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Tag: exits

  • Berjaya Food Exits Paris Baguette Joint Venture, Redirects Focus on Core Businesses

    Berjaya Food Exits Paris Baguette Joint Venture, Redirects Focus on Core Businesses

    Berjaya Food, a major player in the food and beverage industry, has concluded their collaboration with Paris Baguette, marking the end to the alliance that brought the esteemed South Korean bakery chain to Malaysia in 2023.

    In an effort to sever ties with the financially draining venture, Berjaya Food divested its 50% share in Berjaya Paris Baguette (BPB) to Paris Baguette Singapore for a token sum of RM1 (US 24 cents). Executed on June 30, this transaction included the transfer of 20 million ordinary shares. This was accompanied by Berjaya Food’s settlement of RM3.91 million (about $960,920) in outstanding liabilities.

    A Challenging Operation

    The Malaysian branch of the business has persistently reported losses since its commencement. As per recent records, BPB reported an unaudited, post-tax loss of RM67.09 million ($16.49 million) and net liabilities of RM33.41 million ($8.2 million). The RM20 million ($4.9 million) pumped into the venture by Berjaya Food is fully impaired.

    Berjaya Food has clarified that the divestiture of BPB is a strategic move to step away from the “Paris Baguette” chain of bakery and retail stores in Malaysia, which has continually underperformed since its introduction in the country. This decision, they explain, will help to eliminate the group’s exposure to BPB’s continuous financial losses.

    Looking Ahead

    Berjaya Food can now channel its resources and managerial attention to its principal businesses and future growth prospects. Paris Baguette, on the other hand, first set foot in Malaysia in 2023 and currently manages 16 locations across the country.

    Berjaya Food’s decision to divest comes at a time when the group is grappling with wider earnings pressure. Last year, the company reported its fifth consecutive quarterly loss, largely contributed by weaker performance at its Starbucks Malaysia business.

    Questions & Answers

    Why has Berjaya Food chosen to exit the joint venture with Paris Baguette?
    Berjaya Food decided to exit the joint venture due to consistent financial losses, deciding instead to focus on their core businesses and future growth opportunities.

    What was the extent of Berjaya Food’s investment in Berjaya Paris Baguette?
    Berjaya Food’s investment in the venture amounted to RM20 million ($4.9 million), which has now been fully impaired.

    What has been the impact of the divestment on Paris Baguette’s presence in Malaysia?
    Paris Baguette continues to operate in Malaysia, currently managing 16 locations across the country. The divestment has not affected its operational presence.

  • Cafe Amazon Retreats From Vietnam: Intense Competition Spurs Strategic Pivot For Centel

    Cafe Amazon Retreats From Vietnam: Intense Competition Spurs Strategic Pivot For Centel

    Thailand’s Cafe Amazon seems prepared to bow out from the local market after a half-decade attempt to square up with local coffee chains. At the forefront of this decision is Central Plaza Hotel Public Company Limited (Centel), who will be stepping away from the Cafe Amazon joint venture in Vietnam. This move indicates a strategic pivot in response to the fierce competitive landscape in Vietnam’s coffee sector.

    Centel’s withdrawal implicates the dissolution of the ORC Coffee Passion Group Joint Stock Company (ORCG), the corporation responsible for the operations of Cafe Amazon within Vietnam. ORCG was a partnership between Centel’s indirect subsidiary, Central Restaurants Group (Vietnam), which owns a 40 per cent stake, and PTTOR International Holdings (Singapore), another subsidiary of the publicly-traded Thai firm PTT Oil and Retail Business, with a 60 per cent stake.

    In an official statement, Centel underscored the necessity to “realign business priorities” and adapt to the pressing challenges in the market. As of the end of August, the company’s investment in the venture amounted to THB 56 million (US$1.72 million).

    This decision marks the end of Centel’s involvement in Cafe Amazon’s expansion into Vietnam, an ambitious initiative that was launched in 2020 with the goal of becoming a top global coffee brand. Unfortunately, the stiff competition from both international and local chains proved to be too daunting.

    Questions & Answers

    What is the primary reason for Cafe Amazon’s exit from Vietnam?
    Intense competition from local and international coffee chains is the main reason behind Cafe Amazon’s exit from the Vietnamese market.

    What percentage of ORC Coffee Passion Group Joint Stock Company (ORCG) does Central Restaurants Group (Vietnam) hold?
    Central Restaurants Group (Vietnam), an indirect subsidiary of Centel, holds a 40 per cent stake in ORCG.

