Wednesday, 21 June 2017

(NST) Jakel upbeat on cementing market leadership

JAKEL Group is bullish on cementing its dominance in the local textile industry, spurred by the its Jakel Mall outlets here and in Shah Alam, as well as its online business.

Group managing director and chief executive officer Datuk Mohamed Faroz Mohamed Jakel said the company’s compound annual growth rate revenue was growing between 25 and 30 per cent.

“Last year, we recorded substantial growth of 35 per cent to RM1.1 billion, from over RM800 million revenue in 2015,” he told NST Business, here, yesterday.

Faroz attributed the growth to Jakel’s transformation plans over the years.

This year, the company expects its revenue to increase 15 per cent, with the bulk coming from Jakel Mall.

Jakel has rapidly grown since it started operating as a textile shop in 1985.

“We have grown by leaps and bounds. Now Jakel Mall KL is the biggest revenue contributor of our textile division,” he said, adding that the mall contributed RM400 million in revenue last year.

He expected the contribution from Jakel Mall KL to grow between 15 and 17 per cent this year.

Faroz said Jakel had been insulated from currency volatility thanks to its hedging plans.

He said when the ringgit was severely hit in 2015, Jakel made deals with its suppliers.

As Jakel imports directly from manufacturers, it could negotiate with suppliers on reducing their prices, allowing the company to save between 20 and 30 per cent of the cost.

“We hedged our foreign exchange requirement in 2015 and last year during the ringgit volatility against the US dollar.”

Faroz said Jakel would not expand into the international market as it believed the online business could provide sufficient stream of revenue.

“We want to expand our online business. We do not need to open new branches overseas as this will incur additional operational and capital costs.

“Online business contributed RM70 million revenue last year, with good demand for our Jakel brand in the textile and apparel divisions, including the Ariani brand. This year, we are targeting our online business to hit RM100 million,” he said.

Faroz said the Ariani brand had recorded healthy revenue of RM98.3 million last year.

Fifty per cent of Jakel’s annual revenue contribution comes from new products, namely printed fabric for baju kurung and baju Melayu.

The rest comes from bridal collection (20 per cent), ready-made apparel (20 per cent) and home furnishing and carpet (10 per cent).