KUALA LUMPUR: Fortune 500 company Darden Restaurant Inc is looking to appoint a local franchisee to expand its restaurant chain business in the Asia-Pacific region and make Malaysia its regional hub.

Chief financial officer Bradford Richmond said the group has identified a few potential local partners with a strong footprint in some Asia-Pacific markets. “We have identified a few potential partners that could operate a few of our brands in the region. We want a strong partner so we could leverage on its experience,” Richmond told The Edge Financial Daily in an exclusive interview recently. However, he declined to reveal their identities.

“We cannot give a deadline when we want to complete the deal as we want to ensure we get a good partner,” he said.
Richmond said the group has chosen to set up its regional hub in Malaysia due to its economic policies that support foreign investments, strategic location with good access to the region, and its strong demographics.The hub is expected to manage over 300 restaurants in Asia-Pacific and generate annual sales of over US$1 billion (RM3.05 billion).

“We want to run multiple restaurant brands. We plan to start in Malaysia before we move around the region. With a population of around 28 million in Malaysia, we believe we can open around 50 to 60 restaurants here,” he said. Today, the group is inaugurating the launch of its regional hub in Kuala Lumpur. It is signing an agreement with Ever Nexus Sustainable Seafood Sdn Bhd and Inno Fisheries Sdn Bhd to set up a 9,300ha integrated Lobster Aquaculture Park in Lobster Aquaculture Park in Semporna, Sabah.

At full capacity, the RM2 billion farm can produce 18,000 tonnes of lobster and generate US$1 billion in annual sales by 2025. It is earmarked as a possible Entry Point Project under the Economic Transformation Programme. The lobsters will be supplied to Darden’s restaurants in the future.

Richmond said the expansion in Asia is part of the group’s plan to establish a global network of restaurants. “We see great opportunities to expand the brand globally with potential US$40 million in cash flow contribution” he said.

The group recently expanded into Mexico with contracts to open 25 restaurants and 65 restaurants in the Middle East. With over 2,000 restaurants in North America, Darden is the world’s largest full-service restaurant. Some of its well-known chains include Red Lobster, Olive Garden, LongHorn Steakhouse and the Capital Grille.

For fiscal year 2012, Darden recorded a turnover of US$8 billion and it is ranked 342nd in the Fortune 500 list of the largest US companies. The group is listed on the New York Stock Exchange.

This article first appeared in The Edge Financial Daily, on Nov 5, 2012.