Oldtown White Coffee banks on Halal status to capture larger Malay market

The "kopitiam" chain operator - which received the Halal certification from the Department of Islamic Development Malaysia (JAKIM) for most of its outlets on Monday - believed that the Halal status will help more Malay customers to its coffee chain.

"Ultimately, we want to capture the Malay market in Malaysia," said executive chairman Datuk Dr Ahmed Tasir Lope Pihie.

At present, only 20 per cent of its customers base are Muslims. Should Oldtown is able to expand its Muslim customer base, it will certainly be a great boost to its earnings.

For the 15 months ended March 31, 2013, Oldtown posted a net profit of RM55.5 million, on the back of RM421.5 million in revenue.

Oldtown shares on Bursa Malaysia closed 5 sen lower at RM2.75 with more than 230,000 shares changed hands. So far this year, its shares have appreciated by more than 60 per cent.

The cafe chain has earned the Halal accreditation for all its 168 stores in Peninsular Malaysia and eight stores in Singapore. It also expects to obtain Halal accreditation for its 12 stores in East Malaysia soon.

Meanwhile, its chief opearating officer and executive director Clarence Leon D' Silva hopes that the accreditation could improve market perception of its products and services.

Last year, there were reports and allegations that questioned the quality of the cafe chain's food and processes. These allegations were subsequently addressed by the company.

“Yes, I think with the accreditation can regain the consumer confidence on dining on our outlet again and in Singapore, we complied with the country’s Islamic religious department procedure by performing ‘samak’ process on every our outlets,” he said.

(Samak is a Muslim ritual cleansing process in which clay soil and water is mixed and used for cleaning tainted parts or equipments to purify from known Haram elements)

The company added that the entire value chain - which includes logistic, distribution and outlet operations - complies to the Shariah Law.

“Everybody must comply with the standard operating procedure and not only that every outlets will be having two Muslim employees in every shift that we operated. The employees also have been trained about the food safety which also include the Halal matter in order they to achieve a certain level of standard,” he said.

The company presently has 224 outlets in Malaysia, Singapore, Indonesia and China.