Its executive director, Ng Su Onn, said currently, the company has 1,103 stores, with three run by franchisees.

“We hope to grow the number of stores to 2,000 in three years’ time. To have 1,000 of the stores managed by franchisees during this period is achievable,” he told reporters after a signing ceremony between 7-Eleven Malaysia and Perwira Niaga Malaysia here Monday.

The collaboration between the two parties will see at least 100 ex-servicemen receive resettlement opportunities via job placements at 7-Eleven stores.

On the franchise programme, Ng said, the company has received about 1,300 applications, of which 76 had been selected.

Ng said the company would offer a full support franchise model, whereby beside training before the opening of the store, the franchisee would also get help from a field consultant in the operations.

He said to start a new store, a franchisee would need between RM400,000 and RM500,000, including RM200,000 worth of stocks.

“We have enough funds to sustain our business. With this franchise model, we expect this will further boost our sales.

“Based on the current situation, our franchised store’s sales have increased by 20 to 30 per cent,” he said.

On the listing exercise, Ng said, the company was still awaiting the Securities Commission’s (SC) approval.

“We expect to get it by the end of the first quarter next year. We are looking at listing by the second quarter in 2010,” he said.

Berjaya Retail Bhd (B-Retail) is the listing vehicle for subsidiaries, Singer (M) Sdn Bhd and 7-Eleven Malaysia Sdn Bhd, on the Main Market of Bursa Malaysia.

The plan includes Berjaya Corp’s wholly-owned subsidiary, Cosway Corp Bhd, selling its 100 per cent stake in Singer to B-Retail for RM360 million.

At the same time, B-Retail will buy the full stake in 7-Eleven from Premier Mechandise Sdn Bhd for RM600 million.

The Singer and 7-Eleven acquisitions will be satisfied via a combination of assumption of debt and issuance of new shares.

– BERNAMA

KUALA LUMPUR: 7-11 Malaysia Sdn Bhd aims to open 2,000 stores nationwide in three to five years, of which 50% of the new stores would be under its franchise scheme.

Executive director Ng Su Onn said on Monday, Dec 21 the franchise system would help expand its outlets. Currently, only three stores were under the franchise scheme.

He was speaking to reporters after 7-Eleven signed an agreement with Lembaga Tabung Angkatan Tentera (LTAT) subsidiary Perwira Niaga Malaysia (PERNAMA).

Earlier, an MoU was signed between the two parties to formalise a resettlement scheme for 100 ex-servicemen. The scheme would entail training with job placements at 7-Eleven stores.

7-Eleven will have 1,100 stores by end-December, said Ng.

It said the ratings reflect the credit strength of the corporate guarantee provided by its parent company, UK-based Tesco Plc.

It is also underpinned by the group’s strong global market position in grocery retailing and steady profit margins, despite weak economic conditions in several of its markets.

In a statement here on Monday, the rating house said it had also revised the rating outlook to stable from negative, taking into account Tesco Plc’s measures to restore its credit metrics.

This includes scaling back capital expenditure, paring down borrowings from its cash balances, suspending its share buyback programme and divesting property assets.

Tesco Malaysia, a 70:30 joint-venture between Tesco Plc and Sime Darby Bhd, has operated 30 Tesco-branded hypermarkets in Malaysia since 2000.

Its market share was 10.2 per cent as at May 17, 2009 with its nearest competitor, Dairy Farm Ltd’s Giant, controlling 7.5 per cent.

For financial year ended Feb 28, 2009, Tesco Malaysia’s revenue rose by 28.6 per cent to RM3.3 billion, compared to RM2.6 billion in 2008 while pre-tax profit increased to RM58.7 million as against a loss of RM37.7 million previously.

However, as a result of the huge capital outlay on new store openings, free cash flow generation worsened in 2009 to negative RM493 million, as against a negative RM286 million in 2008.

Given Tesco Malaysia’s commitment to open at least three to five stores annnually, this is expected to deteriorate further, MARC noted.

However, it said continuing financial support from Tesco Plc for Tesco Malaysia’s expansion strategy, has been premised on the latter’s ability to support its interest and profit payments on borrowings with internally generated cash flows.

Nevertheless, Tesco Malaysia’s gearing level remained very high at 40.9 times in 2009 as against 49.2 times in 2008, with MARC’s rated facility and loans from Tesco Plc, accounting for the bulk of the borrowings.

During 2009, the company utilised RM1.09 billion under the RM3.5 billion rated facilities in addition to an inter-company loan of RM1.17 billion.

