GEORGE TOWN: Spritzer Bhd will consider delaying its RM40mil expansion exercise in light of the Movement Control Order (MCO) extension into May.
Group managing director Datuk Lim Kok Boon told StarBiz that the group had committed itself to buying one high-speed and fully automated production line.
“We are now negotiating with the supplier company to reschedule the delivery of the line in view of the extended MCO.
“As for the second production line, its implementation is likely to be deferred.
“We will need to wait for clearer market conditions before the expansion plans can be carried out, ” Lim said.
Spritzer had initially planned to set up two high speed fully automated bottling lines at its facilities in Shah Alam and Yong Peng this year.
The new lines, to be installed by the end of 2020, are expected to boost the group’s production capacity from 750 million bottles litres now to 900 million bottles litres in 2021.
Besides installing the two production lines, Spritzer also planned to upgrade its existing manufacturing facilities in Selangor, Johor, and Taiping, so that they are compatible with Industry 4.0 standards and practices.
“These plans will also have to be rescheduled as well, ” he added.
Spritzer now has a total of 16 production lines.
According to Lim, since the MCO started on March 18, the group’s sales have dived by about 30%.
“This is due to the restriction on the operating hours of approved retail outlets, the temporary closure of restaurants, and hotels and other retail outlets, ” he said.
Lim added that after the MCO, the group would look into revising its targets for its distributors.
“After the MCO is lifted, things won’t go back to normal right away.
“We can expect our sales to be challenging.
“For this reason, we will need to look at revising the sales targets.
“There is no point maintaining the old targets if the market conditions have changed substantially, ” he said.
According to Lim, the group will also look into focusing more on online sales and invest more in digital sales and marketing.
“We have observed that online shopping is extremely popular during the MCO period.
“The group will enhance and expand our online channels to cater to the changes in consumer behaviour and the fast-growing online market, ” he said.
Lim added that the group wanted to grow its capacity and capability with more high-speed automated bottling lines to gain a bigger market share.
In 2019, Spritzer spent RM60mil to build the recently completed automated warehouse in Taiping.
“This automated warehouse will start operations once the MCO is lifted.
“The facility will be able to support a much larger business volume.
“Our warehouse operations will be more cost-effective over the longer term.
“We foresee a significant improvement in loading time and delivery efficiency, ” Lim said.