Texchem’s Sushi King Poised to Ride on Borders Reopening and Economic Recovery

The founder and operator of Sushi King, the largest Halal Japanese chain of restaurants with 121 outlets nationwide as at March 2022, Texchem Resources Bhd (Texchem) is confident that the Group’s restaurant division will benefit from Malaysia’s economic recovery and opening of international borders.

Texchem implemented various rationalization initiatives to focus on improving Sushi King Group’s operation and cash management during the heights of the pandemic. These measures included the closure of its operations in Indonesia and certain non-performing outlets in Malaysia. After closely reviewing the performance of each outlet, the total number of restaurants have been streamlined to the current number of outlets, as compared to nearly 150 prior to the Covid-19 pandemic.

The loss before tax (LBT) for its restaurant division, which includes other companies under this division, was narrowed down substantially. LBT for the restaurant division was reduced to RM1.3 million (FY2021) versus RM15.0 million (FY2020) a year ago.

As part of its brand refreshing exercise, the Sushi King Group had introduced automation for customers to self-order and robotic trays for the delivery of orders, thus reducing manpower requirements.

The group has also registered an increase on its loyalty programme members to over 850,000 currently as a result of continuous new menu creation and intensified marketing and promotional activities,

“Today, the Sushi King Group’s operations is leaner with a healthier cost structure and higher operational efficiency. This will translate to a positive impact on our financial performance as demand for dine-in at our existing restaurant outlets have rebounded after the easing of movement control order restrictions. Moreover, the opening of international borders will continue to spur demand as tourist arrivals in Malaysia will benefit the F&B retail industry,” Executive Chairman of Texchem, Tan Sri (Dr) Fumihiko Konishi said.

“Moving forward, the strategy is to focus on opening additional outlets that feature different concepts such as Sushi King kiosk and Sushi King satellite outlets that serve takeaway sushi. The benefits of these new concept outlets are that they require much lower capital expenditure and shorter time to launch. As these outlets will be strategically located at new locations with high footfall, we are able to target a larger customer base while leveraging on Sushi King Group’s existing kitchen facilities in the nearby restaurants. This will drive incremental revenue without having to incur high investment costs.”

“We have allocated approximately RM10.0 million for new outlet openings in the current financial year (FY2022), including up to 20 kiosks. In terms of opening new restaurant outlets, we will be selective and prudent in the deployment of our resources. Our key focal point is on increasing the profitability at our
restaurant division while at the same time maintaining our competitive edge and market presence. In view of the economic recovery, internal streamlining of operations and introduction of new concept outlets, we are confident that our restaurant division will perform well this year,” he concluded.

On the corporate front, Texchem has completed the acquisition of an additional 28.00% equity interest in Sushi King Group for a total cash consideration of RM102.2 million, which increased its stake to 98.35% from 70.35%.

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