Srithai to set aside B1bn for bottle plant

Srithai to set aside B1bn for bottle plant

Company to expand beyond tableware

Srithai Superware Plc, the world's leading melamine producer, plans to spend about 1 billion baht to acquire a beverage bottling factory this year in a bid to expand beyond tableware and plastic packaging.

Sanan: we're convinced to do beverage bottling for customers 

President Sanan Ungubolkul said the SET-listed company was in talks with some beverage companies to buy their factories.

Srithai was convinced by beverage customers who buy plastic bottles from it to set up a bottling factory for their green tea and fruit juices.

"Being a bottler for our beverage customers is a good business move. And a merger and acquisition will be a shortcut for us to diversify business and respond to customer needs," he said.

If the negotiations fail, the melamine producer will set up its own bottling plant on a 40-50 rai plot instead. The investment will be about the same as the acquisition budget.

"We see a great opportunity to do the bottling for fruit juice and green tea because these beverages see growing demand. The business expansion will help us lower risks," Mr Sanan said.

At the same time, the company has re-entered the Chinese melamine market since late last year after a 24-year absence.

Chinese consumer behaviour has changed to use more quality melamine products than in the past decades. Currently, there are some 2,000-3,000 melamine manufacturers across the country.

Srithai started exporting melamine products to China again late last year with sales reaching 10 million baht.

With a better-than-expected response for its quality melamine products, the company decided to set up a joint venture with a melamine company in China to respond to demand more quickly.

The joint trading company will be officially established soon. The new venture will look after the sales and distribution of melamine products to catering outfits and food shops, while the factory with the Chinese partner will produce melamine products for the modern trade channel.

"Our 2014 sales missed the target because people's purchasing power did not pick up as expected in the fourth quarter of last year. Until now, local consumption has not fully rebound," he said.

Srithai expects sales to grow by 12% to 11 billion baht this year.

SITHAI shares closed unchanged on Friday on the SET at 2.86 baht, unchanged, in trade worth 26.3 million baht.

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