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Central lifts investment budget by 24% to B19bn

Bangkok Post Feb 25, 2009

Central Group of Companies, the country's largest retail chain, will increase its investment budget by 24% to 19 billion baht this year.

This budget does not include the investment the group has made in delayed retail projects in Chiang Mai, Chiang Rai and on land bought from the British embassy next to its flagship Chidlom store.

Suthichai Chirathivat, the group's executive chairman, said the investment this year would be geared toward the three main business arms - Central Pattana (CPN), the group's SET-listed commercial property developer, Central Retail Corporation (CRC) and Central Hotels and Resorts (CHR).

About 48% of the budget, or 9.2 billion baht, will go to CRC for continuing projects such as HomeWorks on Ratchapruek and Srinakarin roads, and retail projects in Khon Kaen and Chon Buri, with Robinson Department Store being a major anchor.

Another 34%, or 6.4 billion baht, will go to CPN. About 15%, or 2.9 billion baht, is for the CHR hotel business, mainly in Pattaya and Phuket.

The remaining 3%, or 500 million baht, will go to Central Restaurant Group (CRG) - the operator of KFC, Mister Donut, Baskin Robbins and Auntie Ann's - and Central Marketing Group (CMG), the marketing arm for fashion products.

The Central Group expects to recruit about 8,000 new employees this year, mainly for CRC.

Prin Chirathivat, executive director for finance, said the funds would come from cashflow and bank loans. However, CPN and CHR are to issue debentures to mobilise funds for their expansion.

Suthikiati Chirathivat, executive vice-chairman, said the government should reduce VAT to stimulate spending and cut business tax to attract foreign investors.

He said the group projected total sales this year would grow by 11% to 112.5 billion baht. CRC expects to increase its sales by about 10%, while CPN projects 22% revenue growth. CHR and CRG both forecast a 9% rise in sales.

Suthisak Chirathivat, executive director for operations, said CMG expected its sales to rise only 1% because the company is stopping distribution of many brands. CMG achieved growth of almost 10% last year.

Central Group sales in 2008 were 101.7 billion baht, up 7% from 2007. Central Hotels' sales rose 22%, CPN 11%, CMG 10%, CRG 9% and CRC 5%.