage (ThaiBev)’s manufacturing and distribution arm for beverage products and owner of "est" carbonated drink, announced to invest Bt1.1 billion to open two new production lines to raise the capacity of its drinking water and carbonated soft drink production for this summer season. The budget will be allocated to enhance its production and supply chain efficiency as well as invest in its sales operation and complement its product portfolio.
To celebrate its 60th anniversary, the company also launched 'Wrangyer' energy drink as a new addition to its non-carbonated beverage portfolio.
With the fast expansion of its non-carbonated drink portfolio, the sales ratio of non-carbonated drinks at SermSuk - including Crystal drinking water, Oishi ready-to-drink green-tea, Lipton tea products, Gatorade sport drink, and Wrangyer energy drink- is expected to increase significantly from 30 to about 50 per cent by the end of this year.
A source at Serm Suk said it was expected that the company would export est cola and flavoured drinks to new markets overseas via Freser & Neave (F&N)'s manufacturing and distribution networks. F&N, which was recently acquired by Charoen Sirivadhanabhakdi, has sales and marketing operations in more than 20 countries in Asia and beyond.
The source said that there was also a possibility that Serm Suk would introduce F&N's beverages to Thailand via the company's strong distribution network of more than 200,000 retail stores and eateries.
Serm Suk was acquired by ThaiBev, a beverage giant owned by Charoen on September 2011. The bottling and distribution contract with Pepsi-Cola expired on November 1 last year and the company immediately launched its own cola drink brand - est the following day.
Dhitivute Bulsook, president of Sermsuk Public Company Limited, said that the year 2012 saw changes in all dimensions of our company, both internally and externally. To keep pace with movement in the market and meet diverse consumer needs, we ran the company in accordance with our four business pillars, introduced a new corporate identity under the 'Fulfill Happiness' concept and launched 'est', our first carbonated soft drink brand which created the cool-est phenomenon and changed the dynamics of the entire Thai beverage industry. These initiatives have strengthened Sermsuk to be a sustainable growing organization."
Breaking records with its best-ever performance in Sermsuk's 60-year history
"Our four business pillars represent an ideal business success formula that has driven us to achieve the best-ever performance in our 60 years of operation. Our 2012 revenues were more than Bt23.2 billion, a Bt1.54 billion increase over 2011, with an increase in sales volume accounting for 7 per cent growth. Net profits were around Bt600 million, a 990 per cent increase over 2011," he added.
Fast-forwarding its business plan as Sermsuk enters its 7th decade of operation
"Sermsuk's 2012 achievements are just the first step in the company's evolution into a sustainable and steadily-growing organization. To mark our 60th anniversary today, we will fast forward into our 7th decade with a goal to fill Thai people with greater happiness. Our 2013 investment plan of Bt1.1 billion will focus on expanding our product portfolio to meet the diverse range of market needs and consumer demands in Thailand," added Dhitivute.
The 2013 investment plan includes: adding two new production lines to increase drinking water production by 25 per cent to meet local market demand, and increasing PET carbonated soft drink production by 30 per cent to address the growing PET market segment; enhancing production and supply chain efficiency by increasing the speed of production and logistics efficiency in the company's five plants in Pathumthani, Chonburi, Nakhonsawan, Suratthani and Nakhonratchasima; and investing in its sales operation to expand its potential by focusing on tools to increase sales and distribute products more efficiently with enhanced network coverage.
Sermsuk will also introduce new beverages into the Thai market this year to expand its product portfolios and fill Thai people with even more happiness through a more diverse product offering. Sermsuk has strengthened its business strategy of expanding its line of non-carbonated drinks by introducing "Wrangyer", the company's first energy drink brand, into the Bt20-billion energy drink segment, which is undergoing annual growth of 10 per cent.
In late 2012, the company acquired Wrangyer Beverage (2008), the producer & distributor of Wrangyer energy drink and Power Plus sport drink, for Bt248 million. With its unlimited potential, readiness and over 27 years of experience in driving the energy beverage market, Sermsuk has set an ambitious target for Wrangyer sales of one billion baht in the first year.
"With our strength and clear business direction, I believe that our Fast Forward mission into the 7th decade of operation will open a new chapter in Sermsuk's history while reinforcing our position as Thailand's quality products producer and distributor that continues to fulfill the happiness of Thai people", Dhitivute said.