KUALA LUMPUR (Sept 27): Federal Furniture Holdings Bhd (FFH) expects to see its supply contract with Starbucks China kicking in within the next eight to 12 months, as the company is nearing finalisation of the location of its pilot plant in China.

FFH managing director Datuk Choy Wai Hin said it is possibly leasing a 40,000 sq ft to 50,000 sq ft sized plant in Dongguan within the Guangzhou province, and has set aside capital expenditure ranging between RM5 million and RM10 million for the required machinery.

"Earnings from the Starbucks China project is expected to be recognised within one quarter from the commencement of the supply contract," its executive director Datuk Choy Wai Ceong told a press briefing here today.

For starters, the furniture and interior fit-out company is targeting to obtain contracts from 10% to 20% out of the 600 new stores which Starbucks intends to open in China during its first year of expansion.

Wai Hin said these stores would most likely be customised designs with highly-skilled craftsmenship, instead of the traditional Starbucks layouts, where average price per store could move up from US$17,000 previously, to about US$21,000.

FFH is also in the midst of formalising a fixtures supply contract with Tata Starbucks in India, with completion expected within six months from now.