In 2018, the Company continued to commit on operating business for sustainable growths despite many challenges during the year including stagnant economic conditions which reflected by relatively slowdown consumers’ spending and purchasing power, high household debt level and lastly, the first ever declaration of excise tax imposition on RTD tea products which directly impact growth of domestic RTD tea industry. Nevertheless, with strong dedications and commitments in operating and managing the business by our management team and employees as well as the execution of our strategic roadmap “Vision 2020”, a strategic plan of the Group which has been continuously implemented since 2014 by the Company in order to become a strong and sustainable leading F&B company in ASEAN region with 5 core strategies per follow;
Growth which is driving sustainable growth in revenue and profitability in food and beverage business
Diversity which involves creating varieties of product portfolios, segments and price points while leveraging from professional team with diverse experiences, knowledge and expertise within the Group
Brands which engages in building strong top of mind brands by maintaining leading market position in Japanese food, green tea and RTD tea in Thailand through innovative products, creative marketing campaigns, customers engagement and strong brand awareness creations
Reach which focuses in expanding and initiating distribution coverage to access new consumers in various segments both domestic and international
Professionalism which comprises developing and maintaining professional team as well as providing working infrastructure to realize full potentials of the professionals
The execution of the above strategies has improved the Company’s adaptability and readiness to withstand fast changing economic and business environments while enabling the company to continue operating business as planned with synergized value creations within the Group resulting in satisfactory operating performances. In 2018, the Company’s normalized net profit was 1,059 million Baht, decreased from the previous year which had normalized net profit of 1,443 million Baht. Regarding sales, the Company’s total sales was 12,596 million Baht with normalized net profit margin of 8.4% of total sales revenue, decreasing from 10.6% of total sales in previous year. This is mainly due to the declaration of excise tax law and the decrease in RTD tea market size. However, with continuously strong financial position and well-known brand which reflects into leading market position and robust financial capability to serve future business expansions, the Company was able to receive affirmed rating at A+ based on considerations by TRIS Rating in October 2018.
The Company continues to build brands in order to strengthen market leading position by executing innovative marketing campaigns and creating brand awareness through several channels including on-line and social media channels which can effectively engage targeted customers group especially young generations as proven by “Thailand Most Social Powerful Brand Award 2018” received from BrandAge magazine for RTD tea category. The measurements were conducted across 4 social media platforms including Facebook, Instagram, Twitter and Youtube. The Company also continues to develop new product innovations including “Oishi Green Tea Yuzu Orange Flavor” with coconut jelly, which received very good feedbacks from young generation consumers. Success from continuous focuses on brands building and researches & developments of new products has resulted in highest market share of the Company in RTD tea market and Pure RTD green tea market with market share of 45.4% and 47.0% respectively and resulted in the receipt of “Super brands Thailand 2017” for the third consecutive years. The award was granted by Superbrands Thailand, which is an independent organization that assess branding of goods by measuring reliability and trustworthy of those brands in consumers’ mind. Moreover, the Company was awarded the “The Most Powerful Brands of Thailand 2018” for the fourth consecutive years from Faculty of Commerce and Accountancy, Chulalongkorn University. The two awards have proved us as consumers’ top of mind brand with continuous development of innovative products to match evolving consumer trends and varieties of consumer needs.
Although the declaration of new excise tax law may have resulted in short-term slowdown in domestic RTD tea industry, the Company continues to successfully executed expansion strategy in overseas market. Currently, Oishi green tea is considered one of the leading RTD tea products with continuous growing sales in Kingdom of Cambodia and Lao People’s Democratic Republic and Malaysia. In this year, strategic focus has been placed on market expansion in Republic of the Union of Myanmar as well. The Company’s green tea products are also distributed in other 25 countries around the world. With strong brand equity, there are great potentials for further international market expansion.
In accordance with “Vision 2020” with 5 core strategies, the Company is able to create sustainable growths for the best benefits of all stakeholders including employees and communities where the Company resides as can be seen by the implementation of environmental friendly policies which resulted in the receipt of Certificate from Thailand Greenhouse Gas Management Organization as a beverage producer who helps reduce greenhouse gas emissions. Moreover, the Company involves in building and improving surrounding communities for sustainable growths as well as placing focuses in enhancing quality of products and services to strengthen long term business competitive advantage with great emphasis on consumers’ health and safety as proven by Food Safety Award received from the Ministry of Public Health in 2018.
Regarding corporate social responsibilities, the Company is committed to conduct business based on the foundation of governance, social and environmental responsibilities by implementation of strategies and CSR activities throughout all business processes. For example, improvement of production process to reduce environmental impacts and clean drinking water project which the Company initiated this year to improve drinking water utilities in communities around factory areas in order to create value and positive impacts to ensure that business, communities and environments can grow sustainably together. Details regarding these activities have been fully disclosed in Corporate Social Responsibility Report section of this annual report.
On behalf of the Board of Directors, I would like to assure that management team and all employees are strongly determined and dedicated to sustainably grow food and beverage business while maintaining market leading position in both Japanese food and green tea beverage businesses as strategic part of Thai Beverage Group. Please be assured and put your kind trusts and supports to the Company’s managements for the long lasting prosperity of the Company and shareholders.