Saha vows to spend over B10bn next year, citing likely election
Buoyed by the anticipated general election next year, Saha Group, one of the country's leading consumer goods conglomerates, says it will spend more than this year's 10 billion baht on expansion in 2019.
Speaking at the 22nd Saha Group Fair, which kicked off Thursday, group chairman Boonsithi Chokwatana said he hoped the country's economy in 2019 would fare better than it has this year, citing next year's expected general election as a confidence booster for foreign businessmen.
New economic stimulus policies to be announced by the new government will also draw more investment to Thailand next year, he said, while the country is expected to export more products -- notably to China, where several products are subject to high tariffs from the US.
"We've witnessed an improvement in consumer spending power in the first half of this year and hope that the increasing momentum will continue into next year," Mr Boonsithi said, adding that the group's sales in the first half of 2018 grew by 1-2% on the same period last year, driven by food business.
Saha Group's revenue was about 300 billion baht last year. The group spent less than 10 billion baht on business expansion during 2016-17, when the country was mired in an economic slowdown.
According to Mr Boonsithi, Saha Group will put more emphasis next year on expanding its educational and consumer products and adjusting its production facilities with new technology such as the Internet of Things to respond to the changing trade environment.
Saha Group has signed a memorandum of understanding (MoU) with a leading primary school in Britain for the master franchise to open an international school somewhere in Bangkok within the next two years.
As Thai parents are having fewer children, they are looking to be better prepared to spend and support their children with better education, as indicated by the rising number of international schools in Thailand.
Saha Group's international school, to be developed under a joint venture agreement with an unnamed business partner in the educational arena, will occupy a 10-rai plot of land and incur an investment cost of 1 billion baht.
"But what we are still worried about is the exchange rate and escalating trade war between China and the US," Mr Boonsithi said. "China may fight back against the US by making its yuan weaker. This will affect the world's overall trade, while the baht, which depends largely on the US dollar, is likely to become stronger. This will impact Thailand's exports."
In addition to the international school, the group's President Bakery Plc, the maker of Farmhouse baked goods, plans to spend 1.5 billion baht next year to build a new factory on a nine-rai plot in the Lat Krabang area.
The facility will take two years to complete. The new factory will increase the overall production capacity for Farmhouse products by 20% over the next two years.
According to Mr Boonsithi, Saha Group will spend 1 billion baht to make vending machines at an existing factory in Bang Nam Prieo, Chachoengsao province.
Vichai Kulsomphop, president of Saha Pathana Inter-Holding Plc, said his company Thursday signed an MoU with Komehyo Co to open the first Komehyo flagship store in Thailand next year.
Komehyo is a Japanese company selling second-hand products such as jewellery, watches and bags. It has 33 branches in Japan.
The second-hand stores will be operated by a joint venture company now being set up. Saha Group subsidiaries will hold a 51% stake in the joint venture, with Komehyo owning 49%.
In a related development, Pens Marketing & Distribution Co Ltd, another Saha Group subsidiary, said Thursday that it was appointed by Dao-Heuang Group, the owner of Dao coffee of Laos, to distribute Dao instant and 3-in-1 coffee in Thailand.
Dao coffee is in the process of adjusting its product formula and packaging and expects to relaunch its products with a new image next month. The company expects sales of 3 billion baht from Dao coffee by 2020.