Koufu

Email This Print ThisOur Business Strategies And Future Plans

We believe we can leverage on our track record and the experience of our management team to further expand our network of F&B Outlets and to grow our F&B retail business in Singapore and overseas.

In Singapore, we intend to establish new F&B Outlets in suitable strategic locations where available, with a focus on hospitals, commercial malls, tertiary educational institutions and new housing estates. We opened a new Cookhouse food court at Marina One at the end of 2017 and a new Koufu food court at Fusionopolis in January 2018. We also opened a new Gourmet Paradise food court and a new R&B Tea F&B kiosk at Oasis Terraces in June 2018.

Going forward, we will be opening a Koufu food court at Sengkang General and Community Hospital and a Supertea F&B kiosk at Marina Bay Sands in July 2018 and we also have plans to open two new Koufu food courts at 1 Tampines North Drive 1, T-Space, Singapore 528559 in 4Q 2018 and at 4 Bukit Batok Street 41, Singapore 657991 in 2020. The Koufu food court at Sengkang General and Community Hospital marks our first foray into establishing our presence in hospitals in Singapore.

Having accumulated extensive in-house knowledge and contacts through our overseas business ventures, we also intend to increase our overseas footprint with an initial focus in Macau. In addition to our Koufu food court, we have also established our first Supertea F&B kiosk at Sands Cotai Central in Macau in May 2018 and have begun negotiations with several commercial landlords and developers to establish new F&B Outlets in the country.

We intend to further develop our Elemen brand concept by strengthening its business model, value proposition, nutritional value and food presentation. As at the Latest Practicable Date, we have opened three full-service restaurants under our Elemen brand in Singapore, with another outlet opening at Paya Lebar Quarter in 1Q 2019. Going forward, we plan to open more of our Elemen full-service restaurants in Singapore and overseas.

We intend to use Singapore and Macau as springboards for expansion into overseas markets, which may also potentially include the PRC, Malaysia, Indonesia and Australia (in respect of our Elemen full-service restaurants only), as and when suitable opportunities arise.

In addition to establishing new F&B Outlets, we have been and will continue to refurbish and renovate our existing F&B Outlets in order to maintain the suitability of use by our customers and encourage repeated patronage of our F&B Outlets.

We intend to use approximately S$8.0 million of the net proceeds due to us from the Offering and the issuance of the Cornerstone Shares to refurbish and renovate our new and existing F&B Outlets.

We intend to establish an integrated facility to expand the central procurement, preparation, processing and distribution functions of our existing central kitchens. In particular, our proposed integrated facility will comprise a larger central kitchen which is intended to better support our F&B retail business and to cater for future business expansion. This will enable us to meet the requirements of our F&B Outlets and self-operated F&B stalls, as well as having available capacity to support our future growth. Due to space constraints, the production capacities at our existing central kitchens are limited. Accordingly, some of the food preparation and processing, which could have been done centrally, is currently being done on-site at our F&B Outlets and self-operated F&B stalls. We believe that the larger central kitchen will enable us to enhance our productivity and operational efficiency in producing larger food quantities while maintaining high standards of food quality and consistency. In addition to supporting our own F&B Outlets and self-operated F&B stalls, we can also utilise available capacity to manufacture and supply semi-finished and/or finished food products to the stall operators at our food courts and coffee shops, as well as third party businesses, thereby providing an additional source of revenue for our Group. This will facilitate our growth in the F&B industry and enable us to capture a larger market share.

Based on current plans, our proposed integrated facility will have a gross floor area of approximately 20,000 sq m, which is more than five times larger than the aggregate gross floor area of approximately 3,500 sq m of our existing central kitchens and corporate headquarters.

Overall, the centralisation and expansion of our procurement, preparation, processing and distribution functions at a larger central kitchen is expected to lead to improved inventory control and an overall decrease in overheads. We intend to acquire new commercial grade kitchen equipment and develop new information technology systems. We also intend to obtain the relevant certifications to ensure that the central kitchen at our proposed integrated facility meets national and international food safety and assurance standards, such as the ISO 22000:2005, HACCP and SS 590:2013 certifications.

We also intend to establish a centralised dishwashing facility at our proposed integrated facility, which will automate the dishwashing process and service our F&B Outlets located in the northern and western areas of Singapore. We believe this will also improve our productivity and operational efficiency.

We have accepted an offer for lease of a property located at Woodlands Avenue 12 granted by JTC for this purpose and intend to use approximately S$30.0 million of the net proceeds due to us from the Offering and the issuance of the Cornerstone Shares to fund the total estimated expenditure for the abovementioned activities.

