KL picked as Darden's Asia-Pacific headquarters

Bill Herzig, Senior Vice President of Darden Restaurants and President of Darden Aquafarms

KUALA LUMPUR: InvestKL landed one of its biggest coups in convincing Darden Restaurants Inc to choose South-East Asia’s regional headquarters (RHQ) hub, Kuala Lumpur, as its RHQ, thereby making the Malaysian capital city its Asia-Pacific restaurant headquarters.

A Fortune 500 company headquartered in Orlando, Florida, Darden Restaurants operates over 2,000 restaurants in North America and has more than 200,000 employees. It is one of the largest full-service restaurant companies in the world. In recent years, it has expanded overseas and has a presence in the Middle East in countries such as Saudi Arabia, United Arab Emirates, Qatar and Japan.

The agreement to set up regional headquarters in Kuala Lumpur follows on the heels of the announcement in 2012 that a subsidiary of Darden Restaurants, Darden Aquasciences Sdn Bhd, is setting up an integrated lobster aquaculture park (iLAP) in Semporna, Sabah. This is a joint venture between Darden Aquasciences and two Malaysian companies, Ever Nexus Sustainable Seafood Sdn Bhd and Inno Fisheries Sdn Bhd, a subsidiary of Yayasan Sabah Group.

The iLAP project was facilitated by InvestKL, Malaysian Investment Development Authority (Mida), Biotech Corp and Yayasan Sabah.

Darden Restaurants will make Kuala Lumpur its Asia-Pacific headquarters from which it will expand to South-East Asia and the Far East. It was two cities – Singapore and Kuala Lumpur – that were being considered for its headquarters. Bill Herzig, senior vice-president of Darden Restaurants and president of Darden Aquafarms, a wholly owned subsidiary of Darden Restaurants Inc, had always been impressed by Malaysia and Kuala Lumpur in all the years he had travelled for business in this part of the world and knew of the huge potential in the country.

But others in the company had to be convinced. What finally tipped the scale to Kuala Lumpur was the presentation by InvestKL led by its CEO Zainal Amanshah, who made a trip to the company’s headquarters in Orlando with his team.

“Zainal shared the plans for Greater KL and the structures that were put into place. He and his team convinced us that what we needed was in Kuala Lumpur and in Malaysia,” reveals Herzig.

Since commencing operations in June 2011, InvestKL has been instrumental in getting many MNCs from the United States and from around the world to set up their regional headquarters (RHQ) in Malaysia.

In 2011, it attracted six, in 2012 11 and in 2013 15, bringing the total of MNCs to 32 and with an investment value of more than RM2bil. Along the way, these 32 confirmed MNC investments are creating 6,239 high-skilled jobs. With these numbers, InvestKL is on track to meet its target of drawing 100 Fortune 500 and Forbes 2000 MNCs to set up their RHQs in Greater Kuala Lumpur by 2020.

Lobster aquaculture park

Besides its presence in the F&B scene, Darden is also making a huge investment of RM1bil in iLAP. The iLAP will cover 9,300 ha out of which 6,000 ha will be used for commercial lobster farming; 700 ha will be for research, development, training and a demonstration farm; and 2,600 ha will be used for the production of mussels. The project will have its own hatchery to produce its own seedstock instead of capturing wild juveniles to use as seedstock, as it is done in other lobster farming projects in South-East Asia. The first lobsters from the farm are expected to roll out in 2017.

The project is expected to create 14,000 jobs by 2022 and 20,000 jobs by 2029 once the farm reaches full capacity. The jobs created cover a wide range of skills ranging from very highly skilled such as PhD and Masters-level scientists and engineers to skilled workers such as aquaculture specialists and aquaculture technicians and semi-skilled workers.

Once iLAP reaches full capacity, the projected annual sales of the lobster is expected to be RM3bil. All the lobster produced will be bought by Darden for use in its chain of famous restaurants such as Red Lobster, Olive Garden and LongHouse Steakhouse in Asia.

The company would not have decided on its huge investment in Malaysia if not for ETP and Invest KL, says Herzig.

The lure of Malaysia

The company first started looking at the possibility of lobster aquaculture 10 years ago. Over 7% of the world’s supply of cold water and warm lobsters are bought by Darden, and “our food bill for seafood a year is US$700mil,” explains Herzig. “The demand for lobsters outstrips the supply. So we began to seriously look into ways of having a sustainable supply of lobsters.”

After years of evaluation and research, when the company was confident that lobster aquaculture farming was feasible, it began looking around for countries where it could start the venture. Some of the countries it looked at were Singapore, Thailand and Vietnam. In the end, the company decided to go with Malaysia.

“What struck me about Malaysia was just as that time when we were looking to expand into South-East Asia, the Prime Minister, Datuk Seri Najib Tun Razak, launched the ETP. We were blown away by the vision that was created in the ETP,” says Herzig. “We came here and had discussions with the Malaysian Government. Datuk Idris Jala, the CEO of Performance Management and Delivery Unit (Pemandu) got us in touch with InvestKL. InvestKL helped us to meet the right people at the Ministry of International Trade and Industry (Miti), Mida and Biotech Corp. What we saw and heard impressed us. Malaysia to us was a country that was headed in the right direction, thanks to the Prime Minister’s vision and it embraced foreign investment. The business structure that had been created made us want to be here.”

Transforming lives

Once Darden had decided on Malaysia, it had to find the right place for the iLAP. It settled on Semporna. Herzig is optimistic that the iLAP will bring about positive changes to the region. “Semporna is in eastern Sabah and it is not the most well developed place. It gives us great pleasure that we are doing something that will help create business opportunities for people,” explains Herzig. “We will be recruiting people who do not have skills and we will help train them, teach them the know-how of raising lobsters and we will guarantee to buy the product. The people will eventually become business owners in the end. We are excited about the transformation this project will bring to the place and to the people.”

As a company, from the very beginning, Darden has always placed importance on helping communities it works with to prosper. “This has been part of our company’s DNA. Fortune magazine listed us as one of the 100 best companies to work for,” he says with pride. Malaysia’s very successful Felda project inspired the company. “We were amazed by the success of Felda where people were given land and the know-how on how to plant rubber trees and eventually became successful planters on their own. This is what we hope to achieve as well.”

Being present in Malaysia so far has been a marvelous experience, adds Herzig. He is especially thankful for all the help given by various Government agencies and in particular InvestKL. “InvestKL has been wonderful. It has held our hands as we navigated through a new language, new culture, and taught us how things work here and how to be a good corporate citizen to Malaysia.”