Bison’s two JVs garner optimistic views
KUALA LUMPUR: Bison Consolidated Bhd’s (Bison) two recent joint ventures (JVs), known as MyNews Kineya Sdn Bhd (MyNews Kineya) and MyNews Ryoyupan Sdn Bhd (MyNews Ryoyupan) have garnered optimistic views from analysts.
In a filing on Bursa Malaysia, Bison announced that it had on October 5, 2017 entered into two separate JV Agreements for the group’s food preparation and packaging facility in Rawang, Selangor to develop, produce and sell ready to eat (RTE) food and bakery products.
The research arm of Kenanga Investment Bank Bhd (Kenanga Research) came away feeling optimistic from the signing event of the two joint ventures, known as MyNews Kineya and MyNews Ryoyupan, which are expected to support Bison in-house foodprocessing facility which is also set to be completed end-current year 2018 (CY18).
According to Kenanga Research, Bison has acquired a piece of land in Rawang measuring 1.4 acres or 60,000 square feet (sq ft) for RM6.8 million or RM113 per square foot (sf) on July 22, 2016 and is expected to build up to five-level foods processing facility with built-up area of more than 130,000 sq ft (the total expected cost is RM42 million).
The research arm noted that the target commencement of operation is on CY19 and expected to supply 150 stores, with subsequent rollout to other stores (expected full capacity up to 600 stores).
“The 100 per cent halal manufacturing facility will produce affordable and quality RTE,” the research arm said.
“As the facility is just 500 metres away from its existing main distribution centre, Bison is expected to benefit logistically from close proximity when the food-processing centre is completed by endCY18.”
Moving forward, Kenanga Research highlighted that Bison is targeting to open circa 70 new stores for financial year 2017 (FY17) and has revised higher the group’s target to circa 90 new stores for FY18. As of September 30, 2017, Bison has a total of 367 stores.