Tuesday March 5, 2013

The smell of modernity in Bau

Ceritalah by KARIM RASLAN

THERE’S one face – bearded, white-haired and forever cheery that has been my constant companion as I’ve travelled across the country for Ceritalah Malaysia.

Red and white and formerly “finger-lickin’ good,” Colonel Sanders’ restaurants also have some of the cleanest toilets outside the big cities: an important consideration given the parlous state of my internal plumbing after an errant dish of mi goreng in Keningau.

Still, over the past decade, Kentucky Fried Chicken (or KFC) has expanded at a veritable clip, so much so that it now has around 40 restaurants in Sarawak and 50 in Sabah respectively – testament to the burgeoning demand in what were once considered moribund small-town and isolated communities.

KFC is not alone. Many brands – The Store, Mydin, Ngiu Kee (a key east Malaysian retail player), Gulatti’s and Guardian Pharmacy – have also spread across the country as rural incomes have expanded.

Indeed, when I heard from my researchers that KFC had recently opened in the small Sarawakian town of Bau, I was sufficiently intrigued to schedule a Ceritalah Malaysia episode around two of its new hires.

Located some 29km from Kuching, Bau is in the heart of Bidayuh country, a formerly rich gold-mining land that first attracted the Brooke family to Borneo.

During the shooting, I spent time with two young Bidayuh women, Mo Lin and Abby. I wanted to understand how, if at all, their lives had changed with the advent of relatively well-paid service jobs. For starters, I understood that there was no need for them to move to Kuching in search of work.

At the same time, I was interested to see how this wave of economic growth in the provinces – well beyond my Bangsar “comfort zone” – was being harnessed by our corporates.

Datuk Ahmad Zaki Zahid, an old friend and KFC’s head honcho explained: “The increase in incomes outside the Klang Valley has provided enormous opportunities for companies such as KFC. Whilst keeping our prices at a reasonable level, we’ve been able to service larger and larger numbers of consumers.”

The KFC branch in Bau is strategically located in two-storey, corner-lot right next door to a BSN Bank branch and a stone’s throw from the local bus station which itself is across a large carpark.

We were filming at end of the month, a peak period according to Zaki. Certainly the long queues of workers cashing their pay cheques in BSN soon spilt over into the KFC.

Bau’s inhabitants – as with many other rural sector Malaysians – are benefiting from two underlying factors: the recent commodity-driven price spike as well as an increase in civil servants income – through bonus hand-outs and favourable benefits like low housing loan interest.

Of course, this year’s dip in palm oil prices has had an impact – with prices dropping to around RM2,500 per tonne of CPO compared to RM3,300 a year ago.

However, given the relatively low cost structure most smallholders are operating under, there’s still a comfortable profit margin.

As Isaac Lee, a young planter from Kluang (the location for a later episode) explains: “Most smallholders have fixed costs of around RM300 per metric tonne (the average yield per month from one acre). Nonetheless, they’ll still take home a clean profit of around RM180 per acre in current market conditions.”

Needless to say, retailers have been quick to respond to the changing patterns of national consumer spending. Whereas in the past the “game” was almost exclusively focused on the Klang Valley and George Town, the present feel-good factor has extended way into “small-town Malaysia” – embracing communities such as Port Dickson, Temerloh and Kuala Kangsar.

Indeed, it’s arguable that Klang Valley inhabitants have been squeezed as the rural sector has benefited. Rising costs, especially housing, food and transportation, have eaten into those living on fixed incomes.

Nonetheless, on-going investments in infrastructure (highways and ports) have improved logistics and supply-chain issues outside the big cities which in turn have enhanced the business prospects of players such Mydin Stores and KFC, by lowering their costs.

Datuk Ameer Mydin is straight-forward: “Infrastructural improvements mean I can deliver products much more quickly, easing my supply-chain challenges. Moreover, consumers outside the Klang Valley are more loyal and reliable.”

Ameer’s expansion plans underline the attractiveness of doing business beyond the Klang Valley. For example, in Gong Badak, Kuala Terengganu, he’s planning a new 250,000 sq ft facility – on top of an existing 150,000 sq ft store. Similarly in Kota Baru, the company’s original base since 1957, they’ve just acquired 18 acres in Tunjang to build a 650,000 sq ft store.

All this goes to show that what’s good for Mo Lin and Abby in far-away Bau is also good for many other young people outside the Klang Valley, who are now able to enjoy the kind of consumer choice that only KL-ites could once enjoy.

One last point that I should make is that in Bau, with its population of 30,000, the local Ngiu Kee store was a little sad and forlorn, whereas the town’s local player Ming Ming supermarket was a bustling hive of activity – proof that not all local players will be killed off by the increased competition.

Perhaps in 10 years’ time, I’ll be writing about Ming Ming’s rapid expansion across the rest of Malaysia?

News

Tuesday March 5, 2013

The smell of modernity in Bau

Ceritalah by KARIM RASLAN