This article first appeared in The Edge Financial Daily on May 24, 2018

KUALA LUMPUR: Loss-making DBE Gurney Resources Bhd expects a “good turnaround” within two years by expanding its network of HARUMi fried chicken outlets.

“The problem now is that the number of restaurants is not enough, so we need to put more effort and focus on the expansion plan” said managing director Datuk Alex Ding Seng Huat.

Ding said DBE aims to have 30 HARUMi restaurants and signature outlets by 2020, besides 3,000 free standing kiosks and 300 food trucks.

At present, the integrated poultry group has eight such restaurants and signature outlets, 220 kiosks and five food trucks.

“The group also plans to grow its overseas market for HARUMi. Its target is to have 50 HARUMi restaurants across China, Taiwan, Indonesia and Thailand by 2020,” said Ding.

He said the HARUMi business is more profitable compared with its traditional activity of selling processed chicken to wet markets as the selling price is three times higher.

Ding was speaking at a press conference after signing an agreement with Thailand’s Farmmesh Foods Co Ltd to jointly establish a private limited company to operate a chain of quick service restaurants in Thailand under the HARUMi system.

Ding sees great potential in Thailand, and expects a 5% to 10% annual growth in terms of the number of outlets in Thailand, given that “its population is 65 million which is double that of Malaysia’s.”

DBE said its wholly-owned subsidiary DBE Poultry Sdn Bhd will own 30% of the company, while Farmmesh will have the remaining 70%.

“This JV (joint venture) business would allow its HARUMi brand to expand to Thailand, following its early expansion into Taiwan, in addition to the existing outlets in Malaysia,” the group said in a statement.

For the year ended Dec 31, 2017, DBE posted a net loss of RM20.31 million, versus a net profit of RM250,000 a year earlier. Revenue fell to RM111.73 million from RM112.98 million.

DBE Gurney’s share price closed unchanged at 3.5 sen, giving it a market capitalisation of RM93.74 million.