KUB will sell A&W business if price is right
However, it reaffirms commitment to 3-year development agreement ending June 2019
KUB Malaysia Bhd is open to selling its A&W Malaysia fast-food business if the price is right.
Its president and managing director Datuk Abdul Rahim Mohd Zin said the group had received several offers for the fast-food franchise.
“We have obtained several proposals for our A&W business,” he said after the company’s shareholders’ meeting, here, yesterday.
“We are presently evaluating them. It depends on the right price. If the right price comes, we are open to it,” said Rahim.
“My rationale is capital rationing. If the right opportunity presents itself, we will make a call on whether to continue with this business or to invest more in other sectors that offer better, quicker financial returns for us,” he added.
Rahim, however, reaffirmed KUB Malaysia’s commitment to a three-year development agreement ending June 2019 with A&W master franchisor Yorkshire Global Restaurants Inc.
“We’ll comply with the development agreement, we have to preserve the value of the asset by continuing to invest in new stores in compliance to the (franchise development) agreement,” he said.
Rahim said the group had allocated RM25 million to continue with expansion plans under the agreement, comprising eight new stores next year and nine more in 2019.
KUB Malaysia currently has 35 A&W outlets nationwide.
When asked on the redevelopment of the iconic A&W restaurant in Lorong Sultan, Petaling Jaya, he said Petaling Jaya City Council would give its approval by July.
“We’ll be building a tower with office and retail space. The gross development value of that land parcel amounts to RM245 million,” said Abdul Rahim.
To another query on its plan to set up the first refrigerated liquefied petroleum gas (LPG) terminal, he revealed that the investment cost would be about US$70 million to US$80 million (RM301 million to RM344 million).
“By boosting our LPG storage capacity by a further 50,000 tonnes at Westports, we’ll be able to reduce landed costs and increase market share for our Solar Gas business,” he said.
Its wholly-owned subsidiary, Summit Petroleum (M) Sdn Bhd, is involved in the bottling, marketing and distributing of LPG as cooking gas for households and industrial uses under the brand name Solar Gas.
“The design work and costing of the refrigerated LPG terminal will take six months and the construction will take three years,” he added.
With annual supply of 10,000 tonnes, Solar Gas has a market share of some 10 per cent, with its own ocean terminal-cum-bottling plant in Westports, Pulau Indah.
KUB Malaysia president and managing director Datuk Abdul Rahim Mohd Zin (left) and chairman Datuk Ahmad Ibnihajar at a briefing in Kuala Lumpur yesterday.