Fast-food operator has three outlets now in the subcontinent

MUMBAI: KFC Holdings (M) Bhd, which is fast expanding its operations in India, expects to have 17 outlets in the subcontinent by the end of next year.

The fast-food outlet operator now has three outlets in India - one in Pune and two in Mumbai. It opened its first in India in the city of Pune in April this year.

Chairman Tan Sri Muhammad Ali Hashim said the 17 outlets would include five in Mumbai that KFC Holdings would acquire from master franchise holder Yum! Brands Inc. They would also include two outlets in Pune that would be acquired from another Indian franchise holder, Kernel Food Pte Ltd.

Ali said KFC Holdings would open four more outlets of its own by year-end. Of the four, two would be in Mumbai, one in Pune and one in Aurangabad - all these cities are located in the state of Maharashtra, which is on the western part of India.

"We want to build a critical mass as soon as possible. By the end of this year, we will have a total of nine outlets which will involve an investment of about US$9mil," he said after launching KFC Holdings' third outlet in India here yesterday. The event was also attended by Yum! chairman David C. Novak.

He added that KFC Holdings would open eight outlets next year costing a total of US$10mil.

Ali said contribution from the Indian operations to KFC Holdings' group profit would be small initially but he was confident about the venture in the long run.

This is given that Maharashtra has a population of about 100 million, of which 21 million lives in its industrial and financial hub Mumbai and 5.7 million in its education-cum cultural centre Pune.

The Indian consumer market is also considered to be under-developed, having an estimated 1,200 brand restaurants in a country with over 1.13 billion, of which 50% is under 25 years old.

Ali said KFC Holdings expected a return on investment of at least 15% a year from its Indian operations.

"We are impressed with the sales recorded so far. Our expansion in India should be faster than in Cambodia," he added.

On whether the company would venture into poultry and chicken-breeding business to support its operations in India, Ali said: "We'll do things one step at a time. Maybe we'll do it in the long run."

The company now sourced its halal chicken from Venky's India Ltd.

He said KFC Holdings would focus on Maharashtra before looking at other states in India. At the moment, the company is only allowed by YUM! to operate in Maharashtra.

KFC Holdings deputy chairman Ahamad Mohamad said the company would open six outlets in Cambodia next year, with each outlet expected to cost RM1mil. It now has seven in that country.

He also said the company would open a Pizza Hut outlet in Phnom Penh soon.

- The Star Online