GEORGE TOWN: Despite a soft consumer market, Spritzer Bhd anticipates a double-digit growth in sales this year.
Group managing director Datuk Lim Kok Boon told StarBiz that Spritzer is planning a new automated warehouse at its Taiping plant to accommodate the higher volume of production and sales.
“The size, capacity and cost of the new warehouse will be finalised in the second quarter of this year.
“We plan to spend about RM25mil for maintenance and upgrading of our facilities and assets in 2017,” Lim added.
He said 2017 is expected to remain challenging amidst global and domestic economic uncertainties.
“We are experiencing slower sales growth. However, given the weak consumer sentiment and spending, we are satisfied with our sales numbers so far, and are confident of achieving a double-digit percentage growth.
“To achieve our sales growth and capture a bigger market share for our bottled water products, we will launch new functional water products soon,” he added.
Lim said the competitive operating environment and weak consumer sentiment might restrict the group’s ability to pass on the rising costs, resulting in margin compression.
As for expansion plans, Lim said Spritzer did not have any major plans now.
“We currently have a total of 15 bottled water production lines. We have no immediate plan to install additional bottled water production lines in the near future.
“However, we are constantly upgrading and automating to enhance our competitive edge.”
The group’s current annual production capacity is about 650 million litres.
On the export market, Lim said Spritzer had recently started to export to the United Kingdom.
“In Asia, we are currently exporting to Singapore, Brunei, China, Hong Kong, Taiwan and Papua New Guinea. The export segment is growing,” he said.
On the domestic front, Lim said the Klang Valley and its surrounding areas are still the group’s strongest markets.
Meanwhile, the Nielsen Consumer Confidence for Malaysia has dropped by five points to 84 percentage points in the fourth quarter of last year compared with the preceding quarter.
According to Nielsen, consumer spending in Malaysia is expected to remain flat at best for the next six months.
“Malaysia now has one of the lowest consumer confidence ratings in South-East Asia, which does not bode well for local demand in the country for 2017.
“With such a low confidence level, we cannot expect consumer spending levels to move positively for the next six months.
“As such, I believe that consumer spending will remain flat at best,” Nielsen Malaysia country manager Richard Hall said in a statement.