Malaysia's Yee Lee hopes Red Bull will boost earnings

Yee Lee Corp, a Malaysian manufacturer and distributor of household consumer goods, is banking on Red Bull to power up its earnings growth.

The company has already invested 2 million ringgit (Bt16.6 million) to boost its sales and distribution network after securing the exclusive rights to distribute Red Bull energy drinks in Malaysia.

The fast-moving consumer goods distributor will invest a further 5 million to 10 million ringgit over the next three years via various marketing initiatives to promote the product.

"We are looking to sell 5 million cases, that’s 120 million cans, this year," Yee Lee group chief executive officer Lim Ee Young told a press briefing.

"The addition of Red Bull will help us match last year’s revenue figures," he said.

In April, the company inked a five-year distribution partnership agreement with Allexcel Trading. The agreement allows it exclusively to market, distribute and sell the latter’s products, including the well-known Red Bull energy drinks.

The deal was done through its wholly owned subsidiary, Yee Lee Marketing, giving Yee Lee the distributorship of a variety of consumables including Red Bull Gold, Red Bull Less Sugar and Red Bull Bottle.

Meanwhile, the Red Bull brand is owned by its founder TC Pharmaceutical Industries Co, and has a market share of some 55 per cent in the energy-drinks segment in Malaysia.

"We have been investing a lot in technology so as to keep exploring ways to reach our customers," Lim said.

"We have also set up a special team specifically charged [with] the beverage lines so as to improve sales and service customers better.

"There is great room for growth in Malaysia."

TC Pharmaceutical CEO Saravoot Yoovidhya, who is also the son of the company’s founder, said Thailand, for instance, had energy drinks as household items and they were priced low because of market competition.

Allexcel Trading general manager Charles Wong said: "We must try harder to bring up the consumption of this energy drink per capita in Malaysia.

"As 2016 will be a more challenging year, we will figure out how to go about the sales.

"Meanwhile, our business plans are being finalised, as are our growth plans for 2016," he said, adding that plans for Red Bull to be a more dominant player in the local market were under way.

For the second quarter ended June 30, Yee Lee posted a net profit of 5.1 million ringgit, 30 per cent lower than the 7.3 million ringgit in the same period last year.

Revenue came in at 185 million ringgit, 4.5 per cent higher than 177 million ringgit last year.

The company also paid out a first and final dividend of 3 sen (25 satang) per share under the single-tier system for the year ended December 31, 2014.