May 16, 2014 00:00 By Kwanchai Rungfapaisarn The Na
Tan Passakornnatee, president and CEO of Ichitan Group, yesterday disclosed the acquisition of the Bireley's trademark and beverage formula from Sunny Herb International Beverage Co at the cost of Bt240 million. Ichitan now will be able to use the tradema
"Acquiring the 96-year-old Bireley’s is a worthwhile deal, and was not expensive. We can benefit from the deal by expanding our portfolio into fruit juice, relying on the long-standing reputation of the Bireley’s brand name, which is recognised by customers in Thailand and other potential markets in the region," he said in an exclusive interview with The Nation.
Meanwhile, Ichitan’s board approved an investment of Bt244.9 million to purchase a 76-rai (12-hectare) plot near its existing beverage plant in Rojana Industrial Park in Ayutthaya province, as well as another Bt1.2-billion investment budget for a new beverage facility to be opened around 2016. The new facility will have similar capacity to the existing plant, about 1.4 billion bottles per annum.
Tan said the company paid only Bt80 million for lifetime ownership of Bireley’s trademark in Thailand, and another Bt10 million each for 15 other markets. They are Cambodia, South Korea, Canada, Myanmar, the Philippines, Malaysia, Singapore, the United States, mainland China, India, Hong Kong, Bangladesh, Indonesia, Taiwan and Vietnam. Another Bt10 million was for the beverage formula.
He added that after acquiring lifetime ownership of the Bireley’s trademark, the company need not pay any licence fee for marketing the brand in Thailand and the other 15 markets. Such a licence fee would normally be about 2-5 per cent of sales.
"We did not spend much time negotiating this acquisition deal. We listed Ichitan on the stock market recently with the aim of expanding our business, which will be conducted under existing and new portfolios. It is part of our strategy to boost sales," he said.
"Purchasing a brand with a strong reputation is a better way of expanding our beverage business. It is quite a lot easier than developing a brand by ourselves from the ground up," he said. Tan said the company would start exporting its Ichitan green tea and Bireley’s fruit juice next year.
"Our existing beverage plant at Rojana Industrial Park is now in the second phase of expansion, with current production capacity at about 800 million bottles per annum. It will reach 1 billion per annum by the end of this year, and will take another year or two to reach its full annual capacity of 1.4 billion bottles."