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Banrie aims for 100 coffee shops by next year

Plantation and Farm Design (Thailand), the owner and franchiser of Banrie Coffee, expects to have a 100 Banrie Coffee shops next year after its aggressive expansion at LPG gas stations nationwide.

Company president Asawin Khairatsame said Banrie Coffee has 20 shops at fuel and gas stations, after the expiry of its contract with PTT, at whose petrol stations it once had 100 branches.

He said the firm sees the crisis as an opportunity to boost gross profit margin (GPM). Banrie Coffee shops are now opening at new locations at LPG gas stations and petrol stations such as Petronas, Caltex and Cosmo.

Formerly, Banrie had GPM of 5 per cent. Now, GPM is more than 10 per cent because of lower rental charges. Asawin said the boom in LPG stations is providing a new home for Banrie Coffee. Higher oil prices have prompted many vehicle owners to install LPG/NGV tanks.

He said that the business goal for Banrie Coffee is to reach 100 branches by the end of next year. This year Banrie projects 50 branches.

"Besides expansion by the company, we will focus more on selling our franchises to investors who are looking to run coffee shops and reach break-even point rapidly," he said.

Banrie earlier preferred to expand its own network of shops, but the company has adjusted its business model by seeking potential franchisees in order to help boost the number of Banrie Coffee shops.

He said if Banrie Coffee wants to have a larger chain of branches nationwide, franchisee can help the company to achieve the target.

The company expects franchise business will contribute 20 per cent of total sales revenue.

He said the company projects sales of Bt80 million this year from an expected 50 branches.

Elsewhere in the sector, Golden Cream, the operator of Caffe' D'Oro, plans to open five coffee shops this year on an estimated budget of Bt5 million, said executive director Niramon Srisurin.

Following the expansion, the number of the firm's coffee shops this year will reach 70, she said.

The company preferred to open coffee shops through its own investment instead of selling franchises in order to maintain quality. Franchisees account for only 10 per cent of total shops, said Niramon.

She said the company has maintained sales growth this year at 10 per cent.

She said most new shops are located in Shell petrol stations, as Caffe' D'Oro has an image as a "coffee shop for travellers". Nonetheless, the company is looking to set up |coffee shops in malls, as well, she said.

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