George Town, 20 April 2022 – Malaysian conglomerate and Main Market listed company, Texchem Resources Bhd (“Texchem” or the “Group”) (“德 资 源”) is confident that the Group’s restaurant division will benefit from Malaysia’s economic recovery and opening of international borders. Texchem is the founder and operator of Sushi King Sdn Bhd and Sushi King (East Malaysia) Sdn Bhd (“Sushi King Group”), Malaysia’s largest Halal Japanese chain of restaurants with 121 outlets nationwide as at March 2022.
To minimize the impact of the Covid-19 pandemic, when the food and beverage (“F&B”) industry was impacted by dine-in restrictions, Texchem implemented various rationalization initiatives to focus on improving Sushi King Group’s operation and cash management. These included the closure of its operations in Indonesia and certain non-performing outlets in Malaysia. After closely reviewing the performance of each outlet, the total number of restaurants have been streamlined to the current number of outlets, as compared to nearly 150 prior to the Covid-19 pandemic.
These initiatives have already begun to bear fruit as the loss before tax (“LBT”) for its restaurant division, which includes other companies under this division, was narrowed down substantially. For the financial year ended 31 December 2021 (“FY2021”), LBT for the restaurant division was reduced to RM1.3 million versus RM15.0 million a year ago.
As part of its brand refreshing exercise, the Sushi King Group had introduced automation for customers to self-order and robotic trays for the delivery of orders, thus reducing manpower requirements. As a result of continuous new menu creation and intensified marketing and promotional activities, the number of Sushi King loyalty programme members has increased to over 850,000 currently. Under the loyalty programme, members are able to enjoy special promotions, rewards and benefits when dining at Sushi King.
Executive Chairman of Texchem, Tan Sri (Dr) Fumihiko Konishi (丹斯里小西史彦), said, “Today, the Sushi King Group’s operations is leaner with a healthier cost structure and higher operational efficiency. This will translate to a positive impact on our financial performance as demand for dine-in at our existing restaurant outlets have rebounded after the easing of movement control order restrictions. Moreover, the opening of international borders will continue to spur demand as tourist arrivals in Malaysia will benefit the F&B retail industry.”
“Moving forward, the strategy is to focus on opening additional outlets that feature different concepts such as Sushi King kiosk and Sushi King satellite outlets that serve takeaway sushi. The benefits of these new concept outlets are that they require much lower capital expenditure and shorter time to launch. As these outlets will be strategically located at new locations with high footfall, we are able to target a larger customer base while leveraging on Sushi King Group’s existing kitchen facilities in the nearby restaurants. This will drive incremental revenue without having to incur high investment costs.”
“So far, the first Sushi King kiosk opened at a petrol station in Subang Jaya, Selangor has been well-accepted by customers. We will replicate this model and identify new locations at other petrol stations, hospitals and supermarkets to open new Sushi King kiosk and satellite outlets. This expansion strategy caters to the increasing demand by consumers for takeaway and optimizes the current infrastructure we have established so far, which includes a large network of kitchen facilities and membership database to drive sales.”
“We have allocated approximately RM10.0 million for new outlet openings in the current financial year (FY2022), including up to 20 kiosks. In terms of opening new restaurant outlets, we will be selective and prudent in the deployment of our resources. Our key focal point is on increasing the profitability at our restaurant division while at the same time maintaining our competitive edge and market presence. In view of the economic recovery, internal streamlining of operations and introduction of new concept outlets, we are confident that our restaurant division will perform well this year,” Tan Sri (Dr) Fumihiko Konishi concluded.
Texchem will continue to leverage on the strength of the Sushi King brand, which is well-established and recognized amongst the urban and suburban population in Malaysia. In the meantime, freshness of food and ingredients as well as hygiene at all Sushi King Group’s outlets remain one of the Group’s top priorities. Besides, Sushi King Group targets to drive sales at each outlet by having active seasonal promotions, continuous menu innovation and enhance loyalty via membership programme.
On the corporate front, Texchem has completed the acquisition of an additional 28.00% equity interest in Sushi King Group for a total cash consideration of RM102.2 million, which increased its stake to 98.35% from 70.35%. The Group now has control on the strategic direction and decision of the Sushi King Group’s business and is poised to benefit from the consolidation of the additional equity interest of Sushi King Group’s results moving forward.
About Texchem
Texchem was founded in 1973 as a textile chemical trader before transforming into a Malaysian conglomerate. The Group was listed on the Second Board of Kuala Lumpur Stock Exchange (KLSE) in 1993 and subsequently transferred to the Main Market of Bursa Malaysia Securities Berhad in 2001. Texchem’s headquarter is in Penang with presence in Malaysia and across ASEAN countries, serving customers in various countries. Today, the Group has 5 core business divisions – industrial, polymer engineering, restaurant, food and venture business.
The industrial division provides integrated sourcing and distribution solutions for polymer, plastic resins, industrial chemicals, food additives, dyestuff and textile chemicals to global and domestic customers. Meanwhile, the Group is also a polymer engineering solutions provider backed by strong in-house technological and design capability. It serves key industries such as data storage & memory, semiconductor, medical/life sciences, automotive, consumer electronics and fast-moving consumer goods. The production facilities are strategically located in major manufacturing hubs with 8 manufacturing facilities across 3 countries – Malaysia, Thailand & Vietnam.
Under the restaurant division, Texchem is the founder and operator of Sushi King, Malaysia’s largest Halal Japanese chain of restaurants with 121 outlets nationwide as at March 2022, which are supported by its integrated supply chain. Apart from Sushi King, the division also operates Hoshino Coffee, Miraku and Yamatoya.
The Group’s food division is engaged in the processing and marketing of marine products as well as aquaculture activities in Myanmar and Malaysia for export and domestic markets. Lastly, Texchem’s venture business initiates and nurtures new businesses which are synergistic to its existing core businesses. Currently, the division is focusing on TEXa, a patented and United States Department of Agriculture (USDA) certified durable bio-based polymer that is used to make products that can be reused multiple times, which promotes a circular economy.
