Oldtown’s new plant to start ‘brewing’ in Q3

OLDTOWN Bhd, the “kopitiam” chain operator, expects to begin operations at its new factory in Ipoh by the third quarter of this year.

Executive director Clarence Leon D’Silva said the new factory will increase its current manufacturing capacity by five times.

“This is to cater to the expected higher demand for our beverages and new products over the next few years,” D’Silva said.

He said the overall investment for the factory is about RM38 million.

In an interview with Business Times recently, D’Silva said Oldtown is expanding its operations in China.

“We plan to set up a new food processing plant in Guangzhou as part of our expansion plan to penetrate the booming growth of China’s food and beverage market,” he said.

The company also plans to open two to three new outlets and explore licensing opportunities this year while in Indonesia, it plans to open five to eight new outlets this year.

“We will still maintain our strategy to open 20 to 30 new outlets annually,” D’Silva said.

OldTown currently has 183 outlets in Malaysia, eight in Singapore, four in Indonesia and one in China, bringing the total to 196.

By 2015, the cafe chain operator is targeting to open up to 300 outlets to expand its coverage locally and overseas.

Moving on, D’Silva said Oldtown is exploring the idea of setting up kiosk-based outlet to assist new franchise owners with startup costs to meet rising property prices and rental cost.

According to D’Silva, OldTown has already identified a location in Kuala Lumpur to start its first kiosk.

“We have been working on the kiosk operations for a while now and are attempting to roll out the first kiosk by the third or fourth quarter this year,” he said.

The kiosks are only for the Malaysian market and will not be replicated overseas, D’Silva said noting that its branding in China and Indonesia is more upmarket and leans towards the restaurant rather than the café concept.

D’Silva said Oldtown expects to achieve double-digit growth in net profit and revenue this year.

“We remain bullish on a double-digit growth for the full year,” he said.

For fiscal year 2011, the company posted a net profit of RM40 million on revenue of RM285 million.

Source: www.btimes.com.my