Home Product Centre, operator of HomePro stores, has set aside a Bt350-million marketing budget to boost its sales growth to 20 per cent this year, despite a drop in consumer spending that saw the size of the average purchase fall by 4.16 per cent last year.

The company is also expanding its branches throughout the Kingdom in what it sees as a race against introduction of the new retail business law, which it believes will zone retail-business expansion.

President Khunawut Thumpomkul said consumers were spending less on home decorative items following the country's economic slow-down and political uncertainty. Average spending per purchase reached Bt2,400 in 2005 but dropped back to Bt2,300 last year.

Therefore, the company will increase its marketing expenditure to Bt350 million, from last year's Bt300 million, in order to meet its target of 20-per-cent sales growth.

Home Product Centre's sale revenues grew 16.48 per cent to Bt14.2 billion last year, thanks to the opening of six new branches, giving it a total of 26 outlets. Of that total, 20 older branches generated Bt12.3 billion, while Bt1.9 billion came from the six new branches. The company reported a net profit of Bt608.61 million last year, up 20.57 per cent.

Khunawut said a five more branches would open this year at a total cost of Bt3.2 billion, part of a Bt5.7-billion investment plan established last year. The first of these has already opened, on Phetkasem Road, and the next two, to be located on Ram-Indra Road and in Chon Buri, will open in the first half of the year. The other two new branches will open upcountry in the second half.

Half of the investment budget will be either borrowed from a bank or raised by a new debenture issue, and the rest will come from the company's cash flow, he said.

"We must expand our branches be-

fore the new retail business law is im-plemented, because it will focus on zoning retail-business expansion," said Khunawut.

The company plans to have 40 branches in Bangkok and upcountry by the end of 2010. Once this is achieved, it expects to take a 35-per-cent share of the Thai home-improvement market, which estimates say will be worth Bt140 billion a year by then.

Research by the Office of the National Economic and Social Development Board and Commerce Ministry shows HomePro currently enjoys a 12-per-cent share of the home-improvement market, which was worth Bt117 billion at the end of last year.

"We believe our business growth will meet our target, as long as we can expand our business and follow our plan," he said.

However, the company's ability to do so will depend on the regulations contained within the new retail business

law. If the Act is stricter about retail business expansion, Home Product Centre may not be able to pursue its plan, Khunawut said.

Somluck Srimalee

The Nation