Etika eyes 30-40% revenue increase over next five years

KUALA LUMPUR: The newly consolidated Etika Group of Companies, is looking to grow its revenue by 30%-40% in the next five years, from a turnover close to RM1.5 billion last year, said its president and CEO Erwin Selvarajah.
The group is the merged entity of Permanis Sandilands Sdn Bhd and Etika International Holdings, which were both owned by Japanese brewery and soft drink giant Asahi Group Holdings Ltd. Permanis was acquired in 2011, while Etika International was purchased in 2014.
The Etika Group is primarily involved in manufacturing, distribution and marketing of beverage and dairy drinks, including Pepsi, Mountain Dew, Wonda Coffee and Calpis.
“Obviously, every FMCG (fast-moving consumer goods) company will be looking for double-digit growth. But year-on-year there are various challenges that we need to face. So to grow the business by 30% to 40% over the next five years, I think it is quite possible for us,” he told reporters at a post consolidation press conference yesterday.
“All of our products are gaining good traction (numbers across Malaysia). I think we are well positioned to capture that growth,” he added.
For 2016, Erwin said the group is looking to record a high single digit growth in sales in Malaysian market, as well as to exceed its RM1.5 billion sales turnover of 2015, adding that the group has achieved about 66% of its sales turnover target thus far.
“Our focus is to continue giving consumers the best quality of our 12 categories of beverages and dairy products with affordable prices.”
“Through efficiency, Japan’s technology and work relationship with PepsiCo, we are fortunate to be able to get some of the cost off in the production of our businesses,” he noted.
This Erwin said, enables the group to share some of its cost savings with its consumers, adding that a few of its products prices have decreased by up to 10% post Goods and Services Tax implementation.
This however was negated by an increase in operating costs, Erwin said, which led to compressed margins for the group. The group however maintained its advertising and promotion activities which takes up about 5%-10% of its total revenue.
“And as the production lines of our products run individually, there is also no risk for retrenchment in the group. Currently we have about 2,000 workforce nationwide,” he added.
To-date, Erwin said the group’s share of the retail ready-to-drink beverages market, is about 20-25% domestically.