Texchem to open 80 more Sushi King outlets by 2021

GEORGE TOWN: Texchem Resources Bhd will spend about RM80mil to open 80 new Sushi King outlets in the country until 2021.

Group executive chairman Tan Sri Fumihiko Konishi told Star Biz that the restaurant business is booming, growing at a double-digit percentage yearly, so more resources would be injected to fuel its expansion.

“This year, the capital expenditure of the group is planned to be around RM35mil, of which RM30mil is for the restaurant division while the remaining RM5mil will go to the industrial and polymer engineering divisions,” he said.

Konishi said the group would also this year set up five new Yoshinoya and Hanamaru restaurants, costing about RM750,000 each.

“There are presently 19 Yoshinoya and Hanamaru restaurants nationwide. Subsequently, there will be 20 new Sushi King restaurants opened each year until 2021,” he added.

As of Dec 31, 2017, there are 120 Sushi King outlets in the country.

Konishi added that both the industrial and polymer engineering divisions were also experiencing double-digit percentage growth yearly.

“The polymer engineering division makes semiconductor trays and packaging for harddisk drive.

“There are plans to diverse into manufacturing products to support the medical device and life science industries,” he said.

According to Konishi, Texchem’s performance for the financial year ending Dec 31, 2017 may be impacted by the closure of Texhem-Pack (Wuxi) in China and Dim Sum Delight Sdn Bhd in Malaysia, and the bad seafood landing in 2017.

Last April, Texhem-Pack (Wuxi) closed down as its customers had shifted out of

China.

Last July, Dim Sum Delight Sdn Bhd, the operator of two Michelin-star Tim Ho Wan restaurants in Malaysia, ceased operations due to challenging prospects.

Texchem owns 51% in Dim Sum Delight while the remaining 49% reportedly belongs to a Malaysian company owned by Angel Chong and Kelvin Khoo.

Konishi said the group had to provide impairments due to the closure of the two businesses.

“The bad seafood landing also eroded the profitability of the food division,” he said.

According to Konishi, although the financial performance maybe affected, the group is still confident of generating at least RM30mil in cash from its operations.

“This has been the trend for the past 20 years.

“The group’s cash in hand to-date is RM8 2.5 mil while the gearing is only 0.3 times,” he added.

Because of the bad seafood landing experienced over the past three years, the group would invest more in aquaculture farming soon, according to Konishi.

According to a Statistics Department’s report, there were 167,490 food and beverage establishments in 2015, registering an annual growth of 5.1% since 2010.

The economic census of food and beverage services revealed that the gross output generated by the services in these establishments was RM 66.4 bil, representing an annual growth of 12.2% or a total of RM 29.1 bil since 2010.

In line with this, there was an 11.2% annual increase in value add, totalling RM 28 bil in 2015.

The prospects of the food and beverage industry in the country is expected to be supported by stable economic growth projected for 2018.