Siamese Asset plans major cloud kitchen expansion
SET-listed developer Siamese Asset plans to invest 1.5 billion baht to expand its food, wellness and spa businesses between 2022-2026 as part of its strategic plan to reduce risks.
Suphon Chongchintaraksa, the company's chief financial officer, said that 300 million baht per year will be used to mostly open cloud kitchens in Bangkok and suburban areas. Cloud kitchens prepare food solely for delivery or takeout.
He said the investment in cloud kitchens will be channelled through Hybrid Kitchen Co, a wholly owned subsidiary of Siamese Asset.
The pandemic led the company to explore new business opportunities in this market by providing cloud kitchen services for food operators in the Sathon, Ram Intra and Sukhumvit Soi 48 areas in the second half of last year.
The response was better than expected, and Siamese Asset wants to offer 86 cloud kitchens to 344 food and beverage shops this year. The company aims to have a total of 494 cloud kitchens by 2026, with as many as 1,976 eateries as customers.
"Expanding our food-related business is likely to create sustainable revenue for the group in the long term and reduce risk from overreliance on the property segment," Mr Suphon said. "Based on our consultations with food operators, demand for cloud kitchens is expected to continue growing even as the pandemic abates."
He said food delivery has become common for customers of all ages. Cloud kitchens help food operators reduce their fixed costs.
Mr Suphon said the Subway and Kagonoya shabu restaurants have signed an agreement to rent 40 cloud kitchens from Hybrid Kitchen in the first half of this year.
Hybrid Kitchen is in talks to provide cloud kitchens to more food brands for sukiyaki restaurants and sandwich chains, with contracts possibly being signed in the second half of this year.
Hybrid Kitchen provides both food shops and cloud kitchens for clients to rent in shophouses and petrol stations, with a contract of 6-9 years.
In addition to cloud kitchens, Siamese Wellness Co, Siamese Asset's subsidiary, also plans to open four spa and wellness centres in Bangkok in the third quarter of this year, including one at Queen Sirikit National Convention Center and at its property projects on Sukhumvit and Rama IX roads.
Each spa and wellness centre requires an investment of 10 million baht. The company expects annual revenue of 10 million baht per branch. It aims to have a total of 10 wellness and spa branches by 2026.
With such business plans, Siamese Asset expects its total revenue to reach 10 billion baht in 2026, up from an estimated 4.5-4.9 billion baht in 2022. Of the total 10 billion baht, 90% will come from the property business and the remaining 10%, or one billion baht, will come from other ventures, including 500-600 million baht from the cloud kitchen business.
- Siamese Asset