PETALING JAYA: KUB Malaysia Bhd will close 34 A&W outlets – 24 in Malaysia and 10 in Thailand – this year, to reposition its business and operations to achieve sustainable growth, said group managing director Wan Mohd Nor Wan Ahmad.
The repositioning will be led by a comprehensive plan in its agro, liquefied petroleum gas (LPG), and property, engineering and construction (PEC) businesses.
“We will retain only outlets that have heavy traffic based on the increase in sales, and we are looking at ways to increase customers’ satisfaction,” he told reporters after the company’s annual general meeting here today.
The comprehensive plan has been approved by the board and the restructuring will address issues such as strengthening core competencies, enhancing business fundamentals, nurturing in-house talent and strengthening capital position, he added.
KUB incurred a net loss of RM58.8 million for the year ended Dec 31, 2011 on a revenue of RM708.5 million.
According to Wan Mohd Nor, the losses were mainly attributed to the group’s food operations, spearheaded by its subsidiaries A&W (Malaysia) Sdn Bhd and A&W Restaurants (Thailand) Ltd Co.
A&W in Malaysia and Thailand faced major setbacks in the 2011 fiscal year where it recorded losses totalling RM44.5 million, of which 50% was caused by impairment losses.
On plantation operations, the group has undertaken an aggressive expansion of its plantation landbank in Sarawak.
KUB, which currently has some 7,676 hectares (ha) of oil palm plantations in Johor and Sarawak, aimed to increase its landbank to 20,200ha within five years.
“We are currently concentrating our efforts to strengthen our plantation operations by planning to go into palm oil refinery and venture into cattle-raising within the plantations.
“These expansion plans will be spearheaded by our subsidiary, KUB Agrotech,” Wan Mohd Nor said.
The group’s energy division was also expected to be profitable as it planned to tap into the vast opportunities in the sector including the setting up of a refrigerated LPG terminal and venture into LPG-related business such as oil and gas support industries with potential partners through mergers and acquisitions.
KUB also planned to further strengthen its PEC operations by securing larger projects via the industrial building system market, private finance initiatives and direct negotiation basis.
“With the government’s infrastructure projects expected to be on the rise in the next several years, KUB intends to play a major role in improving the country’s development.
“As such, the group will concentrate on higher-margin projects that are concession-based.
“With our long-term track record, we are confident that through our subsidiaries, namely, KUB Builders Sdn Bhd and Precast Products Sdn Bhd, we are ready to take up bigger challenges in the market,” added Wan Mohd Nor.