McThai maps out aggressive expansion

After being taking over by cinema tycoon Vicha Poolvaraluck, McThai on Sunday announced its five-year plan to speed up expansion of the McDonald's restaurant chain in Thailand.

After several conservative years, due to changes in its shareholder structure, McThai - McDonald's local franchisee - said it would be more aggressive from now on, with plans to open between 50 and 60 new outlets in the next five years.

About half of the new McDonald's outlets will be drive-through, with the investment for a standard restaurant more than Bt10 million.

McThai currently operates 90 McDonald's outlets in the Kingdom, of which only seven are drive-through.

"I want to bring McDonald's to be the No-1 quick-service restaurant chain in the Thai market once again. It is the global policy of McDonald's to find good local partners to run its business in their own markets," said Vicha, also chairman of the Major Cineplex Group.

"As a local franchisee, we have a good understanding of the local market in terms of finding new locations and launching new products to meet the requirements of Thai consumers," he said. "McThai will be more active in creating innovative menus and building an image related to health issues. We need to create an aggressive PR strategy to let Thai consumers understand the McDonald's brand as a restaurant chain supplying healthy and quality food products in the marketplace."

Vicha's takeover of McThai has shaken up the local quick-service restaurant market.

He said he expected to use the fast-food network to further his cinema group's goal of broadening its lifestyle service range.

Vicha and his partner, Hester Chew, ex-managing director for Thailand, Singapore and Indochina of Tricon Restaurants International, have acquired the entire stake in McThai. Vicha himself owns more than 70 per cent.

Vicha is McThai's chairman of the board, while Chew is chairman of the firm's executive committee.

With almost 19 years' experience at Tricon, Chew is looking at the entire food process at McThai - from quality control to cost re-engineering, particularly on the supply side.

Chew left Tricon - now Yum Restaurants International - in 2001. Yum operates KFC and Pizza Hut restaurants.

McThai will open a new McDonald's outlet next month in the Esplanade shopping complex on Ratchadaphisek Road.

With 150 seats, McThai said the new outlet would have a totally new look, where individual visitors would feel the McDonald's brand.

McThai will also open another standard McDonald's restaurant in the Major Hollywood complex on Ramkhamhaeng Road later this year.

With its new expansion strategy, the company also plans to roll out McCafe outlets in the Thai market.

McThai managing director Rob Chiasson said the firm expected 9-per-cent growth this year, lower than the forecast of 10 per cent at the beginning of the year.

However, the company expects better growth of more than 10 per cent next year.

"We [McDonald's] are everywhere around the world and have learned from many countries. We need to be more convenient for consumers in developing our new restaurants, drive-through outlets and kiosks," said Chiasson.

He said total quick-service restaurants now accounted for about 4 per cent of the total eating category, with average growth of 10-15 per cent year on year.

McThai was formed in 1982 by Dej Bulsuk, who originally owned half, with McDonald's owning the other half.

Dej resigned as managing director of McThai in 2004 and sold his remaining 26-per-cent stake to US-based McDonald's.

The original franchise contract ended in 2004, and McThai became the sole owner and operator of McDonald's restaurants in Thailand.

Kwanchai Rungfapaisarn

The Nation