GEORGE TOWN: Spritzer Bhd is spending RM30mil to add two production lines for its Taiping and Yong Peng plants.
Group chief executive officer Kenny Lim Seng Lee told StarBiz that the line for the Taiping plant will be ready in December 2023, while the one in Yong Peng, by the first quarter of 2024.
The two lines will raise the group’s annual production capacity to 1.2 billion litres from one billion litres.
“The demand for bottled water in the country grew this year. For Spritzer, our 2023 sales have so far improved by more than 10%. We expect our sales to sustain in 2024,” he added.
According to the Germany-based Statista, a global data and business intelligence platform, in 2023, the Malaysian bottled water market is expected to generate a US$289.4mil revenue and will experience a 5.93% compounded annual growth rate (CAGR) from 2023 to 2027.
In terms of per-person revenue, the Malaysian market generated US$8.62 in 2023, the report said.
By 2027, out-of-home consumption, such as in bars and restaurants, is expected to account for 25% of spending and 10% of volume consumption in the bottled water market.
“Furthermore, the average volume per person in the bottled water market is forecast to be 19.70 litres in 2023.
“The demand for premium bottled water brands in Malaysia has surged, driven by health-conscious consumers and the growing trend of urbanisation,” the report said.
Lim said the group planned to introduce two to three new beverage products in 2024.
“We will work on offering a more comprehensive product range to enhance our market leadership position further,” he said. According to him, the raw material costs have been relatively stable.
“We expect our margins to be manageable if other business operating costs and exchange rates remain stable,” he said.
Lim said the group would remain focused on improving operational efficiency and excellence.
“We will continue to invest in our core brands and further automate and enhance our production processes and capacities.
“We will continue introducing sustainable packaging alternatives for our bottled water products.
“To sustain our market leadership position, we will strengthen the differentiation of Spritzer products by highlighting the benefits of our silica-rich mineral water and also the absence of microplastics in our Spritzer natural mineral water in laboratory tests conducted by Sirim Bhd,” Lim added.
The Malaysian economy expanded moderately by 3.3% in the third quarter of 2023 and grew by 3.9% for the cumulative three quarters of 2023.
However, the group’s revenue improved by 11% in the current quarter and by 13% for the nine months ended Sept 30, 2023.
The sales of our bottled water products have remained strong mainly due to the robust demand, the strong recovery in tourism activities and the hot weather environment.
“Our innovative branding, marketing and promotional activities have also enabled us to perform well thus far,” Lim said.
Spritzer will focus on improving operational efficiency and excellence, with plans to invest in core brands and further automate and enhance production processes and capacities.
“We will continue introducing sustainable packaging alternatives for our bottled water products,” he said.
For the nine months ended Sept 30, 2023, the group posted RM36mil in after-tax profit on the back of an RM365mil turnover compared with RM25.6mil and RM324.6mil achieved in the same period of 2022.
“Based on our strong performance thus far, we expect our 2023 revenue and profit to improve significantly over the previous year,” he added.