WHOLESALE and retail giant Mydin Mohamed Holdings Bhd, which is optimistic of achieving RM1.5 billion sales for the year ending March 31 2011, wants to strengthen its foothold in the country before considering overseas venture or listing. Managing director Datuk Ameer Ali Mydin said Mydin had met all the listing requirements but may only float its shares within three years from now, after it achieves economies of scale, including opening more outlets.
The home-grown retailer plans to open 14 hypermarkets within three years with over RM1.3 billion investment. Ameer said the investment will be funded via bond issuance, bank borrowings and build-and-sell to local institutional investors like the Employees Provident Fund and Tabung Haji. "We plan to issue RM350 million bond, which will cover the cost of three hypermarkets. "When we finalise the plan, we will decide whether it will be a sukuk or conventional bond," he told reporters after the fourth Economic Transformation Programme update in Kuala Lumpur yesterday.
Mydin, together with Carrefour and Tesco, in collaboration with Domestic Trade, Cooperatives and Consumerism Ministry, will invest RM5.43 billion over the next 10 years in the Transformation of Small Retailer Shops Kedai Runcit (TUKAR) project to help modernise traditional retail shops to enhance their competitiveness. A total of 5,000 traditional retail shops nationwide, to be identified by the ministry, will be involved in the project.
Ameer said Mydin is committed to transforming 100 retail shops a year to expand their sales to between 30 and 50 per cent. He said so far, it had transformed three retail shops in Merlimau and Kerdau. These shops had experienced between 30 per cent and over 50 per cent of sales increases. The makeover includes installing point-of-sale systems and improve the front and the back-end of the stores. "Mydin invests massively in time and manpower. It costs us about RM20,000 per store in terms of manpower, lodging and time," Ameer said, adding that Mydin also monitors the transformed shops every month.