Malaysia’s beverage producer, Power Root Bhd has recently signed a co-investment agreement with Thailand’s SAPPE Holding Thailand Co. Ltd to manufacture, sell and distribute the former premixed coffee ‘Frenche Roast’ in Thailand.
Power Root and SAPPE will invest a total of RM2.66 million (US$600,000) in working capital and the project is targeted to be completed by end-2024.
Power Root will own a 60% stake in the joint venture (JV) and SAPPE the remainder. Power Root will deliver raw materials and the packaging of ‘Frenché Roast’ to SAPPE, which will then pack them into finished goods for distribution in Thailand.
Power Root Co-Chairman Tengku Datuk Setia Putra Alhaj said the company is looking forward to gaining momentum in the Thai market. With SAPPE’s stronghold in ‘3-in-1’ coffee, Power Root instant coffee will have access to a market of Bt 20.5 billion (US$601.5 million) within Thailand’s Bt 33 billion (US$968 million) at-home coffee consumption market.
At the same time, Power Root will also help distribute SAPPE’s star performing product, ‘Mogu Mogu’ in the Malaysian market. ‘Mogu Mogu’ is a fruit juice product mixed with coconut jelly, and is scheduled for launch in the Malaysian market in September.
Power Root CEO Wong Tak Keong said the co-investment agreement between the 2 companies also involved sharing marketing expertise and collaborating on export market strategies.
SAPPE CEO Piyajit Ruckariyapong said SAPPE is optimistic about its collaboration with Power Root as both partners share aligned values of supporting healthy lifestyles by introducing innovative and high-quality beverages.
Power Root also aims to increase its revenue from overseas market from the current 40%. SAPPE, on the other hand earns 70% of its revenue from overseas markets.