Fico Group is set to spend 5 billion baht to expand its food, property and hotel businesses over the next 3-5 years.
Krit: Food business complements hotels
The budget will be divided in half to invest through the group, which runs industrial, trading, hotel and property businesses, and Evolution Capital, the operator of restaurants.
The funds will come from bank loans and cash flow.
"After being in the food business for five years, we see a lot of opportunities and want to focus more on food to balance our business risk," said Krit Srichawla, chief executive of the family-owned Fico Group.
He said Evolution Capital obtained the rights to manage Domino's Pizza in Thailand for 10 years, with an option to renew for a further decade.
The first Domino's restaurant opened on New Year's Eve on Sukhumvit Soi 22 at the same plot as the under-construction Holiday Inn.
It is the re-entry of Domino's Pizza, which first came to Thailand briefly in the mid-1990s but pulled out amid fierce competition.
Evolution Capital expects to open 75-100 Domino's stores in Thailand in the next 3-5 years, each one costing 6 million baht.
"There is still room to grow in the Thai pizza market," said Mr Krit.
"People used to eat pizza simply because it was fashionable, but now they want a better-quality pizza."
Demand for quick-service restaurants with delivery continues to increase, with deliveries constituting 60% of sales at such restaurants.
Evolution Capital operates two brands - Domino's Pizza and The Coffee Bean & Tea Leaf - through a franchise system.
The company is in talks with several other operators about obtaining the rights to run quick-service restaurants in the Thai market.
"We're also interested in acquiring a food or hotel business as a shortcut to speed our group's expansion in food," said Mr Krit.
Fico Group, which owns five hotels in Thailand managed by Accor, is buying a 33.7% stake in the SET-listed Evolution Capital, the asset manager and investment adviser.
After the acquisition is completed, Fico will transfer its food division, Fico Foods, to Evolution Capital.
Evolution, once known as Siam2You Plc, has big investments in the budget hospitality sector.
Its main assets are shareholdings in Red Planet Hotels, the rapidly growing franchisee of Malaysia's Tune budget hotels.
The company has 10 Tune Hotels in Asean and expects the number to rise to 80 in the next 3-5 years.
"The expansion of the food and hotel business is a bid to capture the huge purchasing power in the market when the Asean Economic Community begins in 2016," said Mr Krit.
The flow of international workers across Asean and the rise in tourist numbers will benefit the company's restaurants and budget hotels.
About the author
- Writer: Pitsinee Jitpleecheep
Position: Business Reporter