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ICHI unveils raft of new healthy drink products to propel strong earnings growth in H2

Ichitan Group Public Company Limited (ICHI) is set to launch ICHITAN Vitamin C Plus E Water, an immunity-boosting drink to prevent cold and protect immunity, and ICHITAN Vitt CC, a rich vitamin C beverage, during late September to early October; and ramps up production capacity. Ichitan Indonesia is expected to continuously contribute profit throughout this year and as such helps ICHI achieve financial target.

Tan Passakornnatee, President & CEO of ICHI, said the company aims to deliver growth in both top line and bottom line for the second half of 2020 in the light of its aggressive marketing plan for healthy drink products. “Ichitan’s Alkaline water PH PLUS 8.5”, a beverage with vitamin B received good response from consumers after it was unveiled in late June, and a series of new product launches between late September and early October are expected to give a boost to the company's second-half earnings. The new products in pipeline are Vitamin C Plus E Water (C200), which will be available in two bottle sizes of 550 ml at 20 baht each and 350 ml at 10 baht through modern and traditional trade channels; ICHITAN Vitt CC, which is sold in a 280 ml bottle priced at 15 baht via traditional trade, MAKRO, and Mini Big C; while herbal tea product under brands of Yen Yen X Dragonball Z and Yen Yen Super Cooling to capture specific consumer groups.

Moreover, ICHI will implement more efficient marketing campaigns and join forces with alliances including TRUE, IKEA and Grab with an aim at promoting sales in the third and the fourth quarters considered as low season for the company's business to be on par with the first six months.

"This year, we have new categories to improve our manufacturing efficiency and underpin higher profit in the second half. We expect an absence of low season this year due to the rising trend of healthy beverage segment. Even though the market remains small but having high growth potential and ICHI will use the early-mover advantage strategy to gain leading position. The company aims for 400-million-baht sales in the second half to be contributed from new healthy drink products. With ICHI plant's strength in terms of a maximum production capacity of 1.5 billion bottles annually, it enables the company to offer unrivalled distribution of the 10-baht bottle via traditional trade channel. This bottle size, therefore, gets an impressive welcome from consumers, maximizing the company's profit and better managing costs," Mr. Tan said.

The COVID-19 has battered OEM and export markets, but the company's strategy to retain market share helps export sales generated by CLMV stay afloat. Besides, ICHI gears up for expansion into the Philippines and Malaysia after its Indonesia's business continuously makes profit this year by focusing on Thai Milk Tea product which has gained customer loyalty.
The company's sales are expected to be revitalized in the final six months, assuming business expansion, the receding spread of coronavirus, and launches of new flavors and drinks such as Thai Coconut water, ready-to-drink Teh Tawar and “Ichitan’s Alkaline water PH PLUS 8.5” contained vitamin B complex to continuously penetrate into Indonesia.

ICHI remains adhere to its 3N strategy comprising "New Products" particularly emphasizes "Shizuoka" at premium tea and healthy beverage at which the company is taking aim and gains popularity, “New Markets" where the company is exploring growth opportunity locally and internationally, and "New Business" of which the company is in search to increase growth.

ICHI targets a 5% sales growth this year from last year's 5.3 billion baht. For the January-June period, ICHI's sales fell 10.4% from a year earlier to 2.66 billion baht, but its net profit, bucking trend of the ready-to-drink market, surged 22.9% to 308.5 million baht with gross profit margin of 20.6% and net profit margin of 11.6%. At the end of June 2020, the country's ready-to-drink tea market contracted 12.71% in terms of value and 13.02% in terms of volume to 5.64 billion baht, of which 11.49% was made up by premium tea and Shizuoka managed to retain its leadership with a market share of 28.09%.