Empire taking shape
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Charoen streamlining regional operations
Thai tycoon Charoen Sirivadhanabhakdi has taken another step in streamlining his regional consumer empire with plans to have his arm in Vietnam market Fraser & Neave products there and bundle hospitality assets in Singapore and Thailand into a fund.
The plans follow the appointment of Thai executives to take charge of F&N after Charoen’s Thai Beverage and TCC Assets won control of the Singaporean consumer and hospitality group earlier this year via a US$10.9-billion bid.
PhuThai Group, a distribution subsidiary of Berli Jucker, a unit of Charoen’s TCC Group, said yesterday it would launch F&N products in Vietnam next year while the logistics and distribution network will be expanded by 2015 with $40 million and $60 million budgets.
“We’re conducting a market survey for the formal launch of F&N products in Vietnam. F&N products are not yet formally launched and commercially distributed in Vietnam. The products have been just imported and sold to some outlets in the country,” said Pham Dinh Doan, CEO of PhuThai Group.
The move is part of the company’s policy to strengthen its portfolio and become the No 1 distributor and retail group in Vietnam by 2017. PhuThai targets to more than double its revenue from nearly $200 million expected for this year to about $500 million by 2018.
Under Charoen’s quest to strengthen the group’s regional presence, in March Berli Jucker launched a Bt989-million takeover of 65 per cent of Thai An, a leading distribution firm in Vietnam that owns PhuThai Group. PhuThai operates 42 Family Mart convenience stores in Ho Chi Minh City, which are now called “B’s mart”.
Half of the capital expenditure budget, or $20 million-$30 million, will go to the expansion of B’s mart convenience stores, while half will go to logistics and distribution.
“We plan to increase B’s mart convenience stores in Ho Chi Minh and six other key cities in Vietnam to about 300 by 2015. Half of them will be through our own investment and half through franchising,” he said.
Vietnam has about 250 convenience stores, most of them under five major brands – Family Mart, B’s mart, Shop & Go, Circle K and Mini Stop. PhuThai is also in discussions with some convenience store players about acquisition possibilities.
The company plans to develop other retail formats, especially supermarkets and hypermarkets, which might be completed by 2015.
Out of Vietnam’s 500,000 traditional retail outlets or “mom and pop” stores, about 160,000 stock products from PhuThai. The company expects to supply more than 200,000 such stores in four years.
PhuThai plans to develop distribution centres as well as warehouses and transportation facilities in 20 key cities.
F&N is also considering setting up a real estate investment trust made up of hospitality assets, according to Bloomberg. The company is “still evaluating the feasibility of launching a hospitality REIT,” chief financial officer Hui Choon Kit said in response to Bloomberg queries about its plans.
F&N is assessing proposals from investment banks seeking to manage a possible initial public offering of the REIT, which may take place next year, said three people with knowledge of the matter, asking not to be identified as the information is private.
The IPO could include serviced apartments that operate under the Frasers Hospitality brand and hotels owned by Charoen, the people said.
The company’s property portfolio contains residential projects, shopping malls and business parks. It also consists of Fraser Centrepoint Trust, a retail REIT, and Frasers Commercial Trust, which holds office properties in Singapore, Australia and Japan.
Frasers Hospitality has properties around the world and plans to open more serviced apartments in Europe, North America, the Middle East and Asia, according to its website.
Under Bangkok-based TCC Land Group, TCC Assets has hotels in Asia, Australia, Europe and North America, including the InterContinental hotel in Singapore, Le Meridien in Bangkok and Plaza Athenee in New York, its website states.
PhuThai expects to more than double its revenue from nearly $200 million expected for this year to about $500 million by 2018.
