Press Conference
Central Group of Companies
The Thai economy in 2007 expanded more than in 2006, as targeted by the Government. The main thrust came from exports which managed to grow at a sustained high level throughout the year while private consumption picked up in the third quarter and continued through to the fourth quarter when it became evident that a general election would be held at the end of the year. Government spending, with a speeding up of national budget disbursements by public agencies, still played an important role in supporting economic growth in the period that private sector investment had not yet fully recovered. Economic stability in general was good with international reserves of 84.6 billion US dollars-many times greater than short-term foreign debts-at the end of November 2007. Unemployment rate was low and the public debt to GDP ratio at the end of Fiscal Year 2007 was very low at 37.8%, with 50% being the normal ratio for financial stability. However, there were still downside risks from increasing inflation rate consequent to rising oil price plus the fact that Consumer Confidence index had not fully recovered.
For these reasons, Central Group had to adjust its business plan strategies many times to cope with the risk factors and enable the Business Units to ride through the variations and maintain continuous growth for the Group.
The Board of Directors chaired by Khun Vanchai Chirathivat was responsible for policy formulation while management and supervision of the Group were under the responsibility of the Executive Committee chaired by Khun Suthichai Chirathivat, with Khun Suthikiart Chirathivat as Vice Chairman and 4 other Executive Directors, namely Khun Suthichart Chirathivat, Khun Suthisak Chirathivat, Khun Suthitham Chirathivat and Khun Prin Chirathivat.
Central Group organized its business into 5 Core Businesses
- Retail Business (CRC)
- Real Estate (CPN)
- Trading and Marketing (CMG)
- Hotels (CHR)
- Food (CRG)
Operating results in 2007 were as follows:
 Central Group as a whole had a total sales turnover of 95,400 million Baht,
representing 5 percent growth.
- Retail Business (CRC) had 4 percent growth.
- Real Estate (CPN) had 14 percent growth.
- Trading and Marketing (CMG) had no growth.
- Hotels (CHR) had 18 percent growth.
- Food (CRG) had 4 percent growth.
Major causes of underachieving the targets, set for normal circumstances, were the above-mentioned factors and circumstances. In particular, the modest Consumer Confidence index and increased cost of living due to constantly rising oil price throughout the year, effectively reduced purchasing power in general. Nevertheless, Central Retail Corporation still managed a 4% growth. And due to the continuous efforts by both the Government and private sector to promote tourism plus some timely mid-course adjustments, Central Hotels and Resorts achieved a satisfactory growth rate of 18%.
Total investment by Central Group of Companies was 12,000 million Baht,
lower than the target of 19,000 million Baht, breaking down into:-
- Retail Business (CRC) -4,200 million Baht, 35 percent of total
- Real Estate (CPN) -4,800 million Baht, 40 percent of total
- Trading and Marketing (CMG) -100 million Baht, 1 percent of total
- Hotels (CHR) -2,600 million Baht, 22 percent of total
- Food (CRG) -300 million Baht, 2 percent of total
Overall, Core Businesses of Central Group of Companies had slightly lower growth rates than targeted. Due to the oil price situation, private consumption was not high but after it became clear that a general election would be held at the end of December 2007, consumers regained some confidence and decided to spent more, spurred on also by the year-end festive season spending and extra special promotions by department stores this year, though this was somewhat tempered by the U.S. economic slowdown which sent repercussions worldwide.
2008 Economic Outlook
Private sector consumption and investment have shown a good recovering trend since the second half of 2007, supported by improving consumer confidence as a result of improving political climate. An important risk factor in 2008 remains the constantly rising oil price that may compel some businesses to reduce labour wage bills, thereby reducing consumers’ purchasing power and hamper recovery of private consumption.
Exports may decline somewhat compared to 2007 consequent to the slowing down of the U.S. economy and hence world economy, but should still be growing at 10-11%. However, even though exports and public spending may decline, such positive supporting factor as recovery of consumption and investment should more than offset them, and the Thai economy is likely to grow by 5%, more than in 2007.
