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Japanese drugstore chain Tsuruha plans major expansion

TSURUHA, a Japanese super-drugstore chain, is going on an expansion spree with plans to open 1,000 stores in the region to cash in on free trade when the Asean Economic Community goes into full effect in 2015.

"Thailand will be encouraged to become a centre in expanding the drugstore business in Asean, which is in line with the plan set by our parent company in Japan to open up to 20,000 drugstores in the world, up from 1,000 stores already open today," Benjamas Tongprasit, executive director of Tsuruha (Thailand), a joint venture of Tsuruha and local partner Saha Group, said yesterday.

The company will also launch stores in Vietnam, Cambodia and Myanmar in two years, as those countries have a growing number of consumers aged 20-40, who are the target customers of Tsuruha drugstores. They are primarily female university students and working people.

The company is considering appropriation of its investment as well as future expansion into other markets, such as Indonesia and Malaysia. There are already 13 Tsuruha drugstores operating in Thailand, and there will be 23 stores by next March, the end of the firm's current fiscal year.

That is two stores short of the original target.

"Our plan is to open about 20 Tsuruha drugstores in Thailand every year for the next five years," Benjamas said.

The investment per store ranges from Bt10 million to Bt20 million because they come in two major sizes - 100 square metres and 1,000sqm. About 60 per cent will be in Bangkok and 40 per cent in the provinces, especially in the East and North.

About 50 per cent will be in community areas, while 30 per cent will be in shopping malls and 20 per cent in office buildings. The five-year plan for Thailand is up to 100 outlets generating Bt3 billion to Bt4 billion in annual sales. The sales target for this fiscal year is Bt300 million and for next fiscal year is Bt800 million. The company expects to become one of the top three drugstore chains in the local marketplace.

The market for health and beauty stores is expected to grow by 15-20 per cent to about Bt20 billion this year, of which only 2 per cent would be Tsuruha's share.

It is shooting for 5 per cent of the market next year.


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