Serm Suk's new business focus after shareholding change

Serm Suk chief executive officer Somchai Bulsook said over the weekend that it was time for the company to create its own carbonated-drink brand and expand its businesses.

“We’ve been serving our customer’s brand for a long time and have neglected to build our own brand. We are able to develop our own carbonated-drink brand, just as we’ve done with our drinking-water brand, Crystal,” he said.

Serm Suk has been producing Crystal for 19 years, and has the second-largest market share in the drinking-water segment.

Somchai said Serm Suk must dare to change to ensure its survival amid tough global conditions and the challenges of the upcoming Asean Economic Community. 

Thanks to its vast logistics network and support from its major shareholder, who owns Thai Beverage - Thailand's largest beverage company, the CEO strongly believes Serm Suk can survive hard times, and become stronger and grow as a result.

 

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The company last year faced a particularly difficult period due to the severe flooding and uncertainty over its contract with Pepsi, but that led to the crucial decision to establish a new business structure and introduce the corporate brand of Serm Suk to the public.

The company plans to introduce its own-brand carbonated drinks and the non-carbonated beverages of partners, including Oishi, to the market in the next three to four months, he said.

Oishi is another subsidiary of Thai Beverage .

“We are ready to manufacture other carbonated soft drinks that fit our business direction. Even though the AEC will mean many brands will enter Thailand, the company sees an opportunity to grow from distributing those products if the margin is healthy. Having been a bottler for 59 years, the company has a lower margin, therefore we should not be closed to opportunities if they can help us get a high margin and be independent,” he said.

Serm Suk has identified four business pillars for its new direction: expansion of the drinking-water market under the Crystal brand; expansion of its line of non-carbonated drinks; distribution of both |food and beverage products; and the manufacture of other carbonated soft-drink products.

The new business direction will be proposed for board approval and is expected to become effective in November, Somchai said.

Dhitivute Bulsook, president of Serm Suk, said the company’s new business direction would drive the organisation to achieve its new corporate vision of being recognised as a quality producer and distributor.

Under the four pillars, Crystal will become a key product in its portfolio, replace existing carbonated drinks. The goal is for Crystal to be market leader in the next two years. 

The company is introducing a 1-litre bottle to meet the needs of drinking-water consumers. Distribution will take place through its vast network of retail outlets. 

The company also recently extended the Crystal production lines at its plants in Surat Thani, Nakhon Ratchasima and Pathum Thani, said Dhitivute.

The company plans to broaden into all dimensions of the non-carbonated beverage segment and to strengthen its ties with Oishi to broaden Oishi’s sales base through Serm Suk’s network of more than 200,000 retail outlets and food stores nationwide. 

Dhitivute said the company would also explore opportunities to buy other non-carbonated brands of drinks with high market potential.

In addition to being a leading beverage distributor, Serm Suk has become a distributor of food products. 

The final business pillar is to build its own carbonated-beverage brand, benefiting from the experience gained in building market leadership for the Pepsi brand in Thailand over nearly six decades, Dhitivute added.