Spritzer Bhd runs 16 production lines and fills 750 million bottles of water a year. By 2021 it wants that number at 900 million.
The Penang-based group told StarBiz it will put two high-speed, fully automated bottling lines into its plants in Shah Alam and Yong Peng, and have both installed by the end of 2020. The lines are part of a RM40mil investment plan. Group managing director Datuk Lim Kok Boon said most of the capital spending budget is earmarked for them.
“We certainly want to have a bigger market share in the bottled water industry,” Lim said. “The group aims to grow its capacity and capability with more high-speed automated bottling lines.”
Older plants get an upgrade
Whatever is left of the budget goes to the existing factories in Selangor, Johor and Taiping, which Spritzer wants brought up to Industry 4.0 standards.
Taiping already has a new piece of kit. The company spent RM60mil in 2019 on an automated warehouse there, due to become operational in the second quarter. Lim expects it to carry a much larger business volume and to cut loading times and delivery delays.
Demand, and the virus
The timing is awkward. Lim said consumer sentiment had been weakening since 2019, and the coronavirus outbreak has disrupted the market further. Spritzer expects a short-term jump in sales as people stock up under the movement control order, but he conceded that bottled water consumption could be hit in the near term.
Its trading operation in Guangzhou, which brings in less than 5% of group revenue, will take a knock during this period. Staff there had been unloading boxes of Spritzer water for frontline workers at epidemic prevention stations, hospitals and police stations.
Exports go to the United Kingdom, Holland, Singapore, Brunei, Hong Kong and China, and they contribute less than 10% of revenue. Lim said the target is to lift that above 10% within three years.
The product range is growing as well. After Chinese New Year the company added two BonRica HydrateDay drinks, which it says replenish water, electrolytes and energy lost during exercise. In 2019 it introduced smaller pack sizes.
Lim was upbeat on the long run. “We are confident that the demand for our bottled water will remain firm over the long term due to our strong brand equity and the consumers’ general preference for healthier beverages,” he said.
Sources
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