Saving delicious ramen in Thailand: Saha Group chairman’s story (24)

Boonsithi Chokwatana is the Chairman of Saha Group, Thailand’s leading consumer products conglomerate. This is part 24 of a 30-part series.

By the time the 2000s rolled around, the Thai economy had recovered from the Asian financial crisis and regained growth potential. We started venturing into the retail industry, which we had previously avoided, and the restaurant industry, from which we had withdrawn once.

As for the retail industry, we invested in supermarket operator Yaohan in the second half of the 1980s and in convenience store operator FamilyMart in the first half of the 1990s. But we only paid in small amounts, as requested. Since we were originally a wholesaler, we thought that if we broke into the retail industry, we would end up competing against our customers.

But the environment began to change. More retailers started purchasing goods directly from manufacturers, instead of indirectly through wholesale merchants. Furthermore, this is an age of too many things, and there is a great need to be in direct contact with consumers to find out what the hot sellers are.

Therefore, when we withdrew capital from FamilyMart in 2003, we took over stores for which we had supplied the land and broke into the convenience store business on our own by turning them into 108 Shops. We specialized in small outlets and boosted their number to 700 at most.

Then, we were sounded out by Lawson about a joint venture. Although 7-Eleven stores, part of the rival Charoen Pokphand empire in Thailand, had a competitive advantage in the country, it was worth trying. We established a joint venture in 2012 and began to deploy “Lawson 108” chain stores.

“We will not be able to beat 7-Eleven unless you send in persons with entrepreneurship.” When I said this to then Lawson President Takeshi Niinami, he nodded in agreement. But he moved to Suntory Holdings as its president in 2014.

I sometimes feel a bit frustrated when we often have to wait for Tokyo’s decisions regarding Lawson 108. At Saha’s suggestion, we have recently been increasing the number of small kiosk-like outlets inside the stations of the Bangkok Mass Transit System, or BTS. We would like to catch up one way or another through a strategy that 7-Eleven does not have.

In the retail business, we are also involved in the operations of stores of Tsuruha Drug, Daiso (Industries), teleshopping Shop Channel and Don Don Donki, a retail store that is now a hot topic in Bangkok.

As for the restaurant business, in the 1990s we began operating Yoshinoya, Fujiya and Ginza Lion eateries. But they did not go well at the time. As I mentioned before, eating out was still not common, and it was premature to bring these restaurants to Thailand.

But the situation has changed drastically in recent years. Thai income levels have risen, and young people today prefer to eat out; they have been accustomed to sushi and tempura since childhood.

In fact, Japanese restaurants have become the linchpin necessary to attract customers to shopping centers in and around Bangkok. As Saha has the food division, synergies can also be expected through the use of ingredients.

We reentered the restaurant industry in the hope of regaining lost ground, starting with the opening of a Tonkatsu Shinjuku Saboten eatery in 2008. We have also been involved in the operations of Washoku Sato and Kourakuen restaurants since 2014 and 2016, respectively.

Ramen chain Kourakuen had made a foray into the Thai market on its own in 2012 and increased the number of its restaurants there to six at an early stage. We attracted one Kourakuen to a commercial facility we opened in Sriracha, just north of Pattaya.

I myself had become fond of the taste of Japanese chuka soba ramen, simple and nostalgic, and often went to eat at Kourakuen. But as it turned out, the restaurants ran into financial trouble due to high personnel expenses; the eateries were staffed mainly by Japanese.

When I was informed by Kourakuen of its decision to pull out of the Thai market, we offered to take over its operations; it would have been regrettable for such delicious ramen to disappear.

Our ramen business has started taking off after rationalization efforts, including the production of homemade noodles and soups at our instant noodle factory.

We still have only around 20 restaurants in the three business categories and do not intend to open new restaurants in a hasty manner. As there is no doubt that restaurants are a growth industry, we want to develop our dining-out business into an enduring and sustainable one by utilizing Saha Group’s revenue base.

This column is part of The Nikkei’s “My Personal History” (“Watashi no Rirekisho”) series of autobiographies. The series first appeared in The Nikkei in 1956. Since then, a wide variety of world-changing individuals have written or dictated their life stories for publication.


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