The parent company loans mitigate to a certain extent, the earlier erosion of shareholders’ funds by operating losses prior to financial year 2009.

Tesco Plc is the largest grocery retailer in United Kingdom, and rankes fourth among global retailers by revenue, with 4,524 stores in 13 countries.

–BERNAMA

Firemen outside the complex after rescuing blast victims

It was supposed to be a grand opening on Thursday for the largest AEON Jusco store in the country but it turned to tragedy Monday when a gas leak caused an explosion, causing the death of a supervisor and injuring 16 people,

Everything was in full swing with workers and tenants busy making final preparations for the opening when disaster struck just before 1pm at the complex in Jalan Lagenda, Bachang, Malacca.

The blast at the food court section on the ground floor of the three-storey complex was so powerful that it blew a two-metre hole in the sidewall. Glass splinters and debris flew up to 25 metres and a small fire broke out.
Two injured victims were found sprawled outside the building when firemen arrived minutes after the explosion.

The firemen put out the small fire and mounted a search for more victims after workers told them that there were several others missing or trapped under the rubble.

Disaster zone … A fire and rescue department officer tying the yellow tape surrounding the affected back entrance of the building after the explosion

Five victims were pulled out alive. Tiau See Peing, 25, a supervisor from Batu Pahat with Old Town White Coffee was found dead with a neck wound caused by flying debris.

State Fire Department operations deputy director R. Ezhumalai said the blast was likely caused by a gas leak as victims mentioned the smell of gas shortly before the incident.

“We are still investigating to determine the exact location of the blast or what may have caused it,” he said, adding that several other victims were earlier rushed to the hospital for treatment.

The injured workers were nine locals, six Indonesians and a Myanmar.

At press time, three – all locals – were in critical condition at the Malacca Hospital. They have been identified as Mohd Tarmizi Jaafar, 23, Lai Soon Wee, 32 and Ooi Kok On, 33.

Seven others suffered serious injuries and have also been warded at the hospital. The remaining six victims received outpatient treatment.

Ghafar Baba, 41, a clerk of works who was on his rounds to check on final touches to the building, said he got a whiff of an odd smell minutes before the explosion.

“I didn’t realise it was gas and had stepped out of the building before the explosion,” he said.

A police officer ordering onlookers to leave the scene

A tenant of one of the restaurants at the food court, who refused to give his name, said tenants were requested to come in before noon to test the gas system.

“We were told to come in at 11am with only two representatives from each restaurant or outlet allowed in when the test was being conducted.

“It was before 1pm when I got the smell of gas and informed the contractor about it.

“However, several minutes after that, there was a loud explosion and I only remember running out as fast as I could,” he said.

At the Malacca Hospital, Musli Ali, a 22-year-old worker from Acheh, said he had decided take an early lunch break and was resting when he heard a loud explosion.

“The next thing I knew was that I was lying on the floor covered with debris.

“I was shocked and stunned because I was quite close to the blast,” he said.

However, he said he was fortunate as he escaped serious injuries and was given outpatient treatment for a minor cut on his left hand.

State Human Resources Committee chairman Datuk Yaakub Md Amin said the Department of Occupational Safety and Health (DOSH) has been directed to investigate the blast.

Investigations will focus on whether the contractors had followed safety measures.

Action would be taken against them if they had not done so, he said.

Published Dec 14, 2009 Daily Chillies

The incident happened at about 1pm at the food court area of the shopping complex which will be opened to the public this Thursday.

The dead was identified as Tau See Peng, 25, from Batu Pahat, Johor.

Melaka Fire and Rescue assistant director (operations) R.Ezhumalai said initial investigations revealed that there was a gas leak and witnesses claimed there was an explosion.

“When firemen arrived, two of the victims had been brought out from the food court area, while two others who were trapped inside were rescued by firemen,” he told reporters at the scene.

– MORE

EXPLOSION-DIE 2 (LAST) MELAKA

He believed Tau was killed when the ceiling in the building collapsed and fell on his neck.

Tau and a few other workers were believed to be conducting test on the installation of LPG pipes at the food court of the ground flood of the shopping complex when the mishap occurred.

Tau’s body was taken to the Melaka Hospital for a post-mortem.

Those injured were mostly Indonesian workers.

A trader renting a stall there, Zulmakmun Hakem Md Zain, 21, who was with his sister, said they rushed out of the premises after hearing an explosion.

“I saw the ceiling collapsed and the air smell of gas,” he added.

