Expansion plans a-brewing at Ya Kun

The labour crunch and shaky economy have not stopped home- grown coffee and kaya toast chain Ya Kun from expanding.

It plans to increase its 44 outlets here to 100 by 2015, including opening its first Ya Kun Family Cafe in Singapore next month.

The firm opens its first outlet in China next month, and by 2015 it will have added 70 franchise cafes to its current 37 overseas, said chief executive Marc Leoi in an exclusive interview with The Straits Times.

These outlets will be in new markets such as Myanmar, India, China, United Arab Emirates and Maldives, as well as in the existing territories of Indonesia, the Philippines, South Korea, Taiwan and Japan.

By the end of the three-year expansion phase, Mr Leoi said overseas outlets are expected to account for one-third of the firm's revenue, up from 5 per cent to 6 per cent today.

He declined to disclose Ya Kun's turnover. But when asked whether Ya Kun would still remain a small and medium enterprise (SME) after the expansion, Mr Leoi replied without missing a beat: "Yes."

Spring Singapore defines SMEs as firms with annual turnover of less than $100 million, or those with fewer than 200 workers. Ya Kun has a 300-strong workforce.

Executive chairman Adrin Loi said that the Parkway Parade outlet that opens next month marks a "new phase of local growth" for the chain.

The 1,300 sq ft, 70-seat cafe will be Ya Kun's biggest here.

Mr Loi said that there will be new food items such as kaya- filled toasted bread balls, toast bread topped with ice cream for children and toast fries, which are eaten like french fries.

He added that even as Ya Kun expands here and overseas, the core products - kaya and coffee - will continue to be supplied from its central kitchen at Admiralty Street.

"This will ensure that we maintain the quality of our key products," said Mr Loi.

The kitchen is running at about one-third of capacity so it can be ramped up to support the expansion.

Mr Loi - the son of Loi Ah Koon, who started the firm as the humble Ah Koon coffee stall in Telok Ayer Basin in 1944 - is confident that kaya and toasted bread will be popular in the new overseas markets it is entering.

"For example, in the Middle East, the people like sweet things and bread," he said.

He also expects the kaya and toasted bread to be adapted to local tastes, citing the example of an outlet in Japan which sells kaya with soft bread.

Mr Loi was coy about a possible share market listing, saying only that it is not on the cards now: "When it happens, it happens."

CEO Mr Leoi added that local workers will continue to form the bulk of its staff.

It plans to hire more retirees and housewives as its workforce swells to 600 on the back of the expansion.

Mr Chan Chong Beng, president of the Association of Small and Medium Enterprises, told The Straits Times: "It is encouraging to hear a growth story of our own local brand, especially when there are others who are squeezed by rising costs and labour crunch."

tohyc@sph.com.sg