Wednesday, June 23, 2010

Kulim to invest RM85m on 80 new outlets

DIVERSIFIED plantation group Kulim (Malaysia) Bhd (2003) will invest RM85 million in expanding 80 new food outlets in the country, via subsidiaries QSR Brands Bhd and KFC Holdings (Malaysia) Bhd.

Its chairman Tan Sri Muhammad Ali Hashim said with the expansion plans, both QSR and KFC are expected to register higher revenue over the next 12 months in Malaysia.

"We see good possibility to expand more outlets domestically, especially in the east coast states," he said after the company's annual general meeting in Johor Baru yesterday.

QSR, together with its 50.25 per cent subsidiary KFC, recorded an operating profit of RM62.2 million in the first quarter of this year, up 18.9 per cent from the corresponding period of last year.
Kulim's executive director Jamaludin Md Ali, who is also managing director of both QSR and KFC, said the company will open 40 KFC and 22 Pizza Hut outlets nationwide in the coming months as part of its expansion.

In addition, it will open 15 Ayamas and three Rasamas outlets to complement Kulim's food and restaurant division.

Muhammad Ali said the company will also focus on outlets that offer drive-through services, as the concept is popular among Malaysians.

"We want to offer something more modern and at the same time, the east coast still has a good potential for our business," he said.

On Kulim's foray into the South Pacific oil palm plantation sector, Muhammad Ali said that last year saw reduced profits on the company's palm oil plantation operations in Papua New Guinea as well as the Solomon Islands.

The lower palm product prices translated into lower total plantation operating profits at RM107.6 million in 2009.

However, the successful acquisition of CTP (PNG) Ltd, a major palm oil producer in PNG, by its subsidiary NBPOL, increased its land bank by 25,000 hectare of mature oil palms and is expected to further add to Kulim's profitability.

Muhammad Ali said that Kulim's existing landbank of 35,000ha now stands at 60,000ha after the acquisition.

Of this, 30,000ha are unplanted and will be part of its 10-year expansion plan where they estimate that it will cost them in the region of US$3,000 (RM9,600) for planting activities.

Muhammad Ali said that Kulim was now the biggest plantation company in the South Pacific, excluding Indonesia (through Irian Jaya) with Papua New Guinea's total land bank and an additional 6,000ha from the Solomon Island.

"This makes us the biggest single employer in Papua New Guinea," he added.

The group's plantation profits dropped by 23 per cent to RM365.2 million for financial year (FY) 2009 from RM475.3 million (after excluding negative goodwill arising from the acquisition of Sindora Bhd of RM93 million) in FY 2008.

Plantations revenue took second place at 28 per cent with the top position going to its food and restaurants division with a 48 per cent contribution for last year.


-- by Business Times

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