KUALA LUMPUR: Beverage maker Power Root Bhd has inked a co-investment agreement with SAPPE Holding Thailand Company Ltd to tap into the Malaysia-Thailand beverage market.
Power Root co-chairman Tengku Datuk Setia Putra Alhaj Tengku Azman Shah Alhaj said the agreement will help Power Root's premixed coffee, Frenche Roast to expand in Thailand while SAPPE’s product ‘Mogu Mogu’ will be distributed in Malaysia this year.
"Together with SAPPE’s existing stronghold in 3-in-1 coffee, Power Root’s instant coffee and SAPPE’s coffee products would have an addressable market of Thai baht (THB) 20.5 billion (THB100 - RM13.29) within Thailand’s THB 33.0 billion at-home coffee consumption market.
"Simultaneously, we are proud that Power Root has also earned SAPPE’s vote of confidence to distribute its star product ‘Mogu Mogu’ in Malaysia," he said during the signing ceremony today.
Putra Alhaj said more than 40 per cent of the company's revenue now come from overseas.
"Even though Malaysia is our biggest market, we want to further grow our foreign revenue," he added.
The collaboration entails both parties undertaking a project with Power Root supplying raw materials and packaging of ‘Frenché Roast’ to SAPPE, which would subsequently fill and pack into finished goods for distribution to its touchpoints throughout Thailand.
Both parties would collaborate in marketing knowledge and respective know-how and under the co-investment agreement, Power Root and SAPPE will invest a total of THB20 million (RM2.66 million) for working capital.
The project is targeted to complete at the end of 2024, where both parties will form a joint venture, with Power Root (M) Sdn Bhd owning 60 per cent equity and SAPPE holding the balance 40 per cent.
SAPPE is a 100 per cent subsidiary of Thailand Stock Exchange-listed SAPPE Public Company Ltd.
The SAPPE Group manufactures and distributes various products in the segments of fruit juices, coconut products and functional drinks marketed under the brand names of ‘Mogu Mogu, ‘SAPPE Aloe Vera’, ‘SAPPE Beauti Drink’ and ‘Preaw Coffee’.
The Thailand-based manufacturer derives 30 per cent of its sales from its home market, with the vast majority of 70 per cent from global exports across Asia, Europe, the Middle East and the United States.
Meanwhile, SAPPE chief executive officer Piyajit Ruckariyapong said SAPPE is optimistic about its collaboration with Power Root as it is based on its aligned values of supporting healthy lifestyles by introducing innovative and high-quality beverages. - Bernama