– BERNAMA

LONDON: Tesco Plc, the world’s No. 3 retailer, posted quarterly sales growth towards the bottom end of forecasts, held back by lower food price inflation, but said a gradual consumer recovery remained on track.

“We are seeing improving customer confidence and encouraging trends in both the UK and our international businesses, although recessionary conditions still exist in a number of markets,” Tesco chief executive Terry Leahy said yesterday.

The supermarket group, which makes about three-quarters of its profit in Britain, said sales at UK stores open at least a year rose 2.8%, excluding petrol and VAT sales tax, in the 13 weeks to Nov 28 – its fiscal third quarter.

That is down from 3.1% in the second quarter and just shy of the average forecast of 3% in a Reuters poll of 12 analysts.

Britain is taking longer to emerge from recession than other major economies and a retail survey earlier yesterday signalled only a gradual recovery.

The government will also need to raise taxes to tackle its huge deficit and is expected to confirm today it is reversing a cut in VAT sales tax which was introduced last year in the depths of the recession.

Tesco finance director Laurie McIlwee told Reuters he did not expect the reversal to derail recovery, though he warned against raising the rate above its former 17.5% level.

“I don’t think that the impact (of VAT rising to its former rate) will reverse the trend in customer confidence,” he said in a telephone interview. “If the VAT goes above that it could be more negative. Just as consumers are getting more confident, to start indirectly taxing people (more) will be a strain on their budgets.”

Tesco, which has over 4,300 stores in 14 countries, said group sales rose 8.8% excluding petrol, with strong growth in Asia offsetting a flat performance in Europe.

That is down from 11.4% in the first half but compares well with international rivals like Carrefour SA and Wal-Mart Stores Inc, which are battling food price deflation in some markets.

Credit Suisse analyst Andrew Kasoulis said the UK figures showed Tesco had closed the gap on previously faster-growing domestic rivals such as J Sainsbury Plc and Wm Morrison Supermarkets Plc.

Tesco’s sales have lagged domestic peers for much of this year, hit by its greater exposure to discretionary non-food ranges and by the launch of a discount range, which depressed the overall value, if not the volume, of sales.

Sainsbury reported a 5.4% rise in underlying sales for the 16 weeks to Oct 3 and Morrison a 4.3% increase for the 13 weeks to Nov 1. But these figures did not include as much of the recent fall in food price inflation.

Analyst Freddie George at brokerage Seymour Pierce, however, said the good news was factored into Tesco’s shares, which have risen 16% in the last three months, outperforming sector peers by 17%.

He also noted that Tesco was regaining ground by stepping up competition in the sector, with more promotions and a recent doubling of loyalty reward points.

At 0850 GMT, Tesco shares were down 2.1% at 426.7p, valuing the group at £34bil.

McIlwee said like-for-like sales of non-food ranges such as electricals, toys and clothing had continued to improve and were now on a par with food growth rates.

Sales of the group’s premium “Finest” range were also growing again, while its online business delivered a record performance last week, he added.

Food prices were likely to remain flat and Tesco’s full-year performance expectations were unchanged, he said. — Reuters

TESCO Stores (Malaysia) Sdn Bhd recently teamed up with local designer Rizalman Ibrahim to create a stylish reusable bag made entirely out of recycled plastic bottles.

The new bag, aimed at helping help people use less plastic carrier bags, retails at RM4.99, is available in all 31 Tesco stores nationwide.

Tesco will also be giving RM0.50 from every sale of the bag to GREENaid, a programme to support various conservation and educational activities on natural heritage managed by Malaysian Nature Society.

Tesco is only producing 50,000 of these unique designer bags which comes with a blue butterfly print on one side and the letter ‘r’ (denoting Rizalman) with a recycling symbol on top in the form of a dot on the other side. It also has Rizalman’s signature at the bottom.

“Customers will be excited about the new reusable designer bags, knowing that producing it does not harm the environment and going green can be very fashionable,” said Tesco Malaysia’s chief operating officer David Hobbs at the launch of the bag.

Meanwhile Rizalman said it took him a few weeks to come up with the design of the bag.

“I feel that by designing this bag, I can reach out to more people. It is my way of giving back to the society and the environment. I love the idea of combining good design and ethics.

“To me, the concept of turning something unwanted into a keeper that is both recycled, reusable is a fantastic and stylish idea. A love of style always precedes fashion,” said the designer who is well known for creating clothes for the rich and famous.

Since 2007, Tesco has been introducing new initiatives to tackle climate-change problems. The hypermarket started making changes in the way the stores were built in order to reduce environmental impact.

