Central outlines B38bn expansion

The Central Group of Companies is poised to explore new business and investment opportunities at home and elsewhere in Asean.

Sudhitham Chirathivat (with microphone), executive chairman of the Central Group of Companies, and other executives discuss the group’s business direction at the group’s annual press conference yesterday. APICHART JINAKUL

A minimum of 30 billion baht has been earmarked for expansion during each of these next three years, the group announced at a briefing yesterday.

Prin Chirathivat, the chief financial officer, said the group this year will spend 38 billion baht for domestic and international expansion.

Another 10 billion baht has been set aside for mergers and acquisitions (M&As).

Of this year's budget, 80% will be used by the two core companies _ Central Retail Corporation (CRC), the group's retail operator; and Central Pattana Plc (CPN), the SET-listed property and retail developer.

"The remaining 20% will be used to expand our food, hotel and fashion businesses," said Mr Prin.

Some 30 billion baht will come from cash flow and the rest from bank loans and proceeds from a property fund for CentralPlaza Chiangmai and CentralPlaza Ramindra.

Sudhitham Chirathivat, the group's executive chairman, said five Robinson Department Stores and 350 FamilyMarts will be added this year along with 90 restaurants and specialty stores.

The company will also enter the realm of TV shopping this year.

Internationally, the group will open its first Central Department Store in Indonesia next year and a new La Rinascente Department Store in Rome in 2015, with new outlets for its fashion business in the works for Singapore and China.

Central is also looking for opportunities to open its own restaurant brand in Indonesia, Myanmar and Singapore.

Mr Sudhitham attributed the aggressive expansion to Thailand's high potential to become a regional investment hub once the Asean Economic Community kicks off in 2016.

This will lead to greater consumption and economic improvements that will benefit the retail and service sectors.

To maximise benefits, the government should speed up infrastructure development, tighten security for foreign tourists and clean up towns, said Mr Sudhitham.

He said the Central Group has been approached by foreign interests including Singaporean property developers and Hong Kong investors about partnerships in various businesses.

Japanese are also interested in joining hands with the group to expand fashion and food operations in Asean and specialty store development in Thailand.

Mr Prin said apart from business partnerships, the group is also in talks for 10 M&As.

At the briefing, CRC chief executive Tos Chirathivat unveiled a 20-billion-baht retail business expansion aimed at driving sales to 190 billion baht this year.

But he said CRC will put off department store development in China temporarily due to an oversupply in that country's retail and property sectors.

The group's five core businesses are retail operations, property development, hotels, fashion and food.

It estimates turnover of 227 billion baht this year, up by 24%, after all projects have begun. Of that total, 91% will come from domestic operations.

Last year, the group spent 39.6 billion baht on various projects. Revenue was 183 billion baht, up by 31.3% from 2011.

Revenue from real estate development under CPN grew at the highest rate of all the businesses at 36%, followed by retail operations under CRC (31%) and trading and marketing under the Central Marketing Group (30%).

The restaurant and hotel businesses showed 27% and 23% growth, respectively.

About the author

Writer: Pitsinee Jitpleecheep
Position: Business Reporter