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M-150 to Raise Global Share: Also, Overseas Factory Goal for Shark Brand

Posted on: Thursday, 16 March 2006, 15:00 CST

By Pitsinee Jitpleecheep, Bangkok Post, Thailand

Mar. 16--After consolidating the presence of its M-150 energy drink in the Asian market, Osotspa Co is planning to go global with its Shark brand.

Osotspa, which claims to be the second oldest energy drink producer in the world, hopes to emulate the success of market leader Red Bull in the global market.

"We shifted focus to marketing energy drinks overseas this year because demand in Thailand is saturated with annual market growth of just 1-2 percent," said Ratch Osathanugrah, executive chairman of Osotspa group of companies.

Mr Ratch said the company started exporting its M-150 and Shark products step-by-step in 1994. The sale of its two energy drinks now stands at about 1.5 billion baht per year.

However, it has lost about 200 million baht due to poor performance overseas in the past five years, mainly due to strong competition in Europe and the US.

Last month, Osotspa International Co was set up by the group to handle export markets. The firm's president Soonthorn Kengvibul, said sales would take off in the global energy drinks market this year.

Osotspa has over 40 years experience marketing energy drink products locally, and claims production capacity equal to one-third of the global energy drink market.

It has already set up offices in China and representative offices in Austria, the UK, Indonesia, Burma, the US and Vietnam.

Mr Soonthorn estimated about 12 billion bottles or cans of energy drinks were consumed in 2005 for a market value of 320 billion baht. Global sales is expected to reach 550 billion baht within the next five years.

However, consumption per capita in some countries remains low at between 0.2-13 bottles per head per year, compared with 23 bottles in Thailand.

"Considering the global energy drink market's growth potential, we, as the market leader from Thailand with a 65 percent share, are ready to go global with aggressive marketing plans this year," he said.

The company hopes M-150 and Shark will be among the top three global energy drink brands in the year 2010.

Also, it hopes to advance its market share closer to Red Bull, the global brand champion among energy drinks.

Osotspa plans to spend 10 billion baht from 2006 to 2010 to promote its products.

It will built its own factories in countries that have high trade barriers and are new to energy drinks or have a high per capital consumption, including Bangladesh, India, and China.

The company also plans to expand its business through joint ventures with local partners.

Mr Soonthorn said that Shark and M-150 would be distributed in over 60 countries within the next two to three years, from 50 at present.

Mr Ratch said that Osotspa's sales increased by 8 percent to 16 billion baht last year, exceeding an earlier projection of 5 percent. It reported a net profit of between 400 and 500 million baht.

Of total sales, 60 percent came from energy drinks, 30 percent from consumer products and 10 percent from pharmaceutical products.

The company expected to raise sales to 20 billion baht over the next three years using the new marketing strategy, about 80 percent of which was expected to come from the domestic market.

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Copyright (c) 2006, Bangkok Post, Thailand

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Source: Bangkok Post

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