In the face of rising costs of raw materials, Pepsi bottler Sermsuk saw its profit surge Bt2.6 billion last year to Bt18.6 billion.

Marketing director Dhitivute Bulsook said the marketing boost from last year's football World Cup and the company's continual efforts to streamline its production and distribution capacity were responsible for a 16-per-cent sales increase.

The company also reported a 1.76-per-cent increase in net profit, from Bt511 million in 2005 to Bt520 million last year.

However, that performance was shadowed by spiralling sales costs, which increased 21.7 per cent - more than the sales growth - to Bt2.4 billion. The major headaches are diesel, sugar and cola-concentrate prices.

Sermsuk also faces increased labour costs and higher taxes. Adjustments made for a higher minimum wage and greater sales costs totalled Bt242 million last year.

To offset these factors this year, Dhitivute said Sermsuk would continue to invest in its production and logistics systems, spending Bt850 million to expand its warehouses and fleets and improve its information-technology system. Of that total investment, the drink producer and distributor will spend at least Bt275 million to increase the efficiency and effectiveness of its production process.

Sermsuk's share of the carbonated-drink market jumped from 46.1 per cent in 2005 to 48.7 per cent last year. Its carbonated-drink products outperformed the market segment with an overall 5-per-cent rise in turnover, compared with the industry average of 2-3 per cent.

Pepsi-Cola continues to be the main moneymaker for Sermsuk, contributing about half of the drink giant's income. An aggressive marketing strategy was employed to maintain Pepsi's No-1 position.

Last year, Pepsi Max experienced 50-per-cent growth - a revival after its lukewarm debut in 1993. Awareness of the "sugar-free" drink rode upwards on the back of the health-consciousness movement.

Pepsi-Cola Thailand marketing director Charlie Jitcharoongphorn said Pepsi would continue to use its music and sports platforms to reach its teenage target customers. The company recently organised a Pepsi Concert in Nakhon Sawan featuring pop music heart-throbs Dan and Beam.

In the non-carbonated-drink market, Sermsuk's own brand of distilled drinking water reached No 2 in the water market. Crystal grew 45 per cent. Besides an aggressive marketing push, Crystal was able to bank on Sermsuk's extensive distribution network, Dhitivute said.

Since its Tropicana Twister was launched only last July, Sermsuk has no plans to introduce more new products this year. Instead, it will focus on pushing its 10 main brands to become or maintain their positions as the No-1 or No-2 products in their respective market categories, Dhitivute said.

Earlier this month, Sermsuk's board declared a dividend of Bt1 a share, payable on May 15.

Ki Nan Tsui

The Nation