Thailand - Aeon eyes major Asean expansion

Aeon Thana Sinsap (Thailand) plans aggressive business expansion both here and in neighbouring countries.

The leading Japanese non-bank company is using Thailand as a centre to expand its businesses in other Asean countries.

Aeon Thana Sinsap plans to offer more financial services in Cambodia, Vietnam, Laos and Myanmar, starting with secure hire-purchase loans, said director Jun Suzuki, who joined the company in April.

He said the company will also increase capital in its wholly owned Cambodian subsidiary next year to support the expansion.

Aeon has only one branch in Cambodia, but loan growth there has been strong at 10% per month on average on the back of double-digit economic growth in recent years.

The 10-month-old Cambodian branch had a customer base of 6,000 as of June, projected to exceed 10,000 by year-end.

"We expect the Cambodian branch to break even in two years instead of three as forecast earlier based on the normal growth rate of overseas branch expansion," said Mr Suzuki.

After Cambodia, Aeon will increase capital in another wholly owned subsidiary, Aeon Microfinance (Myanmar).

Aeon extended hire-purchase loans there through a representative office for a year before opening the subsidiary last month.

Also last month, Aeon set up another wholly owned unit, Aeon Leasing Service (Lao), which will start operating in Laos next year.

In Vietnam, its subsidiary has operated two branches for two years, and they are expected to break even in 2014.

Mr Suzuki said the Aeon Group's business strategy called for Aeon Thana Sinsap to expand into the Greater Mekong Subregion in 2006-09.

Aeon Mall, the group's retail business unit, also plans to expand into the region to support the group's financial business.

A shopping mall under the Aeon brand will open in Cambodia in 2014 and a credit card introduced later. The credit card will also be launched in other regional markets, said Mr Suzuki.

"Aeon Thana Sinsap's profitability should improve significantly from 2014-15 from the expansion," he said.

In Thailand, where it targets 10% growth this year, total debt outstanding is about 46 billion baht.

The company also plans to offer "digital money" to tap strong growth in the middle- to upper-market segment.

Shares of AEONTS closed on the Stock Exchange of Thailand at 67.50 baht yesterday, down 1.25 baht, in trade worth 6.63 million baht.

Somruedi Banchongduang

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