Monday, August 26, 2019

Osotspa continues foreign expansion, breaking ground for Bt2.4-bn beverage production plant in Myanm

Nov 27. 2018
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By The Nation

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Osotspa, a leading Thailand-based consumer products manufacturer and distributor, and Loi Hein, Myanmar’s largest drinking water and beverage business, recently held a ground-breaking ceremony for the construction of a new beverage production facility in the Thilawa Special Economic Zone in Yangon.

The project forms part of the listed company’s expansion strategy in Southeast Asia and its goal of increasing revenue from international markets.

Osotspa president Wannipa Bhakdibutr said: “Osotspa has a strong vision and a focused strategy to expand our investments in Southeast Asia, particularly in major markets we view as having strong growth potential, including Myanmar, Laos, Cambodia, Vietnam and Indonesia. 

“Our move into Myanmar is based on the tremendous momentum in the country’s retail sector, which is showing strong annual growth. As a result, Osotspa and Loi Hein Co Ltd, our business partner in Myanmar, are jointly building a new beverage production facility to support our business expansion and meet the needs of customers in the country. 

“This is our first production facility in Myanmar and will contribute to significant growth, allowing us to achieve our goal of being the leader in the energy-drinks market in Southeast Asia.”

The new production plant is located on 83 rai (13.28 hectares) in the Thilawa Special Economic Zone. 

It will be operated by Osotspa Myanmar, a joint venture in which Osotspa holds an 85-per-cent share and Loi Hein holds the remainder. 

The project represents an investment of Bt2.4 billion funded by the proceeds received from Osotspa’s initial public offering, which took place in October. 

Construction of the new plant is expected to be completed and ready for operations in the fourth quarter of next year, producing Osotspa drinks for distribution in Myanmar. 

The plant will allow the company to better manage costs by responding to market demand more quickly and efficiently, Wannipa said.

“Osotspa’s strengths as a market competitor and in product positioning allow us to perfectly meet the requirements of consumers, together with our comprehensive distribution channels and our well-established partner, Loi Hein, with whom we have a long-standing business relationship. 

“Collectively, this will support Osostpa’s growth momentum in capturing a greater share of the retail energy-drinks market in Myanmar, which currently stands at 38 per cent. We expect this new facility to improve our gross profit margin after commencing commercial operations due to our increased manufacturing capacity. 

“In addition, Osotspa will further expand our route-to-market and distribution channels to more effectively tap into consumer demand, while simultaneously implementing a strategy focusing on local marketing activities. We believe this will increase our market share and sales growth as planned, contributing to improved revenue in the future,” she explained.

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