Business Target of Central Group of Companies in 2008
Central Group forecasts that business of the Group as a whole will grow by 9 percent
with total sales turnover of 103,600 million Baht in 2008 , breaking down as follows:-
- Retail Business (CRC) -7 percent growth
- Real Estate (CPN) -13 percent growth
- Central Marketing Group (CMG) -7 percent growth
- Hotels (CHR) - 30 percent growth
- Food (CRG) -12 percent growth
The Group plans to invest a total amount of not less than 15,000 million Baht
in various projects of the core businesses in 2008 as follows:-
- Retail Business (CRC) -5,000 million Baht investment, 33 percent of total
- Real Estate (CPN) -6,000 million Baht investment, 40 percent of total
- Central Marketing Group (CMG) -130 million Baht investment, 1 percent of total
- Hotels (CHR) -3,500 million Baht investment, 23 percent of total
- Restaurant (CRG) -370 million Baht investment, 3 percent of total
Central Group expects total sales turnover will be 103,600 million Baht in the year 2008 based on the assumptions that normality will prevail, the political scene will be peaceful, the nation stable, and no extraordinary natural disasters.
The Group deems its investment undertaking will be large enough to contribute towards employment and driving the Thai economy to continue its stable growth.
Corporate Social Responsibility
Central Group of Companies sets a policy for the management and staff that in conducting their business they
must also be aware of corporate social responsibility in 5 major areas as follows:
- Loyalty to the Monarchy
- Religion-Culture-Customs
- Education
- Sports
- The environment
- Other
Important accomplishments in 2007 were as follows:
Loyalty to the Monarchy
- Presented money to Her Majesty Queen Sirikit for the Royal Project and Silpacheep Foundation.
- Presented 5 compact vehicles for offsite blood collection to Her Royal Highness Princess Maha Chakri Sirindhorn for use by the Thai Red Cross Society.
- Donated money in support of "Ruam Jai Pak Rak Nai Luang" Project to the Council for National Security.
- Organized for signing in books of well-wishing messages on 12 August and 5 December in the premises of Central Group companies.
- Organized activity of doing good deeds for the Royal Father as merit making for His Majesty.
- Implemented the blood donation Project entitled "6 million cc in Honour of His Majesty" as merit making for the King, and actually achieved 8.7 million cc.
- Implemented a project of selling "Rao Rak Nai Luang" key rings and presented the proceeds to the Dabos Foundation.
- Organized staff signing of well-wishing messages for His Majesty to recover at Siriraj Hospital.
- Presented money to the Dabos Foundation for construction of fishery and agriculture buildings with a multi-purpose yard at the Children of Dabos Project, Samutprakarn province.
Education
- Gave financial support to Samoeng Pittayakhom School, Chiang Mai province, to build a 300-seat refectory.
- Presented education fund to needy pupils through the Ministry of Education.
- Organized the 2nd "Central Group Junior Marketeer Project" for students to compete in becoming young marketers.
- Presented education fund to employees and children of employees of Central Group of Companies. Development of library and sickbay of Wat Phra Ngam School, Ayutthaya province.
- Organized relation building activity with educational institutes. Organized elder children holding hands of younger children.
- Construction of school buildings in honour of His Majesty and rebuilding of school fences damaged by tsunami, Krabi province.
Sports
- Provided sporting equipment for youths to Bangkok Metropolitan Administration.
Social Contribution
- Collaborated with agencies of the public and private sectors in handing out blankets to victims of cold weather.
- Assistance to agricultural growers. Central Food Retail (Top Supermarkets) in providing outlets to agricultural growers, collaborated with Agencies of the public sector in helping growers such as organizing "In Honour of His Majesty's 80th Birthday, the Miracles of Valuable Thai Fruits" with the Offices of Commercial Affairs in 9 Eastern provinces; with the Ministry of Agriculture and Cooperatives and Ministry of Commerce in selling toxic free products; and with the Ministry of Commerce in organizing "Thai Jasmine Rice, fragrant worldwide".
Awards received
- Central Hotels and Resorts received Best Local Hotel Chain Award from the 18th TTG TRAVEL AWARDS 2007.
- Robinson Department Store received "Distinguished Executive of the Year in Retail Business” from Sen Tang Thai magazine.
- Central Food Hall received "The World's Greatest Food Retailers" Award from the Grocer magazine.
- Central Food Retail received "Trusted Brand" Award from the Reader's Digest for the second consecutive year. Robinson received a certificate of honour from Her Royal Highness Princess Somsawali for cooperation in group procurement of blood. Central Hotels and Resorts received an award from the Ministry of Labour and the Green Leaf Foundation.
|
