BJC on track to acquire more retail outlets in Vietnam

President Aswin Techajareonvikul said the deals would help the company increase its distribution points from 50,000 outlets to more than 200,000 as well as sales in Vietnam from Bt2 billion to more than Bt5 billion annually.
He said the investment capital would be from cash flow and some from loans. The company enjoys more than Bt5 billion each year in earnings before interest, taxes, depreciation and amortisation (EBITDA) and a debt to equity ratio of 1 time, which is below the target of not higher than 1.5 times. So there is still room for the company to borrow.
“We will give significance to acquiring retail businesses in the country as they are a key channel for distributing our products to consumers. Although we are quite new in that marketplace, we have an objective to penetrate many potential markets in Asean aggressively, including Thailand, Vietnam and Myanmar,” Aswin said.
Meanwhile, BJC’s intention to acquire convenience-store chain Family Mart may fail to materialise. However, the company will find other opportunities to have its own retail company, he said.
Aswin said BJC was looking for acquisition opportunities among retailers in Indochina, especially Vietnam and Myanmar, with a view to filling out the supply-chain system with downstream business and improving its bargaining power against independent retailers.
“The target is in line with our strategic expansion, which is set to cover all Indochinese and Asean markets within the next three to five years to cash in on the coming Asean Economic Community,” he said.
Aswin, who has held the top management position since January 2008, said that during his time at the helm he had been able to double the sales of the trading and manufacturing company to more than Bt30 billion by the end of last year.
Nearly five years ago, the contribution from Asean countries was just 3 per cent of overall sales, at more than Bt10 billion. That has now risen to 15 per cent.
He joined Berli Jucker in March 2007 as executive vice president in charge of corporate development and international business for the BJC Group of companies.
“We also plan to open drugstores in Thailand to be a distribution point for cosmetics and medicine products. We are negotiating with potential partners in the US, Japan and Europe to bring their products into Thailand or even make joint ventures to open branded drugstores in the local market. There is no absolute leader in drugstores in this market,” Aswin said.
He said BJC expected to open between five and 10 drugstores this year.
BJC expects to grow its sales by 15 per cent this year. The company enjoyed 19.1-per-cent year-on-year growth in the first six months, to Bt18 billion. It has also posted growth so far the third quarter. However, several worrying factors, including global recession and rising oil prices, will be monitored closely, as they have significant impact on the purchasing power of Thai consumers.
BJC posted Bt1.19 billion in net profit in the first half, up 11 per cent over the same period last year.