BANGKOK: SET-listed Berli Jucker Plc. (BJC), the trading company owned by billionaire Charoen Sirivadhanabhakdi, has set its sights on becoming a leading operator in Asean in terms of production, sales, logistics and retail distribution.
CEO Aswin Techajareonvikul said BJC will focus on building stronger market infrastructure and new business models to grow sustainably. Its distribution channels will be used to understand consumer insights. “[The year] 2016 is the year of investment to build infrastructure, including distribution centers and retail, trading and online channels,” he said.
BJC aims to drive the market by setting Thailand as its main base, supported by a second base in Vietnam, Lao PDR or Cambodia. It aims for a 50-50 sales split between domestic and international markets over the next five years. Its international sales in 2015 were worth 4.45 billion baht, contributing 22 percent of overall sales.
BJC’s expansion in the Asean Economic Community (AEC) will cover upstream, midstream and downstream businesses. With a focus on consumer supplies and products, it aims to mobilize investments through alliances, joint ventures or consolidations. The company will focus its expansion on Thailand, Vietnam, Lao PDR, Myanmar, Cambodia and Malaysia. After the launch of the AEC at the end of 2015, there have been no big movements in the market because of leadership changes in Myanmar, Lao PDR and Cambodia.
“The AEC will have more linkage after the new leaders have clear policies for their countries. We expect a better impact from the AEC next year,” Aswin said. BJC will continue to expand its retail business in Vietnam, where it changed the name of Metro Group to MM Mega Market Vietnam on January 6.
Expansion plans for both MM Mega Market stores in Vietnam and Big C in Thailand are under consideration. Aswin said BJC will allocate 4 billion to 5 billion baht to expand its business this year, mainly in the domestic market. Consolidated revenue of BJC last year was 42.8 billion baht, up 2.9 percent, thanks mainly to the growth of glass and can businesses in the packaging supply chain.
BJC has opened MM Mega Market stores in Thailand, under the operation of TCC Logistics and Warehouse. One is in Nong Khai province to boost trade between Thailand and Lao PDR and the second branch is in Sa Kaeo province for trade between Thailand and Cambodia.
BJC plans to open at least 15 new branches by 2019, especially in border towns and big cities including Bangkok. The company expects to increase its 2016 revenue at a double-digit rate after seeing a gradual improvement in consumer spending in the first quarter. Separately, Zalora, the fashion-focused e-commerce site backed by Rocket Internet, is selling its businesses in Thailand and Vietnam to Thai retailer Central Group.
“Acquiring Zalora will support our move into online commerce. Online shopping has vast opportunities in this region,” a source said. The group had been tipped to enter online commerce for some time, and sources say it struck a deal to buy the businesses from Zalora for about $10 million each.
Online commerce is estimated to account for around 3% of all commerce in Southeast Asia. While that figure has grown in recent years and stands to increase as the internet becomes more widely accessible, it remains a nascent segment with high growth potential. Central Group’s assets, which include multiple shopping malls and national department store chains, are worth close to $10 billion and it employs about 70,000 people.