KUALA LUMPUR: Wellspire Holdings Bhd via its wholly owned subsidiary Wellspire Global Trading Sdn Bhd has inked a strategic cooperation agreement with Khee San Bhd’s subsidiary Khee San Food Industries Sdn Bhd to be the latter’s sole and exclusive distributor of its products as it expands into the Thailand confectionery market.
The partnership will combine the Wellspire’s infrastructure, distribution channels and marketing expertise in Thailand with Khee San’s manufacturing and packaging capabilities in the mass market consumer food and snacks manufacturing industry.
The agreement is valid from Aug 23, 2023 until Aug 22, 2026. As a start, Wellspire will distribute, import, export, sell and resell Khee San products, namely Fruit Plus and Kiss Me.
Khee San CEO Edward Tan Juan Peng said the partnership will introduce its products into Thailand, where the revenue for the confectionery market is expected to grow annually by more than 6.05%.
“Our expansion into Thailand is a showcase of our commitment to drive business growth by tapping into opportunities across the region while continuously improving our existing products as well as introducing new line-ups so as to generate sustainable value creation for our shareholders and stakeholders,” he said during the signing between Wellspire and Khee San today.
He added the group is optimistic on the snack industry as he observed that a lot of players are increasing as well as expanding its revenues.
“The snack market is very huge market if you look at the statistics. From time to time … differentiation and product innovation must be escalated in order to secure and retain the market share. That is our most challenging part,” he said.
Meanwhile, he shared that hyperinflation is among the main challenges that the company is facing with raw material prices hike, particularly sugar prices having surged to RM3.50 per kg compared with RM2.70 per kg, for manufacturers.
Moving forward, he said the group will produce and introduce more health-conscious products, namely vegan products as an alternative, to replace some of its sugar-based products.
Additionally, it will locally source sugar alternatives for its health-conscious products as “looking at the current trends it is not really favourable to all the manufacturers”.
He said that due to the hyperinflation, it has gradually increased its product prices for the past six months due to raw material rate escalation.
“The government is doing a lot of initiatives to retain the inflation, especially the necessity ingredients, such as sugar and flour. So, we hope that once the price stabilises, we will be able to cope better,” said Tan.