Water Product Sales Performance
- Robust sales volume for all water and water related products for the six months ended May 2017
- Bottled water and infant water continue to experience exceptional growth as Tianmei continues to focus on marketing its own branded Fast Moving Consumer Goods through contracted stores
- Qianlifeng Water Plant expansion progressing well and will underpin supply to meet growing demand
- Aggressive marketing budget to continue to promote Tianmei's premium water products to the health conscious Chinese consumer markets
Tianmei's Water Product Business comprises of a growing range of water products including bottled water, water for infants, water dispensers, water purifiers and beauty nano spray, selling through a network of 518 retail outlets selected from Tianmei's 951 contracted stores.
Sale of water dispenser units remains strong and underpins the sales of barrelled water. Tianmei's Soft Water Barrel is a patented 11-litre water container which folds in on itself as water is dispensed out of it. It is filled in a way where no air enters the barrel, keeping the water free of any pollutants that may be transferred by air. This is unlike the traditional hard water barrels in the market which suck in air as the water is dispensed.
Tianmei is addressing Chinese consumers' concerns over contamination in traditional bottled water products sold in China. The Company's product development is underpinned by ongoing research and development to provide unique and high-quality products which cater to both mass and niche markets as identified by Tianmei. As China moves into the summer months the demand for water products increases. Tianmei is well positioned to meet the demand having secured its own water supply through the acquisition of the Qianlifeng Water Plant in February 2017.
Tianmei is increasing its advertising and marketing budget for the August quarter to $8 million during this conventionally higher demand period. Tianmei also plans to spend approximately $11.2 million during the August quarter on raw materials acquisition, increase inventory holdings for water dispenser and purifier products, as well as renewing various contracted stores entrance fees for Tianmei's Product Promotion Business. The increase in operational spending during the August quarter will be funded by sales revenue generated during the same quarter. As at the end of May 2017 the Company has cash and cash equivalent of $39.96 million.
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About Tianmei Beverage Group Corporation Limited
Tianmei Beverage Group Corporation Limited (ASX:TB8) provides promotional services to producers of FMCG goods as well as its own water products in the Guangdong province in China. Guangdong province is one of China's most developed provinces with a gross domestic product of US$1.1 trillion in 2014 and has as its capital, Guangzhou city, which is China's third largest city with a population of approximately 13 million people.
Tianmei have contracts with over 940 terminal supermarkets and convenience stores in Guangdong. Through this network of stores, the Company promotes fast moving consumer goods, including food, beverage and general grocery products for over 65 FMCG suppliers.
The Company's water products business focuses on the sale of Tianmei-branded water products, including bottled water, infant water and water dispensers through a network of over 500 retail outlets. The Company have a number of patents approved and pending surrounding it's water products and production equipment.
Tianmei Beverage Group Corporation Limited