Siam Future and IKEA launch new joint venture to develop MEGA BANGNA
A Baht 10,000 million lifestyle center in Bangna
Siam Future Development Plc together with IKEA recently hold a signing ceremony for a joint venture “Mega Bangna”, a Baht 10,000 million project featuring lifestyle home furnishing center, “IKEA Store” first launched in Thailand.
In a major investment program, Siam Future Development Plc, Thailand’s leading lifestyle Center today announces during the press conference in Bangkok to jointly develop a mega project in urban Bangkok. The joint venture, according to Nopporn Witoonchart, SF Chief Executive Officer, the project is jointly developed by Siam Future, IKANO Pte ( An IKEA owned subsidiary), and S.P.S. Global Trade Co., Ltd.
The project, with estimated value at 10,000 million Baht featuring a Lifestyle Home Furnishing Center with IKEA store for the first time in Thailand.
Nopporn Witoonchat, Chief Executive Officer of Siam Future Development (SF), said in order to handle this mega project, SF Boards of Directors has approved capital increase of Baht 600 million to existing shareholders at a ratio of 1 existing share for 1 new share, at the price of Baht 1.20 per share.
The Board also approved SF to set up SF Development Co., Ltd, a joint venture between SF, IKANO Pte. and S.P.S. Global Trade Co., Ltd., with registered capital of Baht 2,500 millions. SF and IKANO hold 49% each while S.P.S. hold the remaining 2% respectively of the new company which will be established to develop a Mega Bangna, on a 290 rais plot of land along Bangna- Trat Road.
Mega Banga, located on Bangna-Trad Km.9, Kanchanaphisek Outer Ring Road, is designed with a new concept of a one-stop mall of various products and services. Anchor tenants including the much waited for IKEA Store, a 40,000-square-meters store, and department store, branded lifestyle fashion, restaurants, IT center, ultimate entertainment center, and a very large parking lot capable of accommodating 8,000 cars. Mega Bangna’s core target group are new generation aged 20 years and above who love design and home décor, with mid-range to high income and enjoy a comfortable and modern lifestyle. Mega Bangna is projected to officially open in the third quarter of 2011 with target to attract over 40 million visitors per year.
Mr. Korn Chatikavanich, Finance Minister of Thailand, was a guest of honor at the Joint Venture Agreement signing ceremony at the Residence 301 room, Grand Hyatt Erawan Bangkok Hotel.
Mr. Tom Huzell, Managing Director, IKANO Pte. Ltd. said: Thailand is a very important market for IKEA and we are proud to be part of this exciting project. In fact Thailand is one of our production base countries in Asia for our export market.
Mr. Nopporn Witoonchat said: “This joint venture is an important step that goes along with the government policy to build trust and trigger foreign investment in Thailand. Mega Bangna will create 20,000 jobs for the locals while extending business opportunity for other local contractors
SF has a very solid track record since its first inception. We operated 29 lively and well received lifestyle centers in Bangkok and in other major resort cities. The Mega Bangna project extends and enhances our capability to offer ultimate and modern lifestyle for our valued customers., added Mr. Nopporn.
The company’s total rental space will be increased by 260,000 square meters, making the total rental space up to 500,000 square meters as projected, or a 100% growth by 2011. This would significantly boost up its total revenue in years to come.
Singapore-based Ikano, which has received the franchise rights for opening Ikea home-furnishing mega-stores, has shown its commitment to invest in Thailand despite the economic and political difficulties.
The company plans to open at least three Ikea outlets in Bangkok in the next 10 years, said managing director Tom Huzell.
Wholly owned by Luxembourg's Ikano Group, the Singaporean subsidiary now has the franchise rights for Ikea stores in Singapore, Malaysia and Thailand.
Ikea is one of the world's biggest retail chains for home-furnishing products, with more than 300 stores in 35 countries.
"We see Thailand as a great potential market," Huzell said.
He called Thailand a fantastic supplier country, one that is a strong, skilled production base for home-furnishing products. Ikea purchases Bt5 billion worth of furniture products annually from Thailand as part of its global sourcing strategy. The opening of Ikea stores in Thailand will encourage local suppliers to access Ikea's global market.
