KUALA LUMPUR: Home-grown wholesale and retail giant, Mydin Mohamed Holdings Bhd, is investing RM1.4bil to set up 14 new hypermarkets throughout the country over the next three years.“We will fund the expansion through bank borrowings and bonds, and build, transfer and lease back the property,” managing director Datuk Ameer Ali Mydin said on the sidelines of the Economic Transformation Programme (ETP) Progress Update 4 yesterday.
He said the group was looking at raising some RM350mil via bonds to finance the hypermarket expansion. We will announce it when the time comes,” Ameer said when asked about the nature of the bonds. We are looking at RM350mil via bond issuance. It can fund three hypermarkets one in Seremban and two in Johor Baru. Opening a hypermarket is expensive, he added.On average, it costs about RM150mil to build a hypermarket and typically it is at least 50,000 sq ft. It takes about 12 to 15 months to complete a hypermarket.Ameer explained that Mydin had sold a mall to Lembaga Tabung Haji and that the company was currently leasing it from the former to unlock the value of its property. He said Mydin was in discussions with potential buyers for other properties, but he did not disclose details.
According to its website, Mydin operates 72 outlets nationwide five hypermarkets, 18 emporiums, two bazaars, 35 mini markets (MyMydin), six convenient stores (MyMart) and six franchise outlets (Mydin Mart). All the hypermarkets are located in MYDIN Malls. Asked if Mydin would go for regional expansion, Ameer said it would focus on the domestic market first before venturing overseas. I don't see Mydin expanding overseas for nowperhaps in the next five years. We will cross the bridge when we have to,& he said.
On a possible listing, Ameer said Mydin was in no hurry to float.“Give us a few more years. When we list, we will be really big,he said, adding that Mydin was looking at a listing may be three years from now. We are listing not because of money but to increase transparency,Ameer said. Mydin, he said, expected a turnover of RM1.5bil for the current year ending March 31, 2011. Meanwhile, Mydin, Carrefour and Tesco will collaborate with the Domestic Trade, Cooperatives and Consumerism Ministry and invest RM5.43bil over the next 10 years in the Transformasi Kedai Runcit (Tukar) project. The goal of the project is to modernise the traditional retail shop and increase its level of competitiveness.
In his speech yesterday, Prime Minister Datuk Seri Najib Tun Razak said the gross national income (GNI) of the Tukar project was RM5.56bil by 2020 and was expected to create 51,540 jobs.A pilot project has indicated an improvement of up to 30% in sales. This entry point project under the wholesale and retail national key economic area is expected to generate a GNI contribution of about RM5.56bil by 2020,” he said. Mydin, Carrefour and Tesco will take on the role of consultants to help give a new lease of life to traditional retail outlets in terms of preparation, training and others.
Their involvement will be part of their corporate responsibility programmes to develop the local wholesale and retail sector.Tesco has given its commitment to transform 150 retail shops and Carrefour, 400 shops.Ameer said Mydin had given its commitment to modernise 100 retail shops this year.He said two retail shops in Malacca Kedai Runcit Bandar Baru Merlimau and Pasar Mini Maznah which have gone through the transformation saw their sales increase by 30%.