Bio Osmo targets Mideast market


  • Business
  • Thursday, 06 Dec 2007

KUALA LUMPUR: Newly listed Bio Osmo Bhd, which produces bottled reverse osmosis (RO) water, is targeting the Middle East where it hopes to market its products via agents by early next year.  

Currently, its products are sold via more than 400 agents in Malaysia and Singapore. 

Mustafa Ibrahim

Executive director Mustafa Ibrahim said the company was in the process of negotiating with potential agents in the Middle East and at this stage could not say what the demand was like there.  

“We’re still in the negotiation stage and hopefully we’ll know by early next year,” he said after the company’s listing ceremony on the second board yesterday. 

Mustafa said the company was planning to produce bottled mineral water in the financial year ending June 30, 2009 (FY09).  

“We’re targeting an initial 200,000 bottles for the home market as well as Singapore and the Middle East,” he said, adding that a site in Batu Pahat, Johor, had already been acquired for the bottling plant. 

Currently, the company has two plants in Batu Pahat producing 1.2 million cases of RO water. 

Mustafa said competition in its market segment was tough with many small producers. 

“We’re able to keep costs down because we produce our own plastic bottles; many smaller companies don’t do this,” he said. For FY07, three-quarters of revenue was derived from the home market and the rest mainly from Singapore. 

According to its prospectus, the company is targeting hoteliers, highway operators, hypermarkets, established soft drink manufacturers, convenience stores and transport/logistics operators to further expand its sales network, which currently comprises more than 400 agents. 

For FY08, Bio Osmo expects net profit to increase 67% to RM11.9mil on the back of RM46.89mil in revenue. The company forecasts revenue to increase by 12% in FY08. 

Bio Osmo opened at its offer price of 33 sen. It closed at 28.5 sen.  

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