BJC to embark on Big C expansion
BERLI JUCKER Plc (BJC) announced yesterday that the company would invest Bt10 billion, of which 80 per cent would be allocated to the expansion of its Big C business.
Rami Piirainen, director for investor relations, said that the company planned to open nine new Big C Hypermarkets, four Big C Market stores, and about 200 Mini Big C outlets.
BJC’s subsidiary Big C Supercenter currently operates about 114 Big C Hypermarkets, 15 Big C Extra, 59 Big C Markets, 487 Mini Big Cs.
The remaining 20 per cent of the budget will be invested in BJC’s business expansion, with a plan to build a new packaging factory for glass bottle and cans to meet higher market demand.
The factory will begin operating in the fourth quarter of next year with a capacity of 300 tonnes a day. The new plant will allow BJC to increase its packaging capacity by about 10 per cent, up from 2,735 tonnes today.
BJC had a total debt of Bt154 billion after the first nine months of this year, of which Bt67 billion is bank loans. The company plans to issue Bt20 billion worth of bonds early in December and another Bt47 billion of bonds in 2017 to refinance existing debt and reduce interest expenses.
Piirainen said that BJC changed strategy at Big C in May this year by discontinuing sales of unprofitable products such as cigarettes and alcohol, especially to local wholesalers. The move would allow Big C to increase its profit margins.
“Big C’s sales revenue should be declined this year due to the change of our strategy by cutting unprofitable products, which account about 15 per cent of our total sales. The move allowed our gross profit in the third quarter this year to be at 17.8 per cent, |up from 12.9 per cent posted in the previous quarter,” said Piirainen.
