Central ambitions
Group may bid for Big C assets in Vietnam
Central Group denies ambitions to establish its own hypermarket store chain.
Central Group yesterday insisted it is not seeking to establish its own hypermarket chain to counter TCC Group’s entry into the big retail segment with the recent acquisition of a major stake in SET-listed Big C Supercenter Plc.
Instead, it is considering buying Big C store operations in Vietnam from Casino Group, a leading French retailer.
Tos Chirathivat, the group’s chief executive, said Central did not have any plan to sell its 25% stake in Big C Supercenter in Thailand after TCC Group’s Berli Jucker Plc successfully bought a 58.56% stake in Big C.
Berli Jucker will make a tender offer for the remaining shares in Big C soon.
“The hypermarket business has entered the mature stage and its growth may not be as high as in the past 20 years, but we won’t sell our Big C shares,” Mr Tos said.
Central will not create a new hypermarket store brand because it already has Tops Superstore, which is similar to Big C.
Mr Tos said he would decide on March 10 whether Central would enter bidding for Big C assets worth 20 billion baht in Vietnam.
“We have not made our decision yet because there are several factors to be considered carefully, including the complicated process of mergers and acquisitions over there,” he said.
A market analyst said it was possible Central would join the bidding because Vietnam is one of the group’s strategic investment countries in the Asean region.
Central’s retail business in Vietnam has more than 6,000 staff and generated revenue of US$600 million last year. If Central wins the bid for Big C assets, its business value will double to 40 billion baht overnight.
Mr Tos said the group would put more focus on opening new branches and renovating its Thai stores while expanding some new stores in Cambodia, Laos, Myanmar and Vietnam.
“We will invest cautiously because we are concerned about the impact on the world economic situation from the Chinese slowdown, falling oil prices and the volatility of foreign exchange,” he said.
The group plans to spend about 39 billion baht this year, 30% more than last year, to open new shopping centres, department stores and other outlets nationwide and renovate some stores.
It also plans to open five new hotels and some convention centres in destinations including Pattaya, Chiang Mai and Koh Samui.
It has signed management contracts with 29 new hotels with 6,716 hotel rooms.
Centara Muscat Hotel in Oman, Centara Grand West Bay Hotel Doha in Qatar and Centara Grand Lykia World Resort & Spa in Turkey will be opened in the third quarter.
The group also plans to invest in two more four-star hotels in the Maldives and a four-star hotel in Dubai.
Central Group has 70 hotels with 14,583 rooms in 11 countries.
The group will allocate 10.4 billion baht to renovate its department stores in Europe from 2016-20. About 3.6 billion will be used for La Rinascente in Italy, 2.4 billion for Illum in Denmark and 4.4 billion for three stores under the KaDeWe Group in Germany.
Last year, Central’s revenue totalled 283 billion baht, up 13.5% from 2014. The group projects to increase its revenue by 18.9% to 337 billion baht this year. About 76% of sales will come from Thailand.