KUALA LUMPUR: While many large global multinational companies (MNCs) have successfully thrived in Greater Kuala Lumpur, some ventures have failed to take off here due to various business reasons.
According to investment promotion agency InvestKL, MNCs that did not proceed with their investments in Greater Kuala Lumpur from 2011 to 2018 include Iffco, Darden, Red Lobster, Rhodium, KBR, Anheuser-Busch InBev (AB InBev) and S&D Sucden.
These MNCs are deals that have been removed from InvestKL’s tracking as they no longer meet the