Ceylon Cold Stores (CCS) is planning to launch a bottled water product which is currently pending approval by the relevant authorities, a company official said."We are just about to produce our own bottled water. The approval documents for this are currently being processed by the Sri Lanka Standards Institution," Jitendra R. Gunaratne, President Consumer Foods and Retail Group at John Keells Holdings, the parent company of CCS, told The Sunday Times FT.
He said fruit juice manufacturing is also something the company is looking at. "Fruit juice is something we are looking at for in the future and we have the capability and the capacity to do it," he added.
When asked why CCS has not entered milk, cola and malt drink markets, Mr. Gunaratne noted that there is potential in these sectors, but CCS wants to consolidate the segments they are in at present. "When we divert, we need to do so with the minimum price pack size, etc.," he added.
He also added that CCS's portfolio is going to be beyond ice creams and soft drinks in the medium term. "Even in ice creams and CSDs we have a lot more scope to grow – in that now we are calling the ice creams frozen confectionaries while the CSD's are called beverages," he said.
When asked whether CCS will extend their brand into less weather dependent, less mature food and beverage (F&B) related markets than just ice creams and chilled soft drinks (CSD), Mr. Gunaratne said, "I would not look at 'weather dependent' as the single criteria to enter (or not to). We have identified other areas keeping in line with our brand identity. Our criteria will be the scale and the fact that we are giving value to our consumer."
He also added that CCS's portfolio is going to be beyond ice creams and soft drinks in the medium term. "Even in ice creams and CSDs we have a lot more scope to grow – in that now we are calling the ice creams frozen confectionaries while the CSD's are called beverages," he said.
He said the company aims to consolidate the present areas they are in and then get into their maximum potential in these areas. "Then we want to work on other categories." Mr. Gunaratne said that the last two years were disappointing mainly due to the unplanned delay in installing CCS's state of the art bottling plant. "In July 2007 we enhanced our production facility with a US$ 9 million investment. We added more capacity, increased more capability to do new pack sizes, etc. As such we introduced two new production lines with two new imported bottling plants from Europe at our Ranala factory," he explained, adding that CCS was compensated for the delay as they went after damages recovery.
"Now things are looking good, but it is just that the market conditions are hampering the fast recovery we want to have," he added.
He said CCS's marketing drive is aggressive. "New plants are settling in and the production line is kicking in well, but the only dampner is the consumer demand and the consumer spending. Other than that we are ready to match the competition and do better," he said.
He said CCS in this year's profit (which will be probably out tomorrow) has done well compared to last year, because the company has managed to cut costs – especially administrative and also there are savings productivity.
He also noted there is presently a heavy excise duty on CSDs – at Rs. 6 per litre. "As an industry we pay close to Rs. 900 million as taxes. We have made submissions to the government saying that there is a benefit to grow the industry. Compared to our per capita consumption and the per capita income, during the next two to three years the industry has a potential to grow by 50 to 60 %," he said, adding that if the taxes drop, then pricing will also drop to a penetratable level. He said this will help the government as well because more consumption translates to more taxes.
He also added that CCS's portfolio is going to be beyond ice creams and soft drinks in the medium term. "Even in ice creams and CSDs we have a lot more scope to grow – in that now we are calling the ice creams frozen confectionaries while the CSD's are called beverages," he said.
When asked whether CCS will extend their brand into less weather dependent, less mature food and beverage (F&B) related markets than just ice creams and chilled soft drinks (CSD), Mr. Gunaratne said, "I would not look at 'weather dependent' as the single criteria to enter (or not to). We have identified other areas keeping in line with our brand identity. Our criteria will be the scale and the fact that we are giving value to our consumer."
He also added that CCS's portfolio is going to be beyond ice creams and soft drinks in the medium term. "Even in ice creams and CSDs we have a lot more scope to grow – in that now we are calling the ice creams frozen confectionaries while the CSD's are called beverages," he said.
He said the company aims to consolidate the present areas they are in and then get into their maximum potential in these areas. "Then we want to work on other categories." Mr. Gunaratne said that the last two years were disappointing mainly due to the unplanned delay in installing CCS's state of the art bottling plant. "In July 2007 we enhanced our production facility with a US$ 9 million investment. We added more capacity, increased more capability to do new pack sizes, etc. As such we introduced two new production lines with two new imported bottling plants from Europe at our Ranala factory," he explained, adding that CCS was compensated for the delay as they went after damages recovery.
"Now things are looking good, but it is just that the market conditions are hampering the fast recovery we want to have," he added.
He said CCS's marketing drive is aggressive. "New plants are settling in and the production line is kicking in well, but the only dampner is the consumer demand and the consumer spending. Other than that we are ready to match the competition and do better," he said.
He said this year's profit (which will be probably out tomorrow) CCS has done well compared to last year, because the company has managed to cut costs – especially administrative and also there are savings productivity.
He also noted there is presently a heavy excise duty on CSDs – at Rs. 6 per litre. "As an industry we pay close to Rs. 900 million as taxes. We have made submissions to the government saying that there is a benefit to grow the industry. Compared to our per capita consumption and the per capita income, during the next two to three years the industry has a potential to grow by 50 to 60 percent," he said, adding that if the taxes drop, then pricing will also drop to a penetratable level. He said this will help the government as well because more consumption translates to more taxes.
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