TCP Group banking on overseas growth
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TCP Group banking on overseas growth

Company monitoring production cost hike

Mr Saravoot poses at the TCP Legacy Museum.
Mr Saravoot poses at the TCP Legacy Museum.

TCP Group, the manufacturer and distributor of Krating Daeng (Red Bull), views the foreign market as having high growth potential as it monitors rising costs.

"The energy drink market grew only 4-5% in the first quarter this year as a result of the stagnant economy," said Saravoot Yoovidhya, chief executive of TCP Group.

He said Thailand is now in the hot season, which is the high season for the beverage industry. However, the scorching weather and long drought have marred the agricultural sector.

Last year, the company faced higher production costs of 10% as global raw sugar prices increased.

This year, the company is monitoring the effect of the hot weather conditions on crops, said Mr Saravoot.

He said the Thai energy drink market competed mainly on cost differentiation as many new brands were launched on the market.

Last year, the company raised the price of its well-known energy drink, Red Bull, to 12 baht per bottle while its main competitor still maintained the same price of 10 baht per bottle.

In contrast, the overseas energy drink market has seen a minimal price war compared to the domestic market.

"Many companies, including food and beverage manufacturers, from other regions are eyeing the Southeast Asian market due to the high economic growth in this region," Mr Saravoot said.

The company has a production facility in Prachin Buri, where 61% of the products produced is for the export market.

Moreover, the company also has factories in Vietnam, China and Nepal.

At present, TCP has a market share of around 17-18% in Thailand, over 50% in Vietnam and 40% in China.

"Vietnam is considered one of the markets with high growth potential," Mr Saravoot said.

He said the company is mulling pushing other beverage brands such as Sponsor, an electrolyte beverage, to expand abroad following its strong presence in the US and South Korea.

The company will continue to provide facts for the consumer to better understand its products and develop new product lines such as non-sugar drinks and carbonated energy drinks.

The company has unveiled the TCP Legacy Museum in Prachin Buri, showcasing its history and experiences in the energy drink business.

The museum highlights the creation of Krating Daeng and Red Bull brands, the development of innovative products tailored to the unique lifestyles of today's consumers, and the establishment of an organisational foundation for sustainable growth which aims to inspire the younger generation.

Mr Saravoot said the Thai beverage market this year is expected to grow by 10%.

The company aims to achieve double-digit growth higher than the overall market.

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