TTA's next taste treat in Thailand: Taco Bell

TTA's next taste treat in Thailand: Taco Bell

Pizza Hut operator eyes profitable chain

From left Chalermchai Mahagitsiri, president and chief executive of Thoresen Thai Agencies Plc; Ausana Mahagitsiri, director of PH Capital Co, the operator of Pizza Hut in Thailand; and Vorawan Phianlikhitwong, general manager of PH Capital.
From left Chalermchai Mahagitsiri, president and chief executive of Thoresen Thai Agencies Plc; Ausana Mahagitsiri, director of PH Capital Co, the operator of Pizza Hut in Thailand; and Vorawan Phianlikhitwong, general manager of PH Capital.

SET-listed Thoresen Thai Agencies Plc (TTA), owned by the Mahagitsiri family, is ramping up its food business by adding Taco Bell, the US-based Mexican fast food restaurant, to its portfolio in the fourth quarter.

The move is intended to increase the portion of TTA's revenue from food business to 15-20% over the next three years from less than 10% last year and diversify risk by relying less heavily on shipping and fertiliser.

Chalermchai Mahagitsiri, the company's president and chief executive, said a new company is being established with registered capital of 40 million baht to operate Taco Bell, which will be the second restaurant brand under TTA, after Pizza Hut.

"We are interested in Taco Bell because it is a successful food brand under Yum Group," Mr Chalermchai said. "This brand contributes up to 40% of Yum's profits. Moreover, there is an opportunity for Mexican restaurants in Thailand because there are a small number of players in the market."

He said Taco Bell is a global brand and is well-recognised among foreign tourists.

Apart from Taco Bell, TTA is looking for other opportunities in the food sector while expanding Pizza Hut to increase revenue.

Ausana Mahagitsiri, director of PH Capital Co, the operator of Pizza Hut in Thailand, said the company is set to invest 1 billion baht to double the number of Pizza Huts in Thailand to 200 by 2020.

The company plans to open 20 new Pizza Hut stores in Bangkok and surrounding provinces this year, 13 of which already opened in the first half.

The number of Pizza Hut stores is expected to reach 128 by year-end.

"There is still a lot of room to grow Pizza Hut in Thailand because the penetration rate per household is low when compared with other quick service restaurants, like in the chicken segment," Mrs Ausana said.

The penetration rate of pizza in Bangkok is 40-50% of total households and less than 40% upcountry, while the penetration rate for fried chicken outlets is 60-70%.

The average customer visits an outlet once every three weeks, compared with once every two months last year, Mrs Ausana said.

The company estimates the market size of the overall pizza business in Thailand at 10 billion baht this year, up from 8 billion in 2017.

Vorawan Phianlikhitwong, general manager of Pizza Hut Thailand, said the company is spending 500 million baht to rebrand Pizza Hut during 2018-19 to attract millennial families.

The company recently changed the Pizza Hut logo, while the store interiors have also been given a makeover.

TTA shares closed yesterday on the Stock Exchange of Thailand at 6.80 baht, down 10 satang, in trade worth 17.1 million baht.

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