CPN budgets Bt25.3-bn for seven projects

The expansion is aimed at cashing in on the coming Asean Economic Community (AEC), which will be effective in 2015 and encourage greater flows of shoppers from neighbouring countries, including Laos, Burma, southern China, and Malaysia.

The seven new retail projects are to be opened this year or in 2013. One of them, the Centara Hotel and Convention Centre Udon Thani, opened in January. CentralPlaza Udonthani is to have a soft opening on March 27, while CentralPlaza Lampang is to be opened in December.

Next year, CentralPlaza Ubonratchathani is to be opened in April, CentralFestival Hatyai in October, and CentralFestival Chiangmai in November.

These new developments will raise CPN’s combined gross floor area from the current 4.2 million square metres to more than 5 million square metres by the end of next year and help reinforce the company’s status as Thailand’s No 1 retail developer and make an impact on the global stage.

Kobchai Chirathivat, CPN’s president and chief executive officer, said the company had seen the growth potential of major cities across Thailand and realised that by investing in retail projects in such strategic locations, it could have great impact on these provinces and complement them.

"We have seen consumers in many provinces enjoy higher spending power and enter an urbanisation process to a new, modern lifestyle similar to Bangkok’s, thanks to the government’s injection of money into the system, especially in helping flood-affected people, as well as the arrival of social networking, which creates a rapid transfer of tastes and preferences among the people," Kobchai said.

"By developing and operating new shopping malls in those cities, we will be maintaining a diversified investment portfolio and helping to spread economic growth and create jobs. The seven new projects are all located strategically in areas where purchasing power is high."

The new retail developments will bring the total number of malls developed by CPN to 23 by the end of 2013, up from 18 currently.

In total, the seven new projects will create between 25,000 and 30,000 jobs.

Kobchai said the AEC would force all member countries in Asean to open up and deal with more intense competition, including in the retail sector.

"We have been studying [the situation] and foreseen that the retail market will be competitive when the AEC is implemented, as any rival can move from one country to the others to compete and gain market share. CPN will not just be defensive in protecting our share of the local market, but also expand into other markets in the region," he said.

Nattakit Tangpoonsinthana, executive vice president for marketing at CPN, said developing and operating new shopping malls in these strategic provinces would encourage economic growth and tourism in those areas.

"Our malls in Chiang Rai, Chiang Mai and Lampang will draw shoppers from Laos, Burma and southern China, while our retail complexes in Udon Thani and Ubon Ratchathani will draw shoppers respectively from Vientiane and Champasak, and the mall in Hat Yai will draw shoppers from Malaysia," Nattakit said.

Kobchai said CPN was planning to continue investing and growing its business this year because there are signs that Thailand’s economy will continue to recover, thanks to various positive factors such as the government’s economic stimulus measures and increased consumer spending. In addition, gross domestic product is expected to improve significantly.

He said CPN was streamlining its working process to ensure that it will be more efficient and there is a clear line of command in all major divisions, including marketing, sales, accounting and finance, which will work in more integrated ways. New "enterprise resource planning" software will be implemented by midyear to consolidate information among divisions for better efficiency and more integration.

Kobchai said CPN expected revenue to increase 25 per cent over last year. The company expects to achieve at least 15-per-cent annual growth in the future.