CP All sets Bt3 bn for network expansion

Corporate May 14, 2013 00:00

By KwanchaiRungfapaisarn
The Nat

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4 new centres to facilitate growth of 7-Eleven stores



 

CP All, the operator of 7-Eleven convenience stores in Thailand, has announced an investment of about Bt3 billion to build at least four new distribution centres around the Kingdom.
The opening of distribution centres in regions with high potential will facilitate the company’s expansion plan for 7-Eleven stores. It targets a network of 10,000 outlets within the next five years. 
It will also serve the huge inflow of goods from neighbouring markets into Thailand from 2015 when the Asean Economic Community comes into effect, said deputy chief executive officer Pittaya Jearavisitkul.
Founded 25 years ago, CP All operated 7,111 convenience stores as of the end of last month. Some 3,929 of the 7-Elevens are franchise operations, with the remainder owned by the company itself. 
They carry more than 15,000 items from about 3,000 suppliers. The company, which employs about 6,000 people, serves around 9 million customers a day.
Pittaya said CP All had opened its first distribution centre in Bang Bua Thong district, Nonthaburi, in 1998. A second centre was opened in Khon Kaen province in the early 2000s.
The company currently has five major distribution centres in operation. The Bang Bua Thong facility occupies 25,000 square metres and serves 2,450 stores in 16 province s in the central part of the country, while the Suvarnabhumi centre occupies 22,000sqm and serves 1,798 outlets in four major provinces in the centre of the country, as well as some parts of Chon Buri province. 
The Surat Thani centre occupies 12,000sqm and serves 845 stores in 14 southern provinces, while that in Khon Kaen covers 12,000sqm and serves 855 stores in 20 provinces in the Northeast and Phetchabun, and the Chon Buri facility occupies 10,000sqm and serves 520 outlets in four major provinces in the Eastern region of the country. 
Meanwhile, CP All has just opened its sixth distribution centre, occupying 17,000sqm of retail space in Lamphun province. 
Costing about Bt550 million, the centre will distribute 6,311 items to 643 stores in 14 provinces in the Northern region. 
“We’re constructing a new distribution centre in Mahachai, in Samut Sakhon province, which is scheduled to open next year. Costing about Bt1 billion, the centre will occupy more than 20,000 square metres of space and serve 2,000 stores in the upper part of the Southern region, the Western part of the Kingdom and Bangkok itself,” said the CEO.
The company will also open another three distribution centres: in the lower part of the Northeast, the lower part of the South and the Central region. 
They will occupy 15,000-17,000sqm and cost between Bt500 million and Bt600 million each, he added.
 
Enhanced efficiency
Chusin Jirawongsy, vice president of CP All, said the expansion of the distribution-centre network would allow the company to expand its 7-Eleven coverage more effectively, especially in rural areas. 
The company will be better able to serve its retail branches and meet the distribution lead-time objective of getting products to any 7-Eleven store around the country within 24 hours of receiving an order, he said. 
There are two types of distribution centre being set up by the company: those for dry-grocery items, and those for chilled distribution.
Pittaya said the overall convenience-store market in Thailand currently comprised about 15,000 outlets, operated by a host of players. 
However, this is still low when compared with Japan, which has between 50,000 and 60,000 convenience stores. 
He added that while CP All had 7-Eleven stores in all 76 provinces, the coverage was only between 60 and 70 per cent at the district level.