Dusit Thani Plc is diversifying into the food business to reduce its business risk from dependence on hotels and to fetch new income.
Suphajee Suthumpun, chief executive of Dusit International, said the broadening is part of the group's business reorganisation started earlier this year.
Under the new business structure, Dusit Thani will have hotel, education, food and mixed-use property businesses, among other ventures.
"The food business will be the third pillar of Dusit after hotels and education, contributing 15% of the group's revenue within three years, or 1 billion baht," Ms Suphajee said. "Revenue from the hotel business will decline to 70% of the total during the period, down from 85% last year, with the remaining revenue from education and other areas."
Under the new scheme, the company founded Dusit Foods Co in March of last year, with Dusit Thani Plc holding a 99.99% stake.
That same month, Dusit Thani teamed up with Hatton Capital to invest a combined 26% in NR Instant Produce Co (NRIP), a maker of food for export.
Dusit Thani also spent 423 million baht to buy a 51% stake in Epicure, a catering company for hotels, in early January and plans to spend 613 million baht to buy a further 19% of Epicure by the end of this year.
"We will expand our food business both by acquiring shares of existing food and food-related companies and developing our own food," Ms Suphajee said.
Jate Sopitpongstorn, general manager of Dusit Gourmet (food retail), said Dusit expects revenue of 400 million baht this year from the food business and 1 billion baht in 2021.
The company plans to launch its own food brand, Khong Thai, at Thaifex, World of Food Asia 2019. The expo will take place from May 28 to June 1 at Impact Muang Thong Thani.
Dusit Thani has joined forces with David Thomson, a well-known Australian chef, to develop the Khong Thai formula.
Khong Thai will export ready-to-cook and paste concentrate products to the US at first, as the American market for ready-to-cook is large and Thai food is popular among consumers there.
The products will be sold at high-end restaurants and via e-commerce.
After the US, the company plans to expand its products to Europe (including Britain, Germany and France) and to the domestic market via retail.
Mr Jate expects sales of Khong Thai products to reach 100 million baht within five years, with NRIP the major contributor.
"Revenue from Dusit food should be 10-15% of the total for the group over the next three years," he said.
For 2018, Dusit Thani reported 5.564 billion baht in total revenue, a marginal drop from 5.57 billion baht in 2017, with a net profit of 290 million baht, up from 267 million.
