Hitoshi Tanaka, president of Siam Daikin Sales, said yesterday that his parent company Daikin Industries recently revealed the Bt10-billion plan to increase production capacity in anticipation of the rapidly growing demand in Vietnam.

The new plant in the capital Hanoi is expected to be opened in 2018, starting with annual production capacity of 700,000 units before ramping up to one million units by 2020.

“Vietnam is the fastest growing market for Daikin. Therefore, we need to have the new factory to help the Thai factory, which is now at full capacity,” he said.

Daikin’s Sri Racha factory still remains the biggest manufacturing centre outside Japan and mainly produces A/Cs and compressors for domestic and overseas markets in Asia and Oceania, Japan, Europe and India.

The remaining Bt5 billion would be used to increase annual air-compressor production at the Sri Racha factory to 3.5 million units by next year.

Siam Daikin Sales is focusing more on expanding its distribution channels upcountry.

This month, the company opened three branches in the tourism cities of Chiang Mai, Phuket and Khon Kaen.

“After the opening of new branches, we are planning to add seven more branches by next year in various locations across the country – Nakhon Sawan, Ubon Ratchathani, Nakhon Ratchasima, Ratchaburi, Rayong, Hat Yai and Surat Thani,” he said.

Like its head office in Bangkok, the new branches will provide quick after-sales services, stock sufficient parts, include a mini showroom to display a range of products and run a training centre.

Bt100m on new branches

The company earmarks about Bt100 million for this branch expansion within two years. It has also prepared Bt400 million for marketing activities and brand-building.

Somporn Jangreenapawong, assistant managing director, pointed out that there was more room to grow in the A/C market, as penetration was only 24 per cent of households.

Penetration in Greater Bangkok was more than 50 per cent, so the market was facing limited growth.

However, growth potential appears high in other regions.

For example, the ownership rate of A/Cs in the Central region was about 30 per cent while the rates in the North, Northeast and South are still under the country’s average.

Daikin targets raising sales 22 per cent to Bt11 billion this year from Bt9 billion last year.

Greater Bangkok will remain the biggest contributor at Bt7.42 billion, up 10 per cent.

The Central region is second at Bt540 million, up 100 per cent, followed by the North at Bt740 million, up 72 per cent, and the South at Bt440 million, up 69 per cent.

By 2020, sales from provincial markets are expected to reach 73 per cent, leaving Greater Bangkok with 27 per cent. Under that strategy, the company aims to double sales from this fiscal year, which started in April.

The overall market for room A/Cs is about Bt30 billion and growing an average 7 per cent per year.

Due to the higher temperatures from January-April, the market accelerated 40 per cent while Daikin’s A/Cs sales outpaced the market, soaring 60 per cent.

Within four years, the company targets to sell at least 500,000 room A/Cs, up from 360,000.

During the same period, the market for inverter A/Cs soared 70 per cent while Daikin’s inverter A/Cs anticipated a 80-per-cent surge.

With this innovative flagship product, the company became the market leader with a share of over 30 per cent.

What is Carlsberg’s target for returning as a market leader in the premium beer segment?

Thailand is a very important market for the Carlsberg Group. The beer market is extremely large and Thai consumers enjoy all sorts of beers, from local brands like Leo to more expensive super-premium brands that you now see in upscale bars and restaurants.

The Carlsberg Group is renowned for its vast portfolio from around the world, and we see more and more opportunities to introduce popular choices to the Thai market. Apart from the Carlsberg brand, we also have Beerlao, which is becoming extremely popular, and we have recently launched Kronenbourg 1664 – the best-selling French beer in the world.

What do you think about the premium beer segment in Thailand, and do you have any plan to penetrate the standard beer market?

The premium and super-premium beer segments in Thailand will continue to grow as consumers begin to appreciate different types of beers and experiences. The Carlsberg Group will continue to participate in these segments, as we feel we have a competitive advantage with our portfolio from around the world as we hold a number-1 or number-2 position in 80 per cent of the markets we operate in.