Huzell said Singapore was now ranked 12th globally for Ikea in number of visitors, and Malaysia fifth. "We expect Thailand to take a top-ranking position for Ikea, as well."
Huzell said each store would cost ค80 million (Bt3.76 billion) to open, occupy 35,000 square metres of retail space and carry 9,500 products.
The Ikano subsidiary and Siam Future Development yesterday announced a new joint venture called SF Development, which will build a Bt10-billion shopping complex called Mega Bangna, featuring the first Ikea store and expected to create 20,000 jobs.
The first Ikea will be in Mega Bangna, located on Bang Na-Trat Road Km 9, near the Kanchanaphisek Outer Ring Road.
Huzell said that in accordance with the Foreign Business Act, Ikano would own only 49 per cent of the new joint venture. Siam Future will own another 49 per cent and local furniture-maker SPS Global Trade the rest.
SPS has supplied home-furnishing products to Ikea for more than 20 years.
Siam Future Development CEO Nopporn Witoonchat said the Mega Bangna shopping complex would consist of 400,000 square metres on 290 rai of land. Construction of the mega-complex will start in the third quarter, with opening scheduled for no later than the first quarter of 2011.
The Mega Bangna complex will cost Bt10 billion, consisting of Bt3 billion for the land and the rest for construction. Its catchment area - a radius of 40-50 kilometres of radius from the venue - will cover 14 million people. The complex is expected to attract 40 million shoppers annually.
"Mega Bangna will open by 2011, and we expect it to break even in 10 years," said Nopporn.
Huzell said Ikano now operated two Ikea stores in Singapore and one in Malaysia.
"We are also interested in opening Ikea stores in other potential markets in this region, such as the Philippines, Vietnam and Indonesia," he said.
A month after announcing a 10-billion-baht megamall project in the Bang Na-Trat area, Siam Future Development Plc is already seeking a site for another major mall, which will feature the Swedish furniture retailer Ikea as its key anchor.
''We definitely are now looking for the second site although it is may be a few years away,'' chairman Oranop Jantaraprapa said at the extraordinary shareholders' meeting to approve a capital increase and bond issue to finance the first development.
Shareholders with slightly more than 88% of the company's shares approved a rights issue of more than 513 million shares, at 1.20 baht each, as well as the planned issue of up to 2.26 billion baht in bonds with a 10-year maturity.
Siam Future is in no rush to build the second mall but sees the response to the planned 290-rai Bang Na-Trat project as evidence of continuing demand for such malls in Thailand, he said.
The Swedish furniture chain has said it wants to build at least two more malls in Thailand over the next 10 years, each at a cost of about 4 billion baht.
''Ikea has said that it may look at the second mall in five years but I think it may be earlier than that,'' he said.
Nearly 70% of the Bang Na-Trat mall's 200,000 square metres of retail space is on the verge of being booked by big retailers such as hypermarkets and DIY stores, said Mr Oranop.
Siam Future is currently leasing about 240,000 sq m of retail space across its other properties.
''We expect our revenue to rise by at least 80% once the project is operational,'' said CEO Nopporn Witoonchart.
Siam Future's revenue last year was 1.7 billion baht.
''We have held talks with two department stores,'' said the CEO. ''We have a letter of intent from a hypermarket and a DIY store.''
Big C Supercenter Plc and The Home Product Center Plc are both interesting in becoming tenants, he said.
Siam Future will continue to develop its own smaller concept stores, such as J-Avenue, around Bangkok. It plans to open two stores this year on Kaset Navamin and on Rama III Road, he said.
The company is also in talks with landlords about developing other complexes, including one near the new BTS line in Thon Buri.
SF shares closed yesterday on the Stock Exchange of Thailand at 3.20 baht, up six satang, in trade worth 937,000 baht.
Major Cineplex to open huge multiplex on Bang Na-Trat
The Nation Published on July 17, 2009
Major Cineplex Group plans to invest Bt800 million to open its largest-ever 20-screen multiplex theatre and other entertainment attractions at the Mega Bang Na project by 2011.
Costing about Bt10 billion, the Mega Bang Na complex will be located on Bang Na-Trat Road, kilometre 9, near the Kanchanaphisek Outer Ring Road.
