The 1997 financial crisis shook a number of giant family-owned companies and drove many into bankruptcy. But the Chirathivat family is among the business empires that survived the catastrophe and grew even stronger in both Thailand and the global arena.
Back in 1947, Tieng Chirathivat could not have guessed that his very first, small Central Department Store would expand into a huge group of companies with 200 billion baht in revenue 67 years later.
For the past several decades the group has branched into many different businesses, including retail, hotels, real estate development, food, wholesaling and more. Recently it restructured the entire organisation with the appointment of Tos Chirathivat as the new chief executive.
The secret behind the success of the giant business empire lies within the teachings of founder Tieng, says Suthikiati Chirathivat.
“Our father Tieng taught us to love and respect each other in the family. ... On top of that, in business, he taught us that we first needed to support our own siblings before our own offspring,” said Mr Suthikiati, chairman of Centara Group’s executive board and part of the family’s second generation.
“In the past we didn’t even let the in-laws get involved in the business,” he said, “and importantly, we don’t allow our offspring to split and do their own businesses.”
It was much later when the company grew enormously that the in-laws took part in business management, together with a formal committee to supervise expansion plans.
The group’s restructuring has divided the business into eight companies: Centara Hotels and Resorts, Central Restaurants Group, Central Marketing Group, Central Pattana Plc, Central Department Store, OfficeMate, Fast Moving Consumable Goods and Hardline.
Mr Tos, the third generation who succeeded his uncle Suthitham Chirathivat, said the restructuring was necessary to move the group forward.
“Dividing the group’s businesses into eight helps make the management of each business clearer as each has a chief executive in charge,” Mr Tos said in an interview with Forbes Thailand. “Meanwhile I’m taking care of the macro picture, making sure that the business plan of each is in line with those of the entire group.”
In the next five years, the group's annual growth should stand at 15%, he said.
“The growth of any giant business will be considered low if it is less than 10%, but it will be an unsustainable growth if the figure is more than 20-30%,” he said.
For the past decade, Mr Tos has continued to acquire companies both domestically and overseas to strengthen the group’s retail business. These included the acquisition of shares in Tops Supermarket from Dutch supermarket group Royal Ahold in 2004 and a 3-billion-baht investment in the Japanese convenience store chain FamilyMart.
The group spent 22 billion baht acquiring Italy’s oldest retailer, La Rinascente, in 2011 and Denmark’s oldest retailer, Illum.
Mr Tos said the retail market in Thailand, particularly in Bangkok, has become saturated, making overseas expansion necessary.
Besides Europe, the group has continuously expanded its foothold in Asean with a plan to spend 1 billion baht this year, excluding a 10-billion-baht investment in Vietnam.
Mr Tos said the group will co-invest with a local operator in Vietnam to expand its department store, real estate and food businesses in Ho Chi Minh City, while joining with leading cigarette maker Djarum to invest in Indonesia.