Thailand: BJC keen on CLMV production partners

• May 19, 2017

SET-listed Berli Jucker Plc, owner of Big C Supercenter Plc, says it is open to partnerships with other suppliers to make products for markets in Cambodia, Laos, Myanmar and Vietnam (CLMV).
Aswin Techajareonvikul, BJC’s chief executive, said the company will put efforts into strengthening its manufacturing business by partnering with other producers to meed demand in the neighbouring countries.
“Running the Big C retail business brings us over 1,000 suppliers. This is a big opportunity to join hands with some of them to co-produce products to serve the CLMV,” he said.
The partnership with potential suppliers will give BJC, which owns 97.94% of Big C, more bargaining power and enhance its retail business from upstream to downstream in the CLMV market.
Mr Aswin said possible partnerships will cover warehouses and distribution system as well. The products are expected to mainly serve BJC’s retail stores in the CLMV market.
Recently, BJC spent almost 100 million baht to build a Cellox tissue paper production plant in Cambodia.
The company has plans to expand its retail business in the CLMV market over the next five years.
BJC’s initial plans are to open five retail stores each in Laos and Cambodia within the next three years. The company will then link its trade between Laos and Cambodia with Vietnam.
The company also plans to open five MM Mega Market cash-and-carry stores in Vietnam within the next three years. There are 19 MM Mega Market stores in Vietnam.
BJC is conducting a feasibility study on opening retail stores in Myanmar and Malaysia.
“The investment in Myanmar needs more time to reach a conclusion, and we are being careful about the plan for Malaysia because the market has a lot of players,” Mr Aswin said.
He admitted that the plan to delist Big C Supercenter from the stock market is essential as it will help reduce duplication with parent firm BJC and expenses from being listed firm.
The delisting will be completed within a year after the tender offer for the remaining 2.06% stake of Big C.
Mr Aswin said consumer purchasing power is expected to improve in the second quarter of this year, given the government’s measures to stimulate the overall economy.
In a related development, BJC plans to double food sales to 8 billion baht over the next five years.
Nutchanart Kantongcharoen, senior vice-president for food business, said it will double its food sales by extending more food products under its portfolio, ranging from its own products and those from third-party manufacturers. BJB is in talks with five manufacturers of snack, beverage and dairy products from Malaysia and Europe that want to expand to the Thai market. The portion of products from outsider manufacturers would increase to 50%, up from 20%.
During the first quarter of this year, BJC posted a net profit of 965 million baht on revenue totalling 39.2 billion baht.
BJC shares closed yesterday on the SET at 42.75 baht, up 25 satang, in trade worth 196 million baht.

Source: http://www.bangkokpost.com/business/news/1252182/bjc-keen-on-clmv-production-partners