P-Mart Superstore Co, a frozen food wholesale company, plans to spend 10 billion baht to expand its business both in Thailand and the Asean market over the next five years.
This P-Mart store in Ubon Ratchathani province is one of several upcountry, chosen by the company so they could serve demand from Laos and Cambodia across the border.
Of the total budget, 5 billion baht will be used to open 24 new P-Mart superstores across the country during 2015-17, bringing the total to reach 30 at the end of 2017, said business development manager Phonphat Sooknarmai.
Another 5 billion baht will be allocated to take P-Mart stores to some Asean countries such as Laos, Vietnam and Malaysia, and create a smaller store format, which will be sold to investors on a franchise basis.
The source of funds for the first 5 billion baht in investment will come from bank loans and the company's cash flow, while another 5 billion baht will be raised from the Stock Exchange of Thailand listing planned for the first half of 2017. Asia Plus Securities is P-Mart's financial adviser.
Prakorn Mahakijpokin, chief executive of P-Mart Superstore Co, said the company would focus on expanding its P-Mart superstore chain, which last year generated 40% of its total revenue. Its core business remains frozen food wholesale.
The first P-Mart superstore opened in Chiang Mai at the end of 2013. Good customer response made the company open more stores in the northeastern region, where demand for fresh and frozen food is high. It now has six stores upcountry.
The company plans to open five P-Mart stores this year. Two opened last month in Surin and Sakon Nakhon and the remaining three will open in Buri Ram and Chiang Rai in May and then in Nakhon Ratchasima in the second half of the year.
Each store will be built on two to three rai of land and require an investment of 200-300 million baht.
Mr Prakorn said it opened most of its stores in the Northeast so that they could also serve demand from Laos and Cambodia.
P-Mart started selling frozen food to wholesale customers 15 years ago before opening P-Mart superstore in 2013.
It imports frozen meat and seafood as well as other food ingredients from more than 20 countries, including Japan and Peru.
The company posted sales of 1 billion baht last year, of which 60% came from frozen food wholesale and 40% from P-Mart stores.
P-Mart's strength is its direct sales strategy. Without middlemen, its products are 5-10% cheaper than market prices, he said.
The company has seen increasing demand for frozen food, especially in the last five years because of changing consumer lifestyles.
"We plan to open P-Mart superstores in all provinces after we're listed on the stock market in 2017. After that, we plan to speed up our business by offering smaller P-Mart stores via the franchise system," said Mr Prakorn.
The company plans to extend its business to frozen vegetables and fruit as well as kitchen equipment to serve its clientele, which include the restaurant and hotel industries.