They included installing new energy saving lights in its stores, putting motion sensors in rooms so lights would be automatically switched off when no one is using them and better chiller cabinets that use less energy.

“To date, we have opened 10 stores which are built according to this blueprint and so far in 18 months, we have reduced our carbon intensity by over 13%,” said Hobbs.

Other initiatives include the launch of the “Green Clubcard Points” in June last year to reward Tesco Clubcard members – giving them a point for reusing any plastic bags and two points for reusing the Tesco Green Bags when they shop at Tesco.

Apart from the newly launched designer bag, Tesco also has four other reusable bags. The first Green Bag was launched in June this year.

“We have worked hard at our checkouts to raise awareness with staff and customers to use less bags and so far this and the green Clubcard points has resulted in a reduction of 20 million bags being given out and pushed into the environment,” said Hobbs.

The right branding and good packaging can triple a company’s sales, SME Corp Malaysia Bhd chief executive officer Datuk Hafsah Hashim said.

“We monitor small and medium enterprises (SMEs) that have obtained SME packaging grants and we found that the minimum increase in sales was 30 per cent, while the best was 230 per cent,” she told Business Times in an interview.

Training local SMEs on innovative packaging and branding is one of SME Corp’s immediate plans after it started its operations on September 1.

SME Corp, an agency under the International Trade and Industry Ministry, has been mandated by the government to coordinate and monitor overall SME development programmes.

Plans in the pipeline include a mobile packaging unit and a SME packaging and branding academy.

These programmes seek to enhance the visbility of SME products and services as well as develop strong Malaysian brands for both local and global markets.

Hafsah said SME Corp will collaborate with partners in implementing these SME programmes.

She said the mobile packaging unit will likely be launched this month, where buses will travel to small districts and villages to showcase and create awareness among entrepreneurs on the need for a good packaging technique and branding.

“We want to do away with people using packets and staplers for their products,” she said.

The buses will also ferry entreprenuers from rural areas to its packaging and branding academy, which will be established within the Limkokwing University of Creative Technology in Cyberjaya.

Aimed at improving packaging and branding among the SMEs through guidance and training, the academy is also expected to be launched this month.

Hafsah said SME Corp and Limkokwing University will collaborate to create 100 brand names for the SMEs.

Enterprenuers then can choose any of the 100 brand names for their products, after which they would be trained on branding such as brand protection and related issues.

They are also eligible for financial assistance from SME Corp.

Hafsah said a number of SMEs who are suppliers to Tesco hypermarket will be participating in the programme, under the tie-up between SME Corp, Limkokwing University and Tesco Stores (M) Sdn Bhd.

She said as most of Tecso suppliers have reached a three-star SME Competitive Rating for Enhancement (SCORE) rating, they are able to supply products to Tesco chain of stores in the UK.

Other companies, such as Matsushita, Agilent and Proton, have also required their suppliers to have at least a three-star SCORE rating.

Hafsah said the SCORE programme, which was developed in-house by former Small and Medium Industries Development Corp, is expected to get a patent by the end of this year.

The anticipated improvement in the economy and opening of additional outlets will help spur growth, its chief executive officer Guillaume de Colonges said.

“In the first half, Carrefour had some difficulties. But, in the past few weeks since Ramadhan, we have been experiencing some improvement in our business,” de Colonges said in an interview with Business Times.

He expects a like-for-like performance based on 16 hypermarkets (end-2008) to contract slightly. However, the opening of four stores this year could lift its business into positive territory.

“The country’s gross domestic product is expected to be positive. We will have four new stores, and we expect current stores to do better and recover to what we experienced in 2008,” de Colonges said.
A search at the Companies Commission of Malaysia showed that Carrefour’s revenue in the financial year ended December 31 2008 was RM1.59 billion, up 20.5 per cent from fiscal year 2007. Its net profit was RM33.15 million.

The top three performers were the Wangsa Maju, Mid Valley Megamall and Subang outlets.

As part of efforts to attract more customers, the retailer will strive to be more sensitive to their needs.
Carrefour in Malaysia is operated by Magnificient
Diagraph Sdn Bhd, which is 30 per cent owned by the Negri Sembilan royalty-controlled Syarikat Pesaka Antah.

The retailer has added a new store format, called Carrefour Market.

Located within The Sphere in Bangsar South, Kuala Lumpur, the 2,037 sq m outlet emphasises food..

Out of its 16,000 to 17,000 stock-keeping units, only 15-20 per cent are non-food items.

Carrefour plans to expand the store format if the opportunity arises, de Colonges said.- New Straits Times