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Siam Makro projects B100bn sales in 2012

Siam Makro Plc, the country’s largest operator of cash-and-carry stores, expects its sales to hit 100 billion baht next year driven by higher domestic consumption stimulated by government spending and higher wages.

“The economic problems in the United States and Europe may affect Thailand’s exports and tourism, but we will not feel that impact because we offer consumer necessities,” said CEO Suchada Ithijarukul.

Siam Makro earned a second-quarter net profit of 572.6 million baht, compared with 432 million a year earlier. First-half consolidated net profit was 1.25 billion baht (5.24 baht a share), compared with 904.2 million (3.77 baht a share) in the same period last year.

Revenue in the first half grew about 10% year-on-year to 47.59 billion baht, slightly higher than its earlier projection, reflecting new outlets, renovations at existing stores and improved merchandise selection.

Siam Makro has been the market leader in Thailand’s cash and carry business for over two decades.

The company is committed to continuing investment in the second half of this year by allocating 1.2 billion to 1.5 billion baht to open at least three new branches, bringing total to 53. Its investment budget for the year is 3 billion.

Outlets in Ayutthaya and Lampang will be versions of the original concept store serving all customers, while a new site in Hua Hin will serve only small retailers, hotels, restaurants and catering businesses, known in the trade as the Horeca market.

Each store will occupy 5,000 to 7,000 square metres and employ about 300 people.

Mrs Suchada brushed aside concerns about plans by Big C Supercenter Plc, the second-largest hypermarket chain, to branch out into the cash-and-carry segment by opening its first Big C Jumbo near the Pu Chao Saming Phrai intersection in Samut Prakan.

The store seeks the same customers as Makro: wholesalers and shopkeepers. The second branch of the Big C cash-and-carry store opens today in southern Pattaya as Jumbo Station, located in a Big C hypermarket and targeting Horeca customers.

“We are not concerned with Big C Jumbo because we established our business 22 years and our products and customer services are unmatched. Our growth percentage has outstripped the country’s economic growth every year,” she said.

Makro now plans to experiment with online shopping for its 2-3 million customers at the fourth “Makro Retailer Alliance Expo” to be held Sept 15-18 at Impact Muang Thong Thani.

Mrs Suchada said there was more room to grow in cash-and-carry. “We could open new stores in every province if the government allowed it,” she said.

Recently Makro opened a 6,900- square-metre branch in Mae Rim, its third in Chiang Mai.

MAKRO shares closed yesterday on the SET at 250 baht, up 5 baht, in trade worth 85.17 million baht.

Source: Bangkok Post

ThaiVest Editorial Team

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