NPP sees return to profit as A&W business expands

“Since the third quarter [of last year], our EBITDA [earnings before interest, tax, depreciation and amortisation] has started to turn positive. We believe that this year, we could make a profit,” he said.
The listed packaging firm has diversified into food business through its acquisition of A&W Restaurants’ operations in Thailand, Laos and Myanmar from a previous franchisee in September 2015. 
The company is expected to conclude negotiations this year with the US QSR brand to obtain the master franchise licence to operate A&W restaurants in Vietnam.
NPP has an accumulated loss of nearly Bt200 million and has not paid a dividend for three years. 
Foods and packaging each contribute half of the group’s revenue, which is estimated to have exceeded Bt900 million last year. The company aims to grow by 40-50 per cent this year to reach total sales revenue of between Bt1.3 billion and Bt1.4 billion, with foods and packaging continuing to contribute around half each.
Suraphong said NPP would spend Bt150 million to add at least 20 A&W outlets this year to the current 33 restaurants.
He added that it currently took the company 19 days to open a branch, but it wants to speed that up to 15 days. 
NPP plans to increase the number of A&W outlets to 100 by 2019 when the brand will celebrate its 100th anniversary worldwide. 
Besides expanding to smaller and border provinces, NPP will also expand its A&W network to neighbouring countries, beginning with Myanmar this year.
“We’re much more confident than we were a year ago, since the brand had refrained from doing marketing activities for a long time and we were unsure if Thais would still remember,” [remember what?] he said.
Last year, it opened 17 A&W outlets and closed three.
It also plans to open four new Miyabi branches of and another four Mr Jones’ Orphanage outlets this year. 
The company is negotiating two or three more merger-and-acquisition deals for new QSR brands as well as planning to “co-develop” new branches for some local food brands.
“We may go as far as to do a noodle [restaurant business],” he said.
Besides its three QSR brands, NPP also produces ready-to-eat meals for convenience stores and other channels. It plans to export ready-to-eat Thai foods to mini-marts in |South Korea and neighbouring countries. 
NPP will also open its first 24-hour A&W restaurant this year.
“We’re the fastest-growing franchise of A&W worldwide, both in terms of same-store-sales growth and total growth, and the second-largest franchise of A&W outside the US,” he said.
The fast-food chain will cooperate with its allies and landlords to expedite its branch-expansion plan. Recently, it made a deal with Bangchak Group to set up branches in its petrol stations.
It aims to overtake its rivals and become one of the top three in the burger and fried chicken segment, which is worth more than Bt27 billion. The overall fast-food business is currently valued at around Bt34 billion and will likely grow by more than 10 per cent per annum. 
“With respect to this year’s core strategy, NPP Food will introduce A&W restaurants under the new concept ‘A&W – 100 per cent delicious since 1919’, emphasising its strengths as A&W’s exclusive and unique menu and 100-per-cent product quality, and serving the classic menu of fried chicken, waffles and A&W root beer,” Suraphong said.