CRC investing B28bn in retail expansion
Retailer targets growth in Thailand
published : 7 Feb 2023 at 10:08
updated: 7 Feb 2023 at 11:03
newspaper section: Business
writer: Pitsinee Jitpleecheep
Central Retail Corporation (CRC), the country's biggest retailer, plans to invest 28 billion baht to expand its business in Thailand and Vietnam this year.
Yol Phokasub, CRC's chief executive, said the company is currently seeing various positive signs, including Thailand's revitalised economy and tourism, a recovery in purchasing power in the country, as well as the reopening of Vietnam and China.
According to Mr Yol, CRC's 28-billion-baht investment would be used to expand the company's businesses in Thailand, Vietnam and Italy across all the company's core business groups, namely food, fashion, hardline, property, and health and wellness.
Of the total investment, 70-75% will be used to expand CRC's business in Thailand, with the remaining 25-30% to be spent in Vietnam, which would focus largely on the food and property business.
Most of the budget would be used to open new stores, and renovate and remodel CRC's existing stores, while 20% of the budget would be spent on information technology.
The spending scheme is part of CRC's five-year business plan, spanning 2023-2027, to invest a total of 150 billion baht, excluding budgets for mergers and acquisitions, to increase the firm's revenue and market capitalisation by 2.5 times and increase its earnings before interest, taxes, depreciation and amortisation (Ebitda) by 3.5 times by 2027.
"CRC is now moving to the next sustainable growth via four main strategies. They are accelerating the growth of its core business groups in Thailand, Vietnam and Italy, reinventing next-gen omni retail, building new growth pillars, as well as driving partnerships, acquisitions and spin-offs," said Mr Yol.
In Thailand, Mr Yol said the company plans to open 28 new retail stores this year. Two will be department stores, with 10 stores for Thai Watsadu and a Thai Watsadu hybrid format, a home improvement and material construction unit under CRC. The firm will open 15 branches of Tops and one Robinson Lifestyle store this year.
This year it will also renovate and remodel 15 existing department stores, 16 Thai Watsadu stores, 26 Tops outlets, and one Robinson Lifestyle store. The expansion plans will bring the total retail stores under CRC in Thailand to 396 this year, up from 368 stores in 2022.
In the Vietnamese market, 5-7 new retail malls and hypermarkets are now under construction and scheduled to open in 2024, while 10 hypermarket stores will be renovated and remodelled this year.
CRC has also acquired 5-8 land plots for future development in Vietnam.
The company targets exponential growth in Vietnam, aiming, in particular, to make the Tops brand a food destination and the No.1 food omni retailer by opening 8-10 new Tops in the country this year.
It also plans to open five new outlets of Nguyenkim, a hardline store in Vietnam, and renovate 10-12 Nguyenkim stores this year.
"Though there are large uncertainties in a fragmented world, Southeast Asia's growth engine opportunity will be from the service, retail and tourism sectors,'' Mr Yol said, adding that CRC will capture the opportunity in Thailand with the rebound of tourism and the economy globally, government stimulus measures, high GDP growth, and the country's upcoming election.
Thai GDP in 2023 is forecast to grow by 3.7%, while Vietnam is expected to be Asia's fastest-growing economy with expansion of 6.2% this year.
According to Mr Yol, CRC is also committed to strengthening and expanding its business through partnerships, strategic M&A, and bringing MEB Corporation Co, the leading e-book business operator, onto the Market for Alternative Investment by launching an initial public offering on Feb 14.
With all its plans, the company expects revenue to grow by 15% year-on-year to 270 billion baht in 2023.