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DBE (7179) - DBE Gurney expands HARUMi chain to Sabah, eyes Taiwan, China next

KOTA KINABALU (Feb 13): Integrated poultry company DBE Gurney Resources Bhd will open two new HARUMi fast food restaurants in Sabah this year, as part of its plan to expand the local fried chicken brand across Southeast Asia, Taiwan and China.

Apart from restaurant formats, the group will open 19 kiosks and two food trucks in the state. This is part of its expansion plan to establish 3,000 kiosks, 300 food trucks and 30 HARUMi restaurants across Malaysia by 2018.

HARUMi was launched in October last year and has since grown to 200 kiosks and express outlets, three food trucks and three restaurants across Peninsular Malaysia.

At the same time, DBE Gurney plans to set up new HARUMi restaurants in Taiwan and Chongqing, China, within the second quarter of this year, leveraging on the expertise of DBE Gurney's Taiwanese partner.

"In Taiwan itself, we target to open 10 restaurants this year," DBE Gurney group managing director Datuk Alex Ding Seng Huat told Malaysian journalists at the signing of a memorandum of understanding (MoU) with Koperasi Penggiat Seni Sabah Bhd (COSENI) here on Sunday.

He added that the group will set up a subsidiary in Taiwan to handle its international operations.

On Sunday, DBE Gurney's wholly-owned subsidiary DBE Poultry Sdn Bhd signed a MoU with COSENI, offering selected cooperative members to participate in the HARUMi business programme.

COSENI has so far committed to an initial investment sum of RM1 million for its members to purchase, promote and operate kiosks, food trucks and restaurants under the halal fried chicken franchise. The cooperative is a platform approved by Suruhanjaya Koperasi Malaysia that aims to improve living standards of its members through their involvement in small businesses.

Under the MoU, DBE Gurney will train the selected members to manage and operate the royalty-free HARUMi establishments while ensuring they adhere to HARUMi operating procedures.

"In the future, we hope to replicate the business model and success of HARUMi to other neighbouring countries such as Indonesia, Thailand, and Myanmar," said Ding.

DBE Gurney had previously engaged established Taiwanese firms and partners with regard to the development and marketing of HARUMi products.

The group is targeting HARUMi to contribute 30% to its revenue in the current financial year ending Dec 31, 2017 (FY17), while its existing core business of supplying fresh chicken to KFC Malaysia and QSR Foods is expected to contribute the remaining 70% to revenue.

HARUMi products currently have a profit margin of some 20% and have helped DBE Gurney to maintain profitability over the last three quarters, according to Ding.

For the nine months ended Sept 30, 2016, the group posted a net profit of RM1.18 million compared with a net loss of RM5.58 million, even though revenue fell 12.3% to RM83.93 million from RM95.71 million.

On concerns of the cost of obtaining fresh chicken meat in Sabah, Perak-based DBE Gurney is looking into partnerships with established local poultry farmers, he said.

The group also faces the risk of currency volatility as a large portion of its raw materials are imported, according to Ding.

DBE Gurney closed unchanged at 3.5 sen today, for a market capitalisation of RM40.65 million.




DBE (7179) - DBE Gurney expands HARUMi chain to Sabah, eyes Taiwan, China next
http://www.theedgemarkets.com/my/article/dbe-gurney-expands-harumi-chain-sabah-eyes-taiwan-china-next
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