April 11 2002
Tesco to press on in Malaysia
By David Blackwell in London
Tesco, the UK's largest supermarket operator, said that a decision by the Malaysian government to freeze applications to open hypermarkets would not affect the company's plans to open its first store in the country next month.
Malaysia announced a temporary freeze, effective immediately, in order to protect smaller retailers. The news came after Tesco announced on Wednesday plans to tackle the Chinese and Japanese markets alongside profits up 14 per cent last year to £1.2bn ($1.7bn).
The supermarket group has already announced plans to spend M$1.2bn ($316m) developing 15 stores in Malaysia over the next five years. On Thursday it said that permission had been granted for four to be completed this year, including the Puchong store that opens next month. The company also had permission for another two next year.
Analysts suggested that it was impossible to predict if the freeze would become permanent.
In the event of a ban on new stores, Tesco would be left with six - the same number Carrefour of France already operates. A total of only six might be an uneconomic proposition for Tesco.
Tesco, however, said it was in continuing talks with the Malaysian authorities.
It also revealed that profits on its international operations, excluding Ireland, rose from £9m to £54m in the 12 months to February 23. Merrill Lynch, the group's broker, is forecasting international profits of £145m this year
Thursday, 11 April, 2002
Malaysia bans new hypermarkets
Malaysia has decided to temporarily freeze all applications to open new giant supermarkets in a bid to protect local retailers.
The Domestic Trade and Consumer Affairs minister Muhyiddin Yassin announced the decision, saying it would be effective immediately.
The freeze is likely to be a big blow for foreign retailers in the country, some of whom had outlined ambitious expansion plans.
The British company, Tesco, had been expected to open its first store in Malaysia next month, and had planned to invest $300m to open fifteen supermarkets over the next five years.
The French firm, Carrefour, already has six shops in the country.