Permanis seeks to broaden product range (Update)

  • Business
  • Saturday, 23 Nov 2013

PERMANIS Sdn Bhd, which recently celebrated its 40 years of operations in Malaysia, is confident it will be able to quench consumers’ growing thirst and carve a stronger brand name in the competitive ready-to-drink beverage market in the country.

Since being bought over by Japanese beverage giant Asahi Group Holdings Ltd in 2011, the official bottler for PepsiCo in Malaysia has invested significantly in manufacturing as well as in marketing and distribution.

In an interview with StarBizWeek president and CEO Erwin Selvarajah says Permanis is probably the only beverage company in the country that distributes directly to more than 50% or in excess of 40,000 serviced outlets nationwide.

These include supermarkets, fast food chains and coffee shops, he says, adding that it currently commands around 70% market share in the beverage segment in the quick service restaurant business.

“We will continue to strengthen and expand our range and brand of products. From the investment point of view, the company has made substantial investments post-Asahi acquisition in manufacturing, marketing and distribution. The strong distribution capabilities has allowed us to strengthen our relationship with customers in terms of their taste for the type of beverage they consume,” he adds.

In a bid to better serve and strengthen its relationship with business partners, associates and consumers. Permanis in May this year launched its RM35mil operations office and main warehouse in Bangi to deliver services with a faster turnaround time.

On its range of products, he says the company is in every single category with the exception of dairy products, noting that it will be launching its first ready-to-drink coffee range called Wonda next month.

According to Selvarajah, as for the expansion of its products, the company will look into broadening the categories of its existing products and investing in technology to enhance its product range.

Permanis will also look into investing multi-billion ringgit over the next 10 years in marketing expenditure and expansion of product range, he notes.

As for its product contribution to revenue, he says the company has a good spread across all its brands and most of them contribute almost equally.

For example, Pepsi accounts for less than 15% in terms of revenue contribution, whereas Tropicana Twister, Revive, Mirinda and Mountain Dew account for about 10% to 20% each.

He says there is great potential of the ready-to-drink beverage market in the country. “Malaysia, unlike other countries, has a low per capita beverage consumption per year of about 100 cans. In Singapore and Thailand, it is between 300 and 400 cans compared with the US and Europe where the figure is higher at between 800 and 1,000 cans,” he adds.

Apart from adopting a stronger green technology for Permanis plants in line with Asahi’s business objectives, he says, its Japanese owner has brought in the best practices with strong focus on quality products while pricing competitively.

Citing a famous phrase in Asahi which states “It will take 100 years to build a company but a day to kill it”, Selvarajah says the focus is to deliver the right products with a right price in order to gain consumer preference for the company’s products.

He says the beverage market in Malaysia is set to improve over time as in the last 10 years the industry has been growing at 5% to 10% per annum, whilst the Permanis cummulative annual growth rate (CAGR) growth has been 20% over the same period in spite of low consumption of ready-to-drink beverage.

“It may take one generation before changing the mindset of people to consume ready-to-drink beverage from the beverage they drink directly from shops or other food outlets,” he says.

Permanis started operations in 1973 and manufactures and distributes some of PepsiCo’s global brands such as Pepsi, Revive Isotonic, 7UP, Tropicana Twister, Mirinda, Lipton Ice Tea, and Gatorade, as well as its own range of products which include Excel, Chill, Frost, Kickapoo, Bleu and Shot.

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