Sermsuk in B750m push
SET-listed Sermsuk Plc (SSC), the maker and distributor of Crystal drinking water, plans to build at least one bottling plant a year during 2017-21.
The plan is part of the larger strategy by parent ThaiBev to build sustainable growth of its non-alcoholic beverage portfolio to 70% of total revenue by 2021. By that time, Crystal will become the No.1 drinking water brand in Thailand.
Vivek Chhabra, the company's president, said each new plant will require an investment of 150 million baht. A total of 750 million baht will be allocated for the five-year expansion scheme.
Sermsuk is also spending 500 million baht this year to build three new drinking water plants. The first was opened in Khon Kaen in July and the remaining two are underway and will be opened in the first quarter of next year in Ayutthaya and Surat Thani.
The expansion will bring total production capacity of Crystal drinking water to 128.8 million cases per year. Sermsuk now operates six drinking water plants nationwide.
The Ayutthaya plant will serve the Central region and the Surat Thani facility will serve all southern provinces for better logistics and reduce operation costs by 10%.
The company also plans to extend its water portfolio to alkaline and mineral water in the future.
Currently, Thailand's drinking water is estimated to be worth 34 billion baht. The market grew 10% year-on-year in the first quarter of this year but lower than last year's growth due to the drought.
Crystal is the second-ranked brand in Thailand's drinking water market, with a 17.4% share, after Boon Rawd Brewery's Singha brand with 20% and Nestle's 14%.
"We are set to become the leader in Thailand's drinking water market, controlling a 22% market share within the next five years," Mr Chhaba said.
Sermsuk expects sales of Crystal drinking water to grow by 12-14% this year, depending on overall growth in drinking water.
The company will allocate 200 million baht to promote Crystal drinking water for the rest of the year with its "Crystal everywhere" campaign featuring model and actor Naphat "Nai" Siangsomboon.
SSC shares closed yesterday on the Stock Exchange of Thailand at 63 baht, unchanged, in light trade worth 82,350 baht.