KUALA LUMPUR: Berjaya Food Bhd (BFood) has inked a joint venture agreement with Paris Baguette Singapore plc to open the South Korean bakery across Malaysia, with plans to launch five stores this year.
BFood will hold a 50% stake in the joint venture and will have the exclusive rights as the local operating licensee of Paris Baguette stores in Malaysia, the bakery’s eighth international market globally.
BFood group CEO Datuk Sydney Quays said there are many Japanese-inspired bakeries in the market but Paris Baguette, which is French Korean-inspired, is not what Malaysia has at the moment. It fills a void in the market and he is confident that Malaysians will embrace the brand like the Singaporean, Indonesian, Vietnamese as well as French consumers did.
Paris Baguette's parent company SPC Group has started building its regional manufactoring and distribution centre in Johor.
Paris Baguette Southeast Asia CEO Hana Lee said the group takes its business in the Southeast Asian market and the halal market seriously, which explains why the group is opening its first halal factory in Johor.
“We put in quite a lot of investment in this (the factory in Johor). We believe that within the Southeast Asia market, which is Malaysia and Indonesia, the two largest Muslim markets, will be the start. The aim is to support our growth into the Middle East,” she said at a press conference in conjunction with the joint venture signing ceremony.
Lee said although its regional headquarters for Southeast Asia is in Singapore, it is clear to the group that the target is the Muslim market, and has to be halal-certified.
“We want to have the best halal certification and we recognise that the Malaysian Jakim halal certification is one of the most renowned and the best in the region and in the world. We want to make sure that certification is recognised in the Middle East countries as well as the Southeast Asian countries. Also, we wanted to make sure that it's near to Singapore. In fact, because of the ongoing development, we travel almost weekly to Johor right now. It's very convenient,” she shared.
Lee said the group is trying its best to manage costs by opening a factory in Malaysia although currently its major factories are in South Korea, as well as getting the best ingredients at the lowest possible prices to achieve economies of scale.
“We have a lot of proprietary ingredients that are related to bakery items. For bread and pastries, those are proprietary items. But other than that, like what go into a sandwich, such as lettuce, chicken, and tomato, are locally sourced to manage costs,” she said.
Lee explained that generic products such as sliced white bread will be more affordable but premium items such as its specialty softness bread will have a more premium pricing, but for these items it “tries to do better than competitors”.
“(But) the costs of electricity, gas are rising. So we will have to see how it is managed along the way but I think that other than passing the costs to consumers, it is also about creating value. When we are ready to launch by the end of this year, we'll make sure that we are priced at the level that will be suitable for our brand and consumers as well as providing the value,” she said.
Quays said it does not deny the impact of what is happening in the global environment. The group is conscious of pricing and will price Paris Baguette products accordingly.
“If you see the different brands that we have under the BFood umbrella, for example if you go to Kenny Rogers Roasters today, you will (still) get chicken. So it's not affected us in a way that it disrupts our business to a big extent.
“More importantly, we have not increased prices in any way. We may have to sacrifice margins a little bit for now and that's what we are prepared to do.”
The brands under BFood’s umbrella include Starbucks Coffee in Malaysia and Brunei, Kenny Rogers Roasters in Malaysia, Jollibean in Singapore and the vegan tex-mex inspired restaurant, Sala.
Paris Baguette was founded in South Korea in 1988. It has over 3,400 stores at more than 440 locations across the US, China, France, Vietnam, Indonesia, Cambodia, and Singapore. Lee stated that 20% of Paris Baguette Malaysia’s menu will be localised.
