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Black Canyon brewing up regional expansion

Apr 11, 2014

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Black Canyon (Thailand), one of the country’s largest coffee and restaurant chains, has stepped up regional expansion plans through joint ventures with local partners instead of the franchise format.

The company has formed a joint venture with a Cambodian partner, and the first Black Canyon will open at Aeon Mall, the largest shopping complex in Phnom Penh, in the third quarter.

The new joint venture, B.C. Coffee & Cuisine, was set up to operate Black Canyon in Cambodia.

The local partner and Black Canyon each own half of the joint venture.

Pravit Chitnarapong, president and chief executive of Black Canyon (Thailand), is confident the move will speed up its expansion within Asean at a faster pace after the launch of the Asean Economic Community late next year.

The business model was changed from franchising to joint ventures to assure local partners of its capability and intention in expanding the business in the future. Operating the business together enables partners to solve problems and find further opportunities to expand operations thanks to a more effective co-management style, Mr Pravit said.

This differs from the franchise format, in which an average of five new Black Canyon coffee and restaurant chains will be launched each year in Asean.

“Under the joint venture approach, it is possible to open up to 10 new branches per year,” he said.

Black Canyon began its Singaporean operation 11 years ago under the franchise pattern.

It now has 53 Black Canyon branches in eight countries besides Thailand: Cambodia, Indonesia, Malaysia, the Philippines, Myanmar, Singapore, Laos and the UAE.

Mr Pravit said the company plans to open new branches in the Philippines, Cambodia, Sri Lanka as well as Indonesia this year.
On the domestic front, the company plans to open 15 branches nationwide in different locations such as PTT petrol stations, shopping malls, hospitals, airports and hypermarkets.

The new stores, which cost 3-4 million baht each, will come from the company’s own investment or franchise basis.

Black Canyon now has 260 Thai branches in major cities such as Chiang Mai, Chiang Rai, Krabi, Hat Yai, Khon Kaen, Udon Thani, Surat Thani and Nakhon Si Thammarat as well as at airports.

Mr Pravit said the current political turmoil has had only a minimal effect on the food industry.

Source: Bangkok Post

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