    When did Cafe Amazon originally plan its expansion into Vietnam?
    Cafe Amazon initiated its ambitious expansion into Vietnam in 2020, with the goal of becoming a top global coffee brand.

  • Gong Cha Exits Singapore Market After Franchise Agreement Ends; Plans For A Revamped Return Underway

    Gong Cha Exits Singapore Market After Franchise Agreement Ends; Plans For A Revamped Return Underway

    Taiwan’s popular milk tea brand, Gong Cha, has ceased operations and shuttered all its outlets island-wide as of October 1. This move follows the expiration of its franchise agreement with Gong Cha Singapore, which has been running the brand’s operations since 2017.

    All the physical stores were abruptly closed, and the brand’s digital presence was also taken down, including its website, social media accounts, and listings on food delivery platforms.

    Kang Puay Seng, Gong Cha Singapore’s CEO, confirmed these developments, expressing his gratitude to customers, staff, and business partners for their support.

    Future Prospects

    Gong Cha’s Global has confirmed plans to re-enter the Singapore market next year. The global CEO, Paul Reynish, stated that the company is currently in the process of selecting a new master franchisee and will relaunch with an updated ‘Gong Cha 2.0’ store concept, which has already been successfully implemented in select international markets.

    Gong Cha initially entered the Singapore market in 2009 but later withdrew due to a franchise dispute. The brand then re-entered the market under a new agreement with its now-former franchisee.

    The decision to exit the Singapore market follows a period of strong global performance for the brand. Earlier this year, Gong Cha reported an impressive US$600 million in system-wide sales for the 12 months ending in December, a milestone attributed to its aggressive international expansion.

    Questions & Answers

    What is the reason for Gong Cha’s exit from the Singapore market?
    Gong Cha’s exit from the Singapore market followed the end of its franchise agreement with Gong Cha Singapore.

    Will Gong Cha return to the Singapore market?
    Yes, Gong Cha Global has announced plans to re-enter the Singapore market in the coming year with a new master franchisee and an updated ‘Gong Cha 2.0’ store concept.

    What has been Gong Cha’s performance in the past year?
    Gong Cha reported strong global performance, with system-wide sales reaching $600 million for the 12 months ending in December. This success is mainly attributed to the brand’s rapid international expansion.

  • Coca-Cola Europacific VP Peter West Announces Retirement, Gareth Mcgeown To Take Helm

    Coca-Cola Europacific VP Peter West Announces Retirement, Gareth Mcgeown To Take Helm

    Peter West, the current Vice President and General Manager of Coca-Cola Europacific Partners’ Australia, Pacific, and Southeast Asia (APS) division, has announced his forthcoming retirement at the end of the year. His departure concludes an impressive 35-year trajectory in the Fast-Moving Consumer Goods (FMCG) sector.

    Contributions and Achievements

    West commenced his tenure with Coca-Cola Amatil in 2018, taking on the role of Managing Director for Australian beverages. He became an instrumental figure in incorporating the APS region into Coca-Cola Europacific Partners (CCEP) after the company’s successful acquisition in 2021.

    Damian Gammell, CEO of Coca-Cola Europacific Partners, praised West’s performance, noting that his contributions had been transformative for both the Australian division and the wider region. Gammell pointed out West’s profound industry knowledge, his comprehension of the market landscape, and his capacity to stimulate growth in various markets. These attributes have earned West widespread respect within and outside the company.

    Prior to his role at Coca-Cola, West held high-ranking leadership positions at prominent companies such as Lion Dairy & Drinks, Mars Confectionery, and Arnott’s.

    Leadership Transition

    West’s successor, as of January 1, will be Gareth McGeown, who is currently the General Manager of CCEP Philippines.

    Reflecting on his career, West claimed that his tenure at Coca-Cola, and his role in the expansion and growth of Coca-Cola Europacific Partners, were the highlights of his professional life. He expressed his excitement about passing his responsibilities to McGeown, praising his expertise, enthusiasm, and strong business acumen. West is confident that McGeown will maintain the momentum of growth in the region.

    Questions & Answers

    Who will succeed Peter West as the Vice President and General Manager of Coca-Cola Europacific Partners’ APS division?
    Gareth McGeown, the current General Manager of CCEP Philippines, will succeed Peter West.

    When did Peter West join Coca-Cola Amatil?
    Peter West joined Coca-Cola Amatil in 2018 as the Managing Director of Australian beverages.

    What companies did Peter West work for before joining Coca-Cola?
    Prior to Coca-Cola, West held leadership positions at Lion Dairy & Drinks, Mars Confectionery, and Arnott’s.