Koufu Creates Feast of Culinary Flavours

Date: March 11, 2020

Koufu CEO

From school dropout to street hawker, coffee shop owner and finally, founder of a local food-and-beverage empire, entrepreneur Pang Lim’s journey – spanning five decades – was one marked by sheer grit.

“If you have goals and dreams, you can achieve them if only you set your mind to it,” the Chief Executive Officer of SGX-listed food and beverage operator Koufu Group Ltd said with a smile.

Pang dropped out of school at the age of 13 to assist his uncle, a hawker. He spent his teenage years washing dishes, selling wanton noodles, and peddling wares, ranging from fruits and watches to toys and chicken rice, in Singapore’s notorious Sungei Road Thieves Market.

“No matter what your beginnings were, make it a point to evolve continuously,” he noted.

“Take Sungei Road market as an example – many large and famous business enterprises started off as stalls there in the 50s and 60s. Today, they have become Singapore’s success stories.”

From the city-state’s oldest flea market, Pang, together with his girlfriend who later became his wife, progressively moved into operating and managing coffee shops and food courts.

“I always believe in the principle that if you work hard to overcome your challenges, and hold fast to the mindset of wanting to improve yourself, you can succeed,” he said.

“I was not academically inclined, but I was still able to forge my own path, because I was willing to work much harder, and for longer hours, to accumulate the relevant experience. Yes, I might take longer than the other person to reach my goals, but I will get there – eventually.”

In the late 80s and 90s, Singapore’s food and beverage industry underwent a transformation. Air-conditioned food courts offering street hawker fare began to emerge within large shopping malls.

Pang was quick to capitalise on this trend. “Business in air-conditioned food courts was much better than your typical coffee shop because customers could escape the hot, humid weather and dine in comfort,” he said.

“It was a big deal then because Singapore at that time had very few large malls and air-conditioned eating places.”

Coffee-Shop Spirit

In 2002, Pang and his wife bought over three food courts in the heartlands – Toa Payoh, Yishun and Woodlands – from rival operator Kopitiam. This marked the birth of the Koufu brand, which promises “Better Food, Better People, Better Life”.

Koufu (口福), which means culinary treat in Mandarin, is based on the Chinese belief that it’s one’s good fortune to feast on sumptuous food. The Group aims to share the spirit of the Singapore coffee shop heritage by providing traditional, local fare in a cosy ambience where friends and family can congregate.

Today, Koufu Group is one of the city-state’s most established and largest operators/managers of food courts and coffee shops, with a presence in Macau, Malaysia, and soon Indonesia. It has two business segments – Outlet & Mall Management and F&B Retail.

The Outlet & Mall Management division comprises 50 food courts (with two located in Macau) under brands Koufu, Cookhouse and Rasapura Masters, 16 coffee shops, one hawker centre as well as one commercial mall. The F&B Retail arm includes 76 F&B stalls (four in Macau), 29 F&B kiosks (one in Macau and one in Malaysia), seven quick-service restaurants, as well as four full-service restaurants.

Listed on SGX Mainboard since July 2018, the Group has a current market capitalisation of more than S$400 million. One of the founding shareholders of Koufu, Pang was appointed Executive Chairman and Chief Executive Officer of the Group in 1996. Ng Hoon Tien – his wife and also founding shareholder – was named Executive Director in 2002.

Over the 2019 calendar year, Koufu shares have generated a total return of 28.9%, outperforming total returns of 9.4% and 11.3% for the benchmark Straits Times Index and broader FTSE ST All-Share Index respectively.

Looking ahead, the Group plans to expand its domestic footprint with a focus on hospitals, commercial malls, tertiary institutions and new housing estates. In choosing the location of its outlets, Koufu takes into consideration key factors such as demographics, catchment population and lease terms, with the aim of maximising revenues, Pang said.

“We intend to collaborate with potential and joint-venture partners to leverage on their expertise and expand our range of food products to third parties, retail outlets and delivery services,” he added.

The proposed seven-storey integrated facility in Woodlands Avenue 12 – which has an estimated gross floor area of 20,000 square metres and is scheduled for completion in the first half of this year – will underpin the Group’s expansion plans.

The larger central kitchen will boost economies of scale, improve production techniques and ensure better consistency, while its research and development centre will develop new recipes and analyse market trends. Smaller central kitchen units within the facility will be rented out to chain stall operators to support their growth – a move that will also generate recurring rental income for the Group.

Redefining Taste Sensations

For overseas markets, its initial focus will remain on Macau – the Group opened its second food court in 2019, and targets to start operations for a third later this year.

Having already brought its R&B Tea brand to Macau and Malaysia, Koufu is in the midst of active negotiations with partners to bring its redefined tea experience to Indonesia and the Philippines, as well as its meatless Elemen dining concept to China, Australia, Malaysia and Indonesia.

“Our competitive strengths include our end-to-end business model, which gives us greater operational and cost control, as well as our emphasis on using technology as a key enabler to boost productivity,” Pang noted.

The Group was the first food court manager to introduce NETS unified payment terminals and smart tray return robots at its food courts. In 2018, it launched a Koufu Eat mobile ordering application. It has also piloted self-order and payment kiosks, a RFID tray return system, and a traditional coffee-making machine in its outlets.

While the Group remains focused and resilient amidst industry challenges, Pang still frets over cost pressures, and how to groom talent for succession planning.

“As rentals and labour are always increasing, we need to constantly review our operational processes and improve efficiency, so as to manage these cost factors,” he noted.

Creating new food and beverage concepts to maintain relevance and a competitive edge is also a priority. “At Koufu, we pride ourselves on being a learning organisation that continually transforms to stay ahead.”

And as the business expands, it is critical to nurture and retain talent. “Developing a deep management bench will help us overcome the obstacles ahead and bring Koufu to the next stage of growth,” Pang added.

Outside the office, the 65-year-old reads voraciously to keep up with industry trends and management concepts. “My favourite subjects are philosophy, psychology and business,” he smiled.

The father of two sons and a daughter, aged 21 to 25, also makes it a point to have dinner with his family every night, if possible. “I enjoy eating at home – that’s our family-bonding time.”

He encourages his children to take ownership of their lives and continue developing new skills. “I always tell them that they cannot stop learning, even after they leave school,” he added.

“Do not fear that you will lack opportunities. Instead, strive to improve yourself constantly. That’s how you create your own value, and contribute to society, in this rapidly changing world.”

Koufu Group Ltd

Established in 2002, Koufu is one of the most established and largest operators and managers of food courts and coffee shops in Singapore, with a presence in Macau. Since inception, Koufu’s philosophy has been to integrate modern management discipline into its business while retaining the traditional coffee shop culture, with particular emphasis on providing patrons with value for money dining options in a comfortable environment. Koufu’s business comprises two segments – outlet & mall management and F&B retail. Under the first segment, Koufu operates and/or manages food courts, coffee shops, a hawker centre and a commercial mall. Under the second segment, it operates self-operated F&B stalls located within its food courts and coffee shops, or in third-party food courts, as well as F&B kiosks, quick-service restaurants and full-service restaurants, amongst others.

The company website is: www.koufu.com.sg.

Click here for the company’s StockFacts page.

For the three months ended 30 September 2019 financial results, click here

First published on SGX website on 7 February 2020

About kopi-C: the Company brew

Text: Jennifer LH Tan
Photo: Company file

kopi-C is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations.

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