Depending on the available opportunities, feasibility and market conditions, we may explore joint ventures, strategic alliances, acquisitions or investment opportunities in complementary businesses. Through potential vertical integration with key suppliers, manufacturers and/or other service providers, we may gain access to new markets, strengthen our market position and/or develop our supply chain. When evaluating such opportunities, we will consider factors such as the acquisition of capabilities, skills, technology and/or operational processes which are synergistic to our business.

In particular, we see opportunities to leverage on our proposed integrated facility as a value proposition to potential partners. For example, Koufu, our subsidiary, has entered into a non-binding memorandum of understanding for the proposed acquisition of a majority shareholding interest in a business-to-business bakery. Upon completion of the acquisition, which is targeted for 4Q 2018, the joint venture business is intended to lead the expansion of our bakery, confectionery and hot kitchen food production business. Upon our proposed integrated facility becoming operational in 2020, we intend to relocate the manufacturing operations of the aforementioned joint venture business into our proposed integrated facility. We believe that such joint venture arrangements will leverage on the specialist expertise of our partners, and may also potentially expand our business to include the supply of certain food products to third parties, gain access to new markets both locally and overseas, and potentially provide additional sources of revenue for our Group.

In relation to the centralised dishwashing facility at our proposed integrated facility, we intend to explore partnering with a dishwashing service provider, who will, as part of the joint venture, relocate its existing facilities to our proposed integrated facility and transfer its business expertise and some of its existing business contracts to the proposed joint venture. In doing so, our centralised dishwashing facility will have a larger scale and may potentially deploy more sophisticated dishwashing equipment with improved margins and ultimately benefit our Group.

In addition, we also intend to identify suitable partners to establish joint venture arrangements or strategic alliances in the F&B retail business which typically require specialised skill sets and unique resources that we may not have. For example, Hock Kee F&B, an associated entity of our Company in which we hold 30.0% equity interest, is established for the purpose of operating F&B stalls selling chicken rice in our food courts and coffee shops. The remaining 70.0% interest in Hock Kee F&B is held by our joint venture partners, who have experience in operating stalls in food courts and coffee shops selling chicken rice. Our Group may contribute management expertise, infrastructure support and offer these potential partners priority to F&B stalls within our food courts and coffee shops, while these potential partners may contribute positively to our business operations in terms of manpower, recipes and innovative cooking techniques. We believe this is a mutually beneficial arrangement which is expected to allow us to grow our pool of potential stall operators, while concentrating on our core F&B retail business of operating our drinks, fruits, desserts and dim sum stalls. This will enable us to optimise the mix of stall operators in our food courts and coffee shops, increase the available F&B menu offerings, as well as expand our F&B retail business.

We intend to use approximately S$5.0 million of the net proceeds due to us from the Offering and the issuance of the Cornerstone Shares to fund such joint ventures, strategic alliances, acquisitions or investments.

To further improve our productivity, we will continue to innovate and automate our processes via the increased use of technology throughout the business and operations of our Group. This will ensure that we remain relevant to customers, while differentiating ourselves in the highly competitive F&B industry.

For example, having experienced preliminary success in terms of productivity and cleanliness at certain of our food courts and coffee shops with our smart tray return robots, we are working to improve the design and features of these robots and intend to deploy these robots to as many of our food courts and coffee shops as possible. We are also collaborating with the same robotics solutions vendor to design a machine that can automate the traditional coffee brewing process in order to ensure consistency in taste and quality of the coffee served across our food courts and coffee shops, which may potentially be deployed to our F&B Outlets located overseas in the future. We also intend to progressively roll out mobile ordering applications to our food courts and coffee shops in order to further improve service delivery to our customers and our operational efficiency.

We believe there is a growing demand for online food ordering and delivery services due to the changing lifestyles and the convenience such services offer to time-stretched consumers. At the same time, delivery of food to consumers is a channel for our F&B Outlets and self-operated F&B stalls, as well as third party stall operators in our food courts and coffee shops to reach out to a wider customer base and capture additional sales revenue. We believe the menu offerings at our F&B Outlets will be attractive to consumers due to the large variety of F&B products offered across our F&B Outlets, our self-operated F&B stalls and by the various third party stall operators at our food courts and coffee shops.

We are collaborating with third party service providers to make available a selection of F&B products from certain of our F&B Outlets in Singapore on their respective online food ordering and delivery platforms. We intend to roll out online food ordering and delivery services to most of our F&B Outlets by 2019. We will continue to enhance and improve our operations and businesses processes to work effectively with such other third party online food ordering and delivery service providers.

 

Corporate Information