The shopping complex is being developed by the local joint venture between Siam Future Develop-ment, a subsidiary of Major Cineplex Group, and the local subsidiary of Singapore-based Ikano, which holds the franchise rights for Ikea home-furnishing stores in Singapore, Malaysia and Thailand.
Ikano plans to open its first Ikea store in Thailand at the Mega Bang Na complex.
"Our 20-screen multiplex theatre and entertainment venue will occupy retail space of more than 30,000 square metres," said Vicha Poolvaraluck, chairman of Major Cineplex Group. It will include bowling alleys and an ice-skating rink."
Somkid Tantadvanichkul, director of Siam Future Development, said the shopping complex would consist of 600,000 square metres on 300 rai of land. Construction will start in the third quarter of this year, with opening scheduled for no later than the first quarter of 2011.
"The project at the Mega Bang Na complex will come on top of the normal expansion of between 30 and 40 cinema screens annually planned by the company. We have already opened nearly 400 screens and hope to achieve 500 screens totally in the next three years," said Vicha.
He said the company would open its latest 16-screen multiplex theatre in Rattanathibet in November this year. Costing about Bt1 billion, the new complex will occupy total retail space of 65,000 square metres, including the Sub Zero skating rink, Blue-O bowling alleys and karaoke rooms.
The company will next year also open five or six attractions each at the Tesco Lotus hypermarket in the Amata Nakhon Industrial Estate and the Big C Supercentre in Mahachai Muang Mai.
"We achieved sales of about 30 million tickets last year, or nearly Bt4 billion. We expect to grow further by, between 10 per cent and 15 per cent this year, driven by a strong line-up of blockbusters," Vicha said.
The first IKEA store in Bangkok is set within a shopping centre and acts as a major anchor. The 2 level store is seamless integrated into the common spaces of the shopping centre which houses a hypermarket, departmental store, 16 screen cineplexes, fitness centre, etc.
Major Cineplex Group, the country's largest cinema operator, says it will continue its planned investments this year and next despite the prolonged political unrest.
Presenters promote offers at Major Bowl, the bowling-alley chain operated by Major Cineplex.
Chairman Vicha Poolvaraluck said the company would invest about 600-700 million baht this year to open between 30 and 40 new screens in six different locations, including Saraburi and Mahachai district in Samut Sakorn, which was completed last month.
The company will also invest 800-900 million baht next year to open another 30 and 40 new screens, including a 15-screen cinema worth 600 million baht at the new Ikea furniture complex on the Bang Na-Trat Highway.
``Similarly to other people, I'm tense and quite worried about our country's fate given the violent situation,'' he said.
However, he said, businesspeople have to find a way to ensure that life and business can go on.
Mr Vicha said that while the red-shirt protests had severely affected tourism, the impact on local consumption was modest. ``The current political turmoil has had less impact than the global economic recession and the H1N1 flu.''
Thai consumers still have good purchasing power but are adjusting their habits by going to suburban shopping malls and entertainment venues that are not in the protest areas.
Mr Vicha said Major recorded good ticket sales in the first quarter of this year with growth of about 10-15% from a year earlier.
``We saw a surprisingly good performance in April even though we closed two cinema complexes at Siam Paragon and Metropolis because of the red-shirt demonstrations,'' he said.
The company's other cinema outlets including Pin Klao, Bang Na, Fashion Island and Ratchayothin, were still doing extremely well.
Mr Vicha said the company was still optimistic about reaching its sales growth target of 10% in the second quarter, and full-year revenue growth of 10-15%.
The company has revised its business strategy in light of current political tensions by focusing on better communication with customers, utilising all channels including the internet and SMS.
เพราะฉะนั้น การประกาศเข้ามาลงทุนเปิดสโตร์ในเมืองไทยจึงถือเป็นปรากฏการณ์สำคัญที่คนในวงการ เฟอร์นิเจอร์ให้ความสนใจเป็นอย่างสูง เพราะเป็นรับรู้กันว่ากลยุทธ์ของอิเกียคือ เฟอร์นิเจอร์บ้านราคาประหยัด "IKEA is founded on a low price offer in home furnishings"
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