Managing director Chan said the company is focused on promoting authentic Malaysian cuisine not just locally but globally.
KUALA LUMPUR: Cafe chain operator Oriental Kopi Holdings Bhd, which debuted on the ACE Market with a premium of over 71% above its initial public offering (IPO) price, is gearing up to expand its footprint both locally and internationally.
Managing director Datuk Calvin Chan Jian Chern said the company is focused on promoting authentic Malaysian cuisine not just locally but globally.
“Since day one, we established Oriental Kopi with the mission to promote authentic Malaysian cuisine culture to the world, not just for locals. We will target neighbouring countries first as their culture and taste are quite similar to ours,” he said.
“We are planning to expand to other countries, but discussions are still ongoing. Once the information is finalised and confirmed, we will proceed and make the necessary arrangements. For now, we are waiting for the good news.”
Chan said Malaysian cuisine has strong global potential, especially as the country continues to gain recognition internationally.
“Tourists in Malaysia are also trying our food and leaving encouraging comments. I think this is a good sign for us.”
Currently, Oriental Kopi has 19 cafes in Malaysia and one in Singapore, bringing the total to 20.
Oriental Kopi has identified three potential business models for its overseas expansion – a joint venture (JV) owner-operator arrangement with a local partner, appointing a master franchisee to operate several cafés and sub-franchise, and franchising to one or more companies.
In Singapore, last year, the company adopted the JV model in partnership with Paradise Group Holdings Ltd, where Oriental Kopi holds a 30% stake.
“It handles most of the operations locally there. We are just supporting them during the initial phase for the design of the outlets, kitchen operations, sourcing of the ingredients locally, and training of the workers,” he said.
Through the JV, both the companies have set sights to open two more cafes in Singapore this year.
Paradise Group, established in 2002, operates 100 restaurants and cafes across nine East Asian markets, including China, Thailand, Vietnam and the United States.
Oriental Kopi’s IPO raised RM183.96mil, with most of the proceeds earmarked for its expansion locally.
About 29% or RM54.68mil is set aside to set up a three-storey facility, with a built-up area of 108,448 sq ft, which will house its new head office, central kitchen and warehouse.
Chan said the facility would lead to cost savings, although specific figures were not disclosed.
“With the central kitchen, we are actually able to scale down the kitchen size at the outlet and increase efficiency in operations. We can also reduce manpower in the outlet and increase the customer dining area,” Chan said.
An additional 20% or RM36.4mil is allocated for expanding cafes across Malaysia, with plans to progressively open 14 new outlets between 2024 and 2026.
The company is also focused on expanding its halal-certified outlets, with 13 of its 20 cafes already certified.
“We are in the process of submitting applications to obtain halal certification for the remaining outlets,” Chan pointed out.Meanwhile, another 3% or RM5.5mil will be used for marketing activities in foreign markets.
Beyond cafe operations which contribute about 94% of the group’s top line, Oriental Kopi is involved in the distribution and retail of its packaged food brands.
It is working on launching a range of packaged foods and drinks through resellers’ retail networks to tap into underserved markets.
Chan said the company offers 31 products, including white coffee, sambal, and Thai hot pot, and would be introducing 20 more by the end of this year or, at the latest, by the first quarter of next year.
The group has allocated about 3% or RM5mil to support the expansion of its brands of packaged foods segment.
The remaining 41% and 4% or RM75.78mil and RM7.6mil, will be utilised for working capital and estimated listing expenses, respectively.
The company, which opened its first cafe in 2021, remains committed to maintaining its authenticity despite competition in the market.
The share price of Oriental Kopi closed at 87.5 sen or up 43.5 sen yesterday, giving the company a market capitalisation of RM1.75bil.