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Singapore firm targets region

May 01. 2016
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By KWANCHAI RUNGFAPAISARN
THE NA

SINGAPORE-LISTED Super Group is set to stir up its instant coffee and creamer business in the region and Thailand as the Asean Economic Community starts to percolate.

“Super Group is already a relevant regional player with 15 facilities and productions bases within the member states of AEC, including Myanmar, Malaysia, China, Singapore and Vietnam,” executive director Peter Tan said last week.

“With the implementation of the AEC, the free flow of capital, investments, skilled labour, services and goods will immediately mean greater savings from shared resources such as labour, advertising and promotional efforts, trade tariffs/ taxes currently related to the trade of goods and allocation of various resources across borders.

“The group can also leverage and roll out branding, innovation and diversification initiatives within a recognised region that can elevate Super Group or better integrate the group into the global economy.”

Tan told The Nation that the establishment of the AEC last year was a major milestone in the regional economic integration agenda in Asean, offering opportunities in the form of a huge market of US$2.6 trillion and over 622 million people. In 2014, AEC was collectively the third largest economy in Asia and the seventh largest in the world.

The AEC Blueprint aims for a AEC in 2025 that is highly integrated, competitive, innovative and dynamic with enhanced connectivity and sectoral cooperation.

It will be more resilient, inclusive and people-oriented – a people-centred community, integrated with the global economy.

Asean will be more proactive, having had in place the structure and frameworks to operate as an economic community, cultivating its collective identity and strength to engage with the world, responding to new developments and seizing new opportunities.

The new blueprint will not only ensure that the 10 Asean countries are economically integrated, but also that they are sustainably and gainfully integrated in the global economy, contributing to the goal of shared prosperity.

“A shared economic development region will likely equate to a larger combined market and broad consumer bases for the group to tap into for future growth, thereby further expanding Super’s businesses,” he said.

Stepping into and participating actively within the AEC framework will also mean keen competition for the group’s businesses from bigger companies or markets, such as the Philippines and Thailand, compared to Singapore. Management believes that the AEC inclusion will better position the group to ride on the rising consumption of the middle-income group in Asia.

Despite possible continued macro uncertainties within Asia – currency volatility and raw material (commodities such as white sugar and palm oil) price fluctuations being the two headwinds – the group aims to expand its geographical footprint by extending its brand presence within the core markets and the sales contribution from more new markets.

During the pre-fiscal 2013 period, its branded consumer sales were mainly derived from only four Southeast Asian markets – Thailand, Myanmar, Malaysia and Singapore.

However, for post-fiscal 2015, after the rebranding, headcount and talent recruitment and organic capabilities expansion, its core branded consumer sales come from eight key markets –Thailand, Myanmar, Malaysia, China, Singapore, the Philippines, Vietnam and other export markets. It distributes its products to over 60 countries.

Its growth strategy is expanding distribution, market share and brand presence through the three-pronged approach of branding, product innovation and diversification.

This would improve its offerings to engage with and remain relevant to the rising population of middle-income earners across Asia.

It is targeting revenue growth of over 10 per cent annually from the region over the next five years. Providing convenience and quality instant food and beverage products to consumers is its core principle.

“We are always looking to focus on the core of what we do best and will continue to place emphasis on innovation, building and strengthening our coffee position in the market through our different brands that serve the markets in the region,” he said.

Essenso Microground Coffee is one example of product innovation that will leverage on its branding experience, diversified markets presence and distribution capability to drive growth as a new-category product.

Super Group has just concluded a period of progressive manufacturing line upgrades and new facilities add-ons, building new capabilities such as botanical herbal extracts, freeze-dried coffee, glucose liquids syrup solids and nutritional oil powders (premium-grade creamers). It has doubled its soluble coffee powder plant from 10,000 tons to 20,000. These expansions commenced at the end of 2013 and were concluded by the end of last year.

It is now one of the largest food ingredients manufacturers in Asean. Especially notable is its coffee plant in Malaysia.

Over the past two years, the total investment budget spent was disclosed as 130 million Singaporean dollars (Bt3.4 billion).

The utilisation rates of its enhanced facilities and production capabilities are maintained at 60-65 per cent.

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