Thursday, April 26, 2012

OldTown ... Apr12

It has added 21 outlets to its café chain in 2011, bringing the total to 196, including those in Singapore , Indonesia and China .
 
For 2012, the company plants to add 20 to 30 new outlets locally, about half of which will be opened under its franchise scheme.
 
It is in the process of applying for halal certification for all 183 cafes in Malaysia , hopefully before end of 2012. It has secured certification for some 25 outlets to date (April 2012). The food processing centres and beverage manufacturing are already certified. If successful, this will significantly expand its target market, which at the moment is predominantly Chinese.
 
For overseas expansion, two or three new outlets are planned for Singapore and five to eight in Indonesia . A second outloet in Guangzhou , China opened in March 2012.
 
OldTown signed up a master franchisee for the Guanzhou and Macau provinces in 2011 A new food processing centre in Guanzhou, in which OldTown has a 19% stake is planned by end 2012. In addition, the company is exploring of appointing licensees for other provinces in China to further expand its footprint.
 
The café chain accounted for roughly 62% of Oldtown’s total revenue in 2011, with the balance coming from the beverage manufacturing arm. The later is also expected to grow in tandem for the foreseeable future.
 
While it will likely continue fare well, the higher growth potential should come from exports, which currently account for half of the company’s beverage manufacturing revenue.
 
OldTown has pushed into the mainland Chinese market, where the potential demand is much larger.
 
It has also set its sights on two other coffee drinking countries in the region, South Korea and Vietnam .
 
Its cash pile stood at rm73 million as at end 2011.

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