“It’s a very preliminary look ” John Patton vice president of Circle K International told the Journal on Aug. 8 on the eve of his first visit to Saipan.
Michael S. Hahm vice president of South Pacific Petroleum Corp.; which does business as Circle K convenience stores and the 76 gas brand accompanied Patton to Saipan.
Phoenix-based Patton said he had “no specific agenda for Saipan. It’s an overview of the market.”
He declined to speculate on how long it would take to launch an operation in a new location. “It depends on the market dynamics. We would need an expended period of time.”
Patton said the group grew by acquisition and also looked for multiple-location potential. “Basically we’re not interested in a single site type of operation. We work on economies of scale.”
There was no doubt of the group’s intention he said. “We’re interested in growing in Micronesia; 20 locations is better for the profitability of a company than ten.” However he said the first assessment of the NMI market was “a very initial look at an entire market.”
Guam’s present economic opportunities through military buildup and a solid tourism market were promising he said. “We believe in the increase in military presence and the growth that comes along with that. We are confident in investing and expanding with a market that has so many dynamics.”
As for Guam he said “Obviously we are interested in growing our markets. … We look for ways to expand our business here. We expand through new stores and expansion of our existing facilities. Economically Guam is in a much better position. We do have all the core pieces.”
Expansion in the region is a move Couche-Tard’s chairman of the board president and chief executive of Circle K’s parent company would approve.
Alan Bouchard told the Journal in March 2005 “Expansion into Micronesia for SPPC is exactly what we are thinking of. That’s the goal. We are looking at what would be the opportunity to grow the base they already have here. I am an entrepreneur and we are a growth-driven company. I know Brian [Suhr] and Michael [Hahm] are entrepreneurs and I am sure we would be able to achieve something.” (See “Couche-Tard encourages SPPC to expand ” in the April 4 2005 issue of the Journal.)
Brian Y. Suhr president and chief executive officer of SPPC said at the time “I believe there are limited markets in other areas we could study — some opportunities in convenience store growth in other areas — those are definitely considerations.”
As the Asian economies recovered Circle K expanded in the Asian region where it already has a significant presence in Japan its largest market with 3 000 stores. In Indonesia Circle K has nearly 100 sites. Patton said. “The Asian market is very alive and dynamic.” Present focus “is mainly in China. That brings great opportunities but working and developing businesses in China is very challenging. It’s much easier in a location like Guam.” As well as Hong Kong and Macao Circle K has 320 stores in Southern China. Patton said of business in China “It’s challenging because of the business environment. There are restrictions on foreign companies and difficulty in working through all the layers of local government.”
Circle K in Guam he said followed the Asian model. “In general in Asia new product introduction is important. There is a higher incidence and more localization of that product.”
SPPC which contributes “under 5%” to the group according to Bouchard has 10 stations on Guam and in the 2005 Guam Business-Deloitte & Touche Top Companies in Micronesia survey reported revenues of $43.8 million.
As part of its expansion on Dec. 17 2003 Couche-Tard acquired a chain of 1 663 Circle K stores in 16 American states plus 627 licensees and franchisees from ConocoPhillips Co. MBJ