Saturday, February 20, 2010

Central plans B16bn outlay

Entrance of the Central Pinklao shopping Mall,...Image via Wikipedia

Central Group of Companies says it will invest 16 billion baht this year in a vote of confidence in the country's economic recovery.

The investment budget this year is slightly higher than the 15.5 billion baht spent year, said Sudhitham Chirathivat, the executive chairman of the group's CEO management board.

Of the total this year, about 90% would be spent locally and the balance overseas. Sources of funds will come from its cashflow and bank loans.

About 5 billion baht will go toward Central Retail Corporation (CRC), mostly for new projects of Robinson Department Store in Trang and Chiang Rai and ongoing projects of Robinson Khon Kaen and another outlet plus renovations to outlets of all CRC business units.

Tos Chirathivat, the CEO of CRC, said the company would sign three or four agreements for its retail outlets in China. Each requires an investment of 500-600 million baht.

Another 8.9 billion baht will be invested by Central Pattana in new projects such as the Central Festival Pattaya Beach Hotel, which is expected to open in the third quarter of 2010; the shopping projects in Chiang Rai and on Rama IX Road (Bangkok), as well as a major renovation of CentralPlaza Lat Phrao.

Central Trading & Marketing (CMG) will invest 200 million baht while 1.6 billion baht and 300 million baht will go to Central Hotels and Resorts and Central Restaurant Group respectively.

Mr Sudhitham said the group's long-term business strategy was to focus on branding as a key strength, create values for business, seek strategic alliances in both the public and private sectors, prepare business plans that suit the circumstances and established objectives.

"Apart from our own developments, we will expand our business in 2010 through mergers and acquisitions as well," he said.

Mergers and acquisitions are a key strategy that will help drive growth and success for the group, Mr Sudhitham said, adding that the group expected to seal one or two business deals by the end of this year. He did not disclose any detail of the projects, saying only that the value of each deal was about 10 billion baht.Another strategy is to expand business overseas with the main focus on the populous and fast-growing China, which shares similar cultures and customs.

Sales of Central Group in 2010 are forecast to grow by 7% to 118.8 billion baht. In 2009, its sales stood at 110.7 billion baht with net profit of 6 billion baht. Its sales increased 9% from 2008 but 1.6% lower than the target set at 112.5 billion baht due to the global economic crisis and domestic political instability.

Late last year, the group's executive committee was restructured and transformed into the newly created CEO Management Board (CMB), which comprises CEOs from the younger generation in five core business units.

The CMB comprises Mr Sudhitham as executive chairman and seven other executive directors: Tos Chirathivat (CEO of retail business), Kobchai Chirathivat (CEO of real estate), Pichai Chirathivat (CEO of trading and marketing), Gerd Steeb (CEO of hotels), Thiradej Chirathivat (CEO of food), Suthilaksh Chirathivat (CEO of the group's land bank) and Prin Chirathivat (CFO for financial management).

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