CENTRAL GROUP plans to invest more than Bt200 billion over the next five years on the expansion of its retail and hotel properties in Thailand and abroad, especially in Vietnam, where it expects its retail business to grow by four times over the period.
For this year, the group aims for total revenue to reach Bt397.3 billion, up 14 per cent from last year.
Tos Chirathivat, the group’s chief executive officer, said the group is studying the design and concept in the development of two mixed-use commercial projects in Bangkok. A site on Rama IV Road would be developed under a strategic partnership with Dusit Thani and a site in Ploenchit Road would be undertaken in partnership with Hongkong Land. The design process and detail of the projects, occupying building space of about 500,000 square metres each, would take about two years to be fully completed. The mixed-use projects will require investment of about Bt25 billion each.
Tos said Central Group is committed to maintaining its investment at between Bt30 billion and Bt40 billion every year for the expansion of its retail and hotel properties in Thailand and potential markets abroad, especially in Vietnam and Europe.
The group will this year invest Bt47.5 billion in business expansion both at home and overseas, which is 27.8 per cent higher than last year. This excludes the possible acquisition of companies that catch the group’s interest in so-called e-economy businesses, such as e-logistics, e-finance, and other online ventures.
“We will also focus on initiating online platforms, such as in area of omnichannel sales, the e-marketplace, and Big Data, which will transform the group into a tech company,” Tos said.
He said that, for overseas expansion, Vietnam would be the group’s main focus.
He said that Central Group has grown in Vietnam by an average of 340 per cent over the past five years (2013-2017). The group is also the largest foreign retailer in the country, with five core business units: 31 malls (Big C); 59 food stores (Big C, Lanchi Mart); 49 fashion stores (Robins, DELALA, Supersports, Marks & Spencer); 79 stores for construction materials, home decoration and electrical appliances (Nguyen Kim, B2S); and three online platforms (NguyenKim.yn, Robins.vn, and B2S.com.vn).
“Our store penetration in Vietnam is now over 217 stores and with more than 700,000 square metres in combined retail space in 37 provinces. In the next five years, or by 2022, we expect to have over 753 stores, and will occupy 2.5 million square metres in 57 provinces in Vietnam,” said Tos, adding that the sales contribution from Vietnam would increase significantly from the current 13 per cent to about 20 per cent over that period.
The company has more 17,000 employees in Vietnam, serving over 175,000 customers a day.
However, Tos said that the split between the domestic and overseas sales contributions will be maintained at 70:30 over the next five years.
He said that the group will officially open its Tops Plaza in Phayao province in the first quarter of this year, followed by the relaunch of its CentralWorld in Bangkok in the second quarter. The group will also open the Robinson Lifestyle complex at Amata Chon Buri, Tops Plaza in Sing Buri, Central Phuket 2 and the Triphum theme park in Phuket, and Centara West Bay Residences & Suites Doha in Qatar in the third quarter, as well as Tops Plaza Amphur Phon, Khon Kaen and Pattalung, Zen Pathong in Phuket, Robinson Lifestyle in Chaiyaphum, and I-City Mall, which is the group’s first overseas mall, in Malaysia, in the fourth quarter.
An additional 459 stores will be opened in Thailand and Vietnam this year.
“We expect the economic climate in Thailand will be better this year. Consumers have an improved mood. Thailand will have also a general election next year. The current government has allocated huge investment into infrastructure projects as well as the Eastern Economic Corridor (EEC), which will result in a boom in related industries, including the industrial and service sector, tourism, retail and real estate,” said Tos, adding that once it was completed, the EEC will become the second Bangkok of Thailand.