Foodland aims for SET within 2 years

The company, which operates 11 Foodlands, including the newest branch that opened on Thonglor Soi 8 in April, is raising its registered capital from Bt1 billion currently to Bt1.5 billion.

Somsak Teraphatanakul, chairman of Foodland Supermarket, said the new investment capital would be allocated to the company's 10,000-square-metre central warehouse and 3,000sqm supermarket on Ram Inthra Road, to be officially opened within the next two years. It will be the largest supermarket ever developed by Foodland.

The warehouse and the Ram Inthra supermarket will require between Bt500 million and Bt600 million in combined investment.

"We also plan to list on the local stock market with the aim of reducing corporate income tax. By being listed in the stock market, the company will pay only 25 per cent in income tax, down from 30 per cent being charged currently," Somsak said.

He said some of the investment capital raised by listing would be invested in future Foodland supermarkets.

"We plan to invest about Bt200 million in a new supermarket to be located on a 6-rai plot on Sukhapiban 1 Road next year. We also have a 7-rai land plot in Hua Hin and another 11 rai on Prachachuen Road [opposite Durakit Bandit University]. Both will be developed into community malls within the next one or two years, with Foodland supermarket as one of the major anchors."

Somsak said the community-mall project in Hua Hin would require more than Bt200 million in investment, with another Bt350 million for the mall project on Prachachuen Road.

He said the community malls would be developed under partnership with interested property or mall developers.

"Foodland is not a property developer, but will concentrate on retail and food businesses," Somsak said.

Foodland Supermarket achieved between Bt4.3 billion and Bt4.5 billion in sales last year. The company expects to increase its sales by 5 per cent this year despite the temporary closure of its supermarket in Sukhumvit Soi 5 for a major facelift. Closed since April, the store is scheduled to reopen in November.

"We are facing a major problem of shortage of employees, which is a major obstacle to our business expansion. The company currently employs between 2,500 and 3,000 people," Somsak said.

He added that the government's policy to raise the minimum daily wage from Bt180 to Bt300 rapidly would have a serious impact on the business.

"At Foodland, we employ about 250 people for one supermarket. About 200 of them earn the minimum wage."

He said that with the increase of the minimum wage, the company's personnel costs would be raised by about Bt3 million a month.

"The government should not raise the minimum wage rapidly at one time, but the increase should be done step by step," Somsak said. He added that such a policy would reduce the competitiveness of local business sectors, especially retail, garments and footwear, against major rivals in the region.