Blackmores confident of Asian growth
Blackmores Ltd, a leading Australian natural health company, seeks to boost its sales in Asia to A$50 million (1.27 billion baht) next year, with Thailand, its largest Asian market, a major driver.
Chairman Marcus Blackmore said the company would continue to expand its business in Asia because it had a lot of market potential. Asians also understand natural medicine better than Western people.
Blackmores’ group sales in the 2014 fiscal year ending June 30 were A$472 million, up 36% from the year before, and its net profit rose by 83% to A$46.6 million. Asian sales were up 26% to A$84 million.
Sales in Thailand continued to decline, by 7%, but Thailand remained highly profitable, and contributed A$6.3 million or 14% of the group’s earnings. Retail sales in Thailand in the 2014 fiscal year were 1.2 billion baht.
Asia contributes close to 20% of the group’s sales. The company estimates its Asian sales could be nearly A$150 million or about 32% of the total next year.
“Thailand is our biggest market in Asia. It has been second after Australia for many years and remains in this position today. Our growing market is China but we believe Thailand will be among top three in the future,” Mr Blackmore said during a Bangkok visit last week.
Mr Blackmore believes there is a big opportunity because Thai consumers are increasingly aware of self-medication and interested in health and what they eat.
Despite a slight decline, Thailand will grow in the future. Though competition is very fierce, Blackmores remains the most trusted natural health brand in Thailand, he said.
“There is a limit to how much we can continue to grow in Australia, our base market, so we will focus on Asia, which is a key region for Blackmores,” Mr Blackmore said.
The company expects to have doubledigit sales growth in both Asia and Thailand over the next five years.
To achieve its goal, it recently set up its Asian office in Singapore to support its business in the region, which covers operations in Australia, New Zealand, China, Thailand, Malaysia, Hong Kong, Singapore, Taiwan, South Korea, Macau and Cambodia.
“We will be implementing plans to move some of our core functions to Asia. We are also looking at potential partnerships to deepen our relationships with customers, consumers and more healthcare professionals,” Mr Blackmore said.
Blackmores plans to set up a new factory in Asia over the next five years. It is also interested in acquiring health businesses such as spa and wellness under its portfolio soon to fulfil its natural health brief.
The company will invest more in education, training, brand building and bringing more Blackmores Institutes to Asia to ensure it can meet Asian needs.