What is the plan in the next three to five years for the Thai market in terms of marketing and investment?

The Carlsberg Group will continue to invest in Thailand and we believe the alcohol and beer markets will start to show promising growth, especially in the super-premium beer segments. Our plans are to use our portfolio to gain leadership positions in these segments.

The Carlsberg brand will continue to be an important brand as we want consumers and our customers to enjoy “Probably the best beer in the world”, and we have also seen positive signs with increasing draught beer volumes around pubs and beer gardens in Bangkok and other key cities.

We also feel that Thai men and women will find Kronenbourg 1664 Blanc matches their taste and image.

Last but not least, Beerlao continues its high double-digit volume growth, and we will continue to invest behind this brand as it is one of the fastest-growing imported beer brands in Thailand.

What is the business strategy for Carlsberg’s draught beer in Thailand?

Carlsberg has played a very important part in the beer industry. Our founder JC Jacobson discovered the methods of purifying yeast at the Carlsberg laboratories, and it was perhaps one of the most important advances in the history of beer science. Without it, we would not have a type of beer that is now 90 per cent of the market.

And this is why our draught beer in Thailand is very important. We believe it gives consumers a real taste of what great quality beer is. In the previous year alone, we have seen our draught beer volumes grow more than 20 per cent and we will continue to be aggressive with our draught agenda because we believe consumers enjoy this extremely great-tasting beer.

What’s the marketing strategy and investment plan for the regional market?

In mainland Southeast Asia, the Carlsberg Group enjoys a strong leadership position. We are market leaders in Laos with Beerlao the local power brand, in Cambodia with Angkor Beer, and in Vietnam with Huda.

We have recently begun our participation in Myanmar, with the Carlsberg brand playing in the premium beer segment and Yoma the local beer brand.

With the Asean Economic Community taking full affect, we see more opportunities for these brands being enjoyed across the region, as you can already see Thai consumers enjoying Beerlao – and vice versa, the Singha and Leo brands being offered across the region in Cambodia and Laos.

He said the company would pitch for all the main mass rapid transit lines. However, the final decision depends on the terms and conditions of the projects and their commercial viability.

BEM and BTS Group Holdings were among the companies who recently picked up the tender documents of the Mass Rapid Transit Authority of Thailand’s two monorail projects – the Pink Line Khae Rai-Min Buri route, and the Yellow Line Lat Phrao-Samrong route. Bids must be submitted on November 7.

Phongsarit, who also serves as executive vice president for operations for listed construction firm Ch Karnchang, said that since BEM already operated the heavy rail system, it would have no difficulty in operating these two monorail lines, which BEM views as feeder lines.

The company is also keen to bid the Orange Line’s east section for the Thailand Cultural Centre-Min Buri (Suwinthawong) route. Bid documents will be available on July 15.

BEM has been granted concessions for two mass rapid transit rail system projects by the MRTA, including the MRT Chaloem Ratchamongkhon Line (the initial Blue Line) Hua Lamphong-Bang Sue, and the Purple Line Bangyai-Taopoon. The Purple Line will be officially opened on August 6.

BEM was established on December 30, 2015 through the amalgamation of Bangkok Expressway (BECL) and Bangkok Metro Plc (BMCL). It was listed on the Stock Exchange of Thailand in January this year. Ch Karnchang is BEM’s major shareholder.

The Public-Private Partnership committee is expected to hold a meeting this month to consider whether to approve the resolution of the panel founded under Article 35 of the Public-Private Joint Investment Act that the MRTA should hold direct talks with BEM to allow the latter to operate the two extended routes of the Blue Line on the Bang Sue-Tha Phra and Hua Lamphong-Bang Khae sections.

The deal represents the Thai company’s first acquisition and penetration into the education sector, after its recent investment in Britain’s data-centre market with Anchorage Point in London.

Brighton, one of the largest cities in southeastern England, is strategically located about 80 kilometres south of London. Highly regarded as a leading centre for higher education, the town consists of two renowned universities (University of Brighton and University of Sussex) and 13 independent schools in close proximity.

In addition to 34,678 registered students, the city hosts and receives a large influx and existing volume of foreign exchange students that is growing year on year.

The freehold property sprawling an impressive 8.19 hectares provides offices, educational and recreational space and accommodation facilitating up to 450 pupils in six principal detached buildings.

The acquisition reflects CGD’s expectation for significant long-term growth in the lucrative education market, which has been a major contributor to England’s national wealth and economic development, contributing four times as much to the United Kingdom’s gross domestic product than agriculture.

With the expanding global economy and growing competitive educational landscape, the UK’s education market is considered to be one of the best in the world. The rapid rise in domestic and international demand for educational services indicates an attractive investment opportunity with significant potential to unlock values of growth, CGD believes.

“We have been interested in key education sectors for quite some time now, and this deal couldn’t have presented itself at a better time. The United Kingdom, and in particular Brighton, ranks amongst the leading destinations for education,” said Ben Taechaubol, chief executive of CGD.

“This investment once again underpins CGD’s commitment to seeking off-market transactions and our ability to unlock values of potential swiftly. I am confident in our capability to progress with speed and agility, as we continue to prioritise and invest in areas the market is moving towards, and align ourselves closely with our shareholders’ needs.”

The company aims to add about 70 new stores every year and reach 600 stores in total by the end of 2021.

Central Food Retail started its business in 1994 with 13 supermarkets in Central Department Stores. The company currently operates 205 stores in eight different formats including Central Food Hall (seven locations); Tops Market (85 locations); Tops Superstore (two locations); Tops SuperKoom (37 locations); Tops Daily (51 locations); and Eathai (one location).

The future expansion will focus on the Tops Market and Tops Daily formats, the company’s mid- and mini-scale supermarkets, which are flexible and can be opened at any location throughout the Kingdom.

Alistair Taylor, president of Central Food Retail, which celebrates its 20th anniversary this year, has said that the expansion will allow the company to maintain average growth of 10-15 per cent over the next five years. However, the company’s organic growth is estimated at about 6 per cent over the period, he said.

“For this year alone, we plan to allocate between Bt1.2 billion and Bt1.3 billion of investment capital in two areas,” he said.

“Between Bt200 million and Bt300 million will be spent on a system to support our growth. Another Bt600 million will be spent on new store [openings], and between Bt400 million and Bt500 million [will be spent] on renovations of our existing supermarkets.

“With the budget, we expect to increase the number of our supermarket outlets from 205 stores currently to 250 by the end of this year.”

Taylor said the company was considering opportunities for the expansion of its supermarkets outside Thailand.

“There are many opportunities occurring all the time,” he said. “Central Group recently made an acquisition deal for Big C in Vietnam. The group has operated retail businesses in many international markets including in Europe, Indonesia and Malaysia.

“There are also many opportunities we have seen in neighbouring countries. However, there is no fixed plan decided by the company at this moment.”

Taylor said from now on the company would focus on key success factors – format strategy, customers and innovation.

Central Food Retail says it has designed new brand concepts for its store formats that meet customers’ changing needs. The company focuses on its customers via many elements including customer experience, technology transformation and product quality.

“We are a customer-centric retailer. We try to find out customer insights and turn those insights into action,” Taylor said.

He said the company had developed new innovations, especially in terms of payment channels. Those innovations include e-signature, tablet, QR (quick response) codes, self-checkout, gift cards and a digital wall.

He said these were “in line with the company’s vision to be recognised as an innovative and exciting supermarket for a wide range of quality foods at good value and a friendly service”.

“People [in Myanmar] do not really know much about it [pest control],” Nicole Zycinski-Singh, co-founder and director of Titan Pest, said at a press conference recently.

“However, we know the government is definitely moving in the right direction. US engineering codes are being implemented and building know-how has been brought in from Singapore. So we believe demand for pest control in engineering and construction sectors will rise in the near future.

“Equally in sanitation, health and safety is currently a very big issue in Myanmar. The government may also regulate F&B [food and beverage] outlets on pest control in the future,” she added.

Nicole and her sibling Krystian founded the new company. Both are from the family that owns Killem Pest, which offers a range of pest management solutions in Singapore. Starting off with six staff, Titan Pest has witnessed low competition in the Yangon market, which is dominated by fewer than 10 service providers.

Nicole said the number of staff would be doubled over the next three to four months. She expects huge demand as a result of rapid urbanisation, while the number of restaurants and hotels is also rising.

“Safe and effective pest management is vital to make this city truly liveable for the long term,” she said. “Pests are not just a nuisance. They carry diseases and they are economically destructive. Our solutions create preventative barriers so that pests do not multiply to a point where buildings are crumbling because of termite infestation or there is an outbreak of dengue.”

Managing director Krystian said the firm had focused on raising awareness about the different services and solutions that are available in the market, speaking to potential customers and conducting many surveys at different sites over the past three months.

To date, the firm has drawn interest from restaurants, hotels, residential and commercial buildings, construction sites, schools, factories, industrial warehouses, and parks.

Safe and eco-friendly solutions are on offer, to control pests in general, including mosquitos and termites. Nicole said that F&B outlets in Myanmar, a main customer target aside from office buildings and shopping centres, are not required to have regular pest controls, but the company plans to seek discussions with the Ministry of Agriculture, Livestock and Irrigation and the Yangon City Development Committee soon.

Aside from restaurant hygiene, she expects the discussions to lead to solutions for schools and government buildings.

“We will partner with government and other institutions to help raise public understanding of the importance of proper pest management. Prevention is as important as the cure,” Krystian said.

The company has launched its latest coffee-mix brand, Nescafe Blend & Brew, to replace its 15-year old Nescafe 3-in-1 instant coffee mix, which will be withdrawn from the marketplace.

The coffee-mix market, worth about Bt15 billion, is a major part of the Thai instant-coffee market, but it posted relatively flat growth last year, affected by the overall economic slowdown and the lack of relevant innovations to stimulate the market’s growth.

Meanwhile, Thailand’s market for ready-to-drink coffee grew by about 10 per cent last year as Thai consumers preferred drinking coffee out of home and on the go.

Vladislav Andreev, executive manager for coffee and creamer business, said that about Bt800 million of the investment had been allocated to the upgrade of manufacturing technology and equipment at the company’s instant-coffee facilities in Chachoengsao and Bangpoo in Samut Prakan. Meanwhile, another Bt600 million would be invested in 360-degree marketing activities, including the giving away of 4 million samples, to be held throughout the year.

“The launch of Nescafe Blend & Brew, which is our latest coffee-mix innovation, started from the consumer insight, who want to enjoy a greater ground-roasted-coffee experience but don’t want to make life more complicated,” Andreev said.

He said Nescafe wanted to grow with the local coffee market and accelerate the market’s growth.

“Our local facilities will be also responsible for the export of Nescafe Blend & Brew but limited [to] the region,” he said.

Audrey Liow, chairwoman and chief executive officer of Nestle Indochina, said Thailand was a top-five market for Nescafe in the world, alongside other important markets such as Japan and Britain.

“Thailand is a great coffee market. We have strong market position in Thailand, so we should bring the best coffee to Thailand first to strengthen our base of loyal customers here,” she said.

Nescafe currently has 60 per cent of Thailand’s Bt15-billion coffee-mix market.

“With the new Nescafe Blend & Brew, we want to grow consumption of instant coffee, which stands currently at about 200 cups per consumer per year. The market is now changing and it is part of our strategy to continuously develop the market,” Liow said.