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Malaysia’s KFC Holdings has embarked on a vast expansionstrategy. The company says that it is its employees that helpdrive the momentum. Reports Tina Lofthouse.

FASTER FOOD

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Kentucky Fried Chicken, now morecommonly known as simply KFC, isone of the world’s most recognised

fast-food brands. It came to Malaysia in1973 with its first outlet in Jalan TuankuAbdul Rahman, Kuala Lumpur’s shoppingarea, and the Malaysian restaurant’s inno-vations, such as Kentucky Nuggets, havebeen taken up by the company globally. KFC Holdings (Malaysia) Bhd, a sub-

sidiary of QSR, now operates over 620 KFCrestaurants in Malaysia, Singapore, Bruneiand India, and is also the franchisee forPizza Hut in Malaysia and Singapore. Thecompany owns the Ayamas brand of freshchickens and processed chicken productsand operates the RasaMas Restaurants andKedai Ayamas chain of convenience stores. In addition to its restaurant opera-

tions and retail activities, it is alsoinvolved in breeder and contract broilerfarming, hatchery and poultry produc-tion and processing, as well as a hostof ancillary businesses including bakingand sauce production. Clearly, its reach is great, but it is not

content to stop there. For example, ithas just expanded into the state ofMaharashtra, India, with five KFC outletsin Mumbai and Pune. “The two citieshave an estimated population of 26 mil-lion, which presents a huge opportunityfor the group to explore and grow,” saysManaging Director, Jamaludin Md Ali.“We plan to be the leading KFC fran-chisee in Maharashtra within the nextfive years.” At home, the group plans tocontinue to build new outlets and addnew product variants under its Ayamasbrand to increase its market share in thechicken-based product segment.To keep pace with its expansion strategy,

the group undertook two infrastructure proj-ects in 2009 to boost production perform-ance. Firstly, Ayamas Food CorporationSdn Bhd upgraded the capacity of its PlantB plant in Klang, which produces Ayamas’Further Processed Products such as

nuggets and frankfurters, to meet thegrowing demand from the group’s restau-rant chains and the open market. Theplant’s capacity has now been increasedto 1,500MT (metric tonnes)/month from650MT previously. Secondly, Region FoodIndustries Sdn Bhd upgraded the capacityof its mayonnaise production plant from167MT to 334MT.

Motivated workforceBut crucial to its expansion plans are itsemployees, which number 18,000 nation-wide. “We have our staff to thank forkeeping the momentum of the groupgoing, and to reward them, and to improvethe results of the group going forward, wehave enhanced our range of training initia-tives and human capital development pro-grammes. Raising levels of motivation andloyalty amongst our staff, enabling themto reach their fullest potential, is a job wetake seriously, which is why we will con-tinue to invest in new ways to keep ourpeople at the top of their game,” saysJamaludin Md Ali.Its programmes include a new training

initiative for newly promoted employeesto enhance levels of competence in coreareas such as finance, industrial relations,management or supervisory skills, occupa-tional safety, and business communication.The company also uses Key PerformanceIndicators (KPIs) to help motivate staff.Explains Jamaludin Md Ali: “We make thegroup’s KPIs both measurable and achiev-able in order to ensure a greater level ofbuy-in from staff. We also link KPI achieve-ment to incentives to reward hardworkingemployees.” Last year, the companyacquired Paramount International Collegeto train employees in business, hospitality,culinary arts, restaurant management andHalal management studies.A well-trained and motivated workforce

is key going forward, especially againstincreased competition from both interna-tional and local restaurant chain operators,

We have our staff to thank for keeping the momentum of thegroup going, and to reward them, and to improve the results of the group going forward, we have enhanced our range of training initiatives and human capital development programmes

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as well as coffee shops, traditionalhawker stalls and food courts. JamaludinMd Ali notes that KFC and Pizza Hut havethe biggest market share in Malaysia –44 per cent – in terms of outlets. On-going product innovation as well as per-sistent marketing and promotionalstrategies will be used to stay ahead of the competition, as well as networkexpansion with the opening of new out-lets at strategic locations based upon a Return On Investment assessment.The recession impacted the business,

although it was quick to bounce back.“Corresponding with the adverse eco-nomic conditions which were most evidentin Q1 2009, coupled with the anti-Americansentiment which arose in January/February 2009, KFC sales were affectedwith decline in the same store sales growth(SSSG) against Q1 2008,” says JamaludinMd Ali. “Nonetheless, sales picked up insubsequent quarters with overall perform-

ance in 2009 showing improvementagainst 2008 with the group registering5.4 per cent year-on-year revenue growthand 10.3 per cent in terms of net profit.The group’s performance was back ontrack in 2010 with YTD September 2010[unaudited results] showing revenue andprofit growth of 9.9 per cent and 13.9per cent respectively.”

Community spiritWhile the company is obviously proud ofwhat it has achieved, it believes that withsuccess comes responsibility and it takesits Corporate Social Responsibility (CSR)strategy very seriously. The group’s CSRactivities are carried out through the not-for-profit foundation Yayasan Amal Bistari,which supports initiatives in education,entrepreneur development, sports, andhelp for the less fortunate. “We put great emphasis on conducting

business in a responsible and ethical

way,” adds Jamaludin Md Ali. “Fromimprovement to our products and serv-ices to helping the communities in whichwe operate, we continue to seek outways to enrich the lives of those aroundus. It is about strengthening local commu-nities, promoting equal opportunities inthe workplace, developing human capital,enhancing our customers’ experience andimproving the lives of those around us.”n

From improvement to ourproducts and services tohelping the communitiesin which we operate, wecontinue to seek outways to enrich the lives ofthose around us

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