A Thai giant announced to invest half a billion US$ to expand BigC and Nguyen Kim supermarket chains

According to the Bangkok Post, the Central Group of Thailand will invest THB17 billion (about US$498 million) to expand its scale in Vietnam in the next five years.

Philippe Broianigo, Central Group Vietnam Chief Executive Officer, said that this money would be used to develop the sectors that the group is investing in Vietnam, especially food and electronics. Also, the Group will invest in shopping centres, hotel management and stationery stores.

Central Group Chief Executive Officer Tos Chirathivat said on August 18th that they would spend THB1 to 2 billion (roughly US$29.3 to 58.6 million) to expand the scale in Vietnam this year. This includes the plans to open 30 new supermarkets of Nguyen Kim electronics chain. The Central Group bought a 49% stake in Nguyen Kim supermarket chain last year.

In 2018, the Central Group will spend about THB7 billion (roughly US$205 million) to open 20 BigC supermarkets and Lan Chi Mart wholesale chains, along with 20 Nguyen Kim stores. The remaining THB7-8 billion (about US$205-234 million) will be spent during 2019-2021.

This ambitious plan may earn THB35 billion (about US$1.05 billion) for the Central Group in sales in Vietnam this year, which contributes about 10% of the US$11.5 billion revenue of the Group.

Vietnam is one of the two priorities of the Central Group. "We will continue to expand our business in Vietnam due to its high potential for strong GDP growth," Tos Chirathivat said. He also said that the corporation is planning to build a hotel in Ho Chi Minh City with the scale from 200 to 500 rooms.

After purchasing BigC supermarket chain at price of over US$1 billion last year, the Central Group reorganised its management structure. Last month, BigC's sales increased by 11%.

Central Group’s purchase of Big C Vietnam is not only the largest M&A deal in Vietnam last year but also marks a massive penetration by Thai goods into the Vietnamese market.

It is reported that the Central Group won this deal from Saigon Co.op, which won the gold medal of the best retailer in Vietnam, due to the disadvantages of administrative procedures. In the recent years, the Central Group has broken into several booming Southeast Asian markets such as Singapore and Malaysia.

In 2015, according to local media, Tos Chirathivat negotiated to purchase the electronics and electrical goods retailer Pico in Northern Vietnam. It was believed to resemble the contract the Central Group had signed with electronics and electrical goods retailer in Southern Vietnam Nguyen Kim earlier that year, when it purchased 49 per cent. However, both sides declined to give any comments. Later, in 2016, a source close to Central Group’s activities in Vietnam said the deal had failed.

Central Group Chief Executive Officer Tos Chirathivat comes from the Chirathivat clan, one of the leading business groups and richest families in Thailand.