Cosmos restructuring to bear fruit this year

Cosmos Bottling Corp. is confident that initiatives to restructure its operations will begin to bring in favorable results in 2005 and beyond despite a slump in the carbonated beverage industry.

The company embarked last year on "difficult but necessary" programs to ensure long-term viability and growth, Cosmos chairman Ramon S. Ang said in a report to the company’s stockholders.

"We are optimistic that the initiatives and programs we set in place last year will begin to bring in favorable results in 2005 and beyond," Ang said.

Confronted with mounting operational challenges, Cosmos integrated certain functions to focus on sales and logistics. It streamlined operations in five plants, leading to synergies, lower costs, enhanced product quality and profitability.

Cosmos sustained its position as the country’s second-leading carbonated beverage company. The company posted net sales of P10.7 billion in 2004, up eight percent from P9.9 billion in 2003. Its total assets, meanwhile, reached P11 billion.

From a pre-acquisition level of 11 percent, Cosmos’ market share went up to 22 percent as of end-2004.

Since San Miguel Corp. acquired the company from RFM Corp., Cosmos’ market share doubled from 11 percent to 22 percent as of end-2004.

Sales revenues, meanwhile, grew from P5.2 billion in 2000 to P10.7 billion in 2004.

The company is set to introduce new products this year and enhance existing brands. It is reinforcing Sarsi Root Beer’s position as the original "Pilipino root beer" and Pop Cola’s unique positioning as the original "Pilipino cola."

These plans complement efforts initiated last year that allowed Cosmos to retain its position as an industry leader despite rising costs, weaker consumer spending and heightened competition.

To address changing consumer preference and offer more affordable beverages, Cosmos rolled out a number of new products last year.

The bottler introduced the 1.5-liter variant for Pop Cola, Cheers, Sarsi, Sarsi Light, Jaz Cola, and Sparkle.

It also expanded its flavor variants for Cheers through a strawberry-flavored Cheers Ruby.