Yum! plans major expansion in Thailand

By 2020, Yum! Thailand’s workforce will number 28,000.

David Novak, chairman and chief executive officer of Yum! Brands, who presided over the opening of the company’s 500th store at Mega Bangna early this week, said Thailand has great potential as the country is on the way verge of greater urbanisation, and Yum! Brands will deliver to the urban lifestyles.

Thailand is only 35 per cent urbanised, compared with 80 per cent in the United States and Malaysia, so it is expected to reach 52 per cent in 2020. More customers will adopt urban lifestyles. Global food brands will be required to offer a variety of sophisticated and healthier products. Yum!’s quick-service restaurant and delivery businesses are considered as suitable to fulfil the needs of urban lifestyles.

Yum! is operating in 74 provinces. With 42-per-cent growth of both KFC and Pizza Hut over the past two years, the momentum will continue to bring strong performances in the following years.

In 2015, the Asean Economic Community (AEC) will make the region a more interesting place for investors. This will eventually lead to immense economic growth among Asean members.

"The AEC will result in a growing consuming class in Asia. Most Asean countries will become a consumption-driven economy and we will benefit from that development," Novak said.

"About 70 per cent of our profit is from the international business. However, 60 per cent of our business comes from emerging markets, including Asia," he said.

Operating 37,000 restaurants around the world, Yum! Brands posted US$35 billion (Bt1.1 trillion) in sales last year, with Asia accounting for almost half. It has achieved 13-per-cent growth per year over the last 10 years.

It expects bigger growth in emerging markets. It has fewer than three restaurants per million people on average for emerging markets, but 60 restaurants per million in the US.

China is now the biggest emerging market, with 3,800 KFCs and 600 Pizza Huts. About 600 restaurants will be opened there this year under both brands.

Thailand has 500 Yum! Restaurants, of which 430 are KFCs and 70 are Pizza Huts. About 35 per cent of the KFCs are owned by one franchisee, Central Restaurants Group. The others, both KFCs and Pizza Huts, are company-owned.

"For Pizza Hut, we have a proven business model and products that Thai customers love. We are providing good value and expect to see significant success in the next five years," Novak said. Pizza Huts are targeted to grow from 70 currently to 250 units by 2020.

Yum! Brands’ overall vision is to be the defining global company that feeds the world.

"We are a multi-international company. We want to be the multi-company that other companies want to emulate our best practices. So we are very much focused on building a famous recognition culture everyone counts on, making our brand vibrant and building a company with a huge heart," he said. "We want to open the door for people with great careers, providing jobs, and making a difference in society via our corporate social responsibility programmes such as the United Nations’ World Food Programme."

Novak is also the author of the book "Taking People with You", which sold more than 100,000 copies after its launch in January and inclusion in The New York Times’ best-seller list.

The book is based on the "Taking People with You" programme, which he has been teaching for 15 years.

"The key message of this book is nothing big can ever happen by yourself. You have to take people with you. The book is basically on action, of how you can go from beginning to end. I talk about the mindset of the leader, how you develop the plan and how you follow through to get the results by involving the team members," he said.