UPDATE 1-Thai CP All plans 7-Eleven expansion, eyes China licence

* To spend up to $218 mln on new stores, warehouse

* Plans to seek licence for China later this year

* Will apply to open outlets in Myanmar, Laos, Cambodia

* Shares down, but outperforms over past 12 months (Adds details)

By Saranya Suksomkij

BANGKOK, Jan 30 (Reuters) – CP All, Thailand’s largest convenience store chain, outlined plans to boost investment spending and expand its 7-Eleven network to China and neighbouring countries as it looks to grow both at home and abroad.

CP All, controlled by Thailand’s wealthiest man, Dhanin Chearavanont of unlisted Charoen Pokphand Group, planned to open up to 550 new branches and warehouses in Thailand this year to help defend its 75 percent market share, President Piyawat Titasattavorakul told reporters.

The company also planned to apply for a licence for one of 10 zones in China, aiming to focus initially on the area around Shanghai.

“Within this year, I’m confident that we will get a licence from China,” Piyawat told reporters. “After we get a licence in China, we will expand further to AEC (Asean Economic Community). We will seek licences in Myanmar, Laos and Cambodia,”

CP All, which aims to have 10,000 7-Eleven stores in Thailand by 2018, is already one of the network’s largest operators. Thailand hosts the world’s third-largest number of outlets after Japan and the United States, according to 7-Eleven’s corporate website.

Piyawat said it would take the group at least three years to break even in China, but gave no details about the number of stores the group hoped to roll out.

CP All’s parent company Charoen Pokphand has close links to China and was tasked under China’s latest five-year plan with helping to modernise the country’s farm sector.

Seven-Eleven stores already operate in a number of areas in China, including Beijing, Shanghai and Guangdong.

Piyawat said CP All would apply for licences to open 7-Eleven stores in neighbouring Myanmar, Laos and Cambodia ahead of plans to create a single regional common market for Southeast Asian countries by 2015.


CP All, which is seen as a proxy for domestic consumption in Thailand, planned to spend 6.0 billion baht to 6.5 billion baht ($201 million to $218 million) this year to open 500-550 new branches and warehouses in Thailand, Piyawat said.

This is up from its previous plan to spend 5.0-5.5 billion baht a year for each of 2012 and 2013 to open 450-500 new outlets a year.

“We want to maintain our market share even though the competition will be fiercer,” he said, adding that the group aimed to have 7,370 stores in Thailand at the end of this year.

Competition in Thailand is expected to heat up after the acquisition of a stake in the Thai unit of Japanese-based Family Mart by the Chirathiwat family, which controls unlisted Central Group, Thailand’s largest retailer.

Lawson Inc, Japan’s second-largest convenience store chain has also formed a joint venture with Saha Pattanapibul Pcl, part of the Saha Group, Thailand’s leading maker and distributor of consumer products.

Other rivals include Lotus Express, run by the Thai unit of Britain’s Tesco, and Mini BigC of Big C Supercenter Pcl , controlled by France’s Casino.

CP All expected 2013 revenue to rise 13-15 percent due to the big expansion of its network, and Piyawat said he expected net profit to rise at least 15 percent this year.

According to Thomson Reuters I/B/E/S, the company, which is due to report 2012 earnings next month, is expected to report a net profit of 13.5 billion baht for 2013, up from an estimated 11 billion baht for 2012, a 23 percent rise.

In the first nine months of 2012, it made net profit of 8.26 billion baht, up 28 percent from a year earlier.

At the midday break, CP All shares were down 0.5 percent, while the main index was 0.5 percent higher. The stock has risen 70 percent in the past 12 months, outperforming a 37 percent rise in the main index. ($1 = 29.80 Baht) (Writing by Khettiya Jittapong; Editing by Alan Raybould and Richard Pullin)

(Source: http://www.reuters.com)