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SORKON Ready for Full-Scale Offensive in QSR Segment, Employs Professionals, System to Support Local, Int’l Expansions through Franchising
17 November 2016

SORKON has hired professionals to strengthen its management team and introduced a management system for its QSR business to prepare for an aggressive campaign to be waged using the brands “ร้านข้าวขาหมูยูนนาน” through local and international franchising and “ร้านแซ่บ คลาสสิก” (for Isan-style restaurants) and with new Thai dishes and planned delivery service, which are expected to enhance future growths. Its total revenue for the first nine months of 2016 stood at THB 1.95 billion and its net profit at THB 60.15 million.

Mr Charoen Rujirasopon, chief executive of S. Khonkaen Foods Plc, or SORKON, Thailand’s major producer and supplier of processed meat products, revealed that 2016 is SORKON’s year of investments as the company prepares itself for an aggressive expansion in the quick service restaurant (or QSR) segment in 2017 with a goal to post exponential growths for the restaurant-chain brands “ร้านแซ่บ คลาสสิก” (ran saep classic) and “ร้านข้าวขาหมูยูนนาน” (ran khao kha mu Yunnan), recruiting professionals to strengthen the management team and employing management technology systems to enhance operating efficiency to support planned expansions both locally and internationally, and both by direct investment and through franchising.

Concerning the planned launches of new Isan-style “ร้านแซ่บ คลาสสิก” restaurants, SORKON will add two directly invested restaurants and two franchisee restaurants to its existing portfolio of eight restaurants. It has also relocated a number of the existing restaurants to more lucrative locations (e.g. from Silom district to The Emquartier shopping complex, and added some popular dishes among Thai and international diners (e.g. Kaeng Matsaman, Phat Thai, etc.) to the restaurants’ menus, which have doubled the restaurants’ average daily sales.

As for “ร้านข้าวขาหมูยูนนาน” restaurants, the company will have its franchisees run small-sized restaurants with an initial capital requirement of THB 89,000 each to ensure their easy reach within local communities, and it will turn all its existing 32 restaurants into franchisee ones. In addition, it will offer new dishes (e.g. dim sum, vegetable dishes, etc.) to add variety. In Q4, it will have one newly opened restaurant in Laos and two in Cambodia, which means that this yearend the total number of its “ร้านข้าวขาหมูยูนนาน” restaurants in Thailand and elsewhere will have reached 35.

“This is our year of investments as we are gearing ourselves for an aggressive campaign in the QSR business. We have appointed professionals to our team to assist us in business planning. And we have upgraded our system to enable us to increase franchisee restaurants efficiently, and relocated some existing restaurants to more promising locations. These, we believe, will allow us to post exponential growths for the QSR segment,” said the CEO.

He added that the above activities increased SORKON’s selling, general and administrative (or SGA) expenses year-on-year, resulting in a year-on-year decline in net profit for the first nine months (Jan-Sep) of 2016 to THB 60.15 million (from THB 84.25 million). However, the total revenue figure was THB 1.95 billion, an 11.8% rise year-on-year (from THB 1.74 billion), thanks to overall business strengths and the healthy growth rates of local food, ready-to-eat frozen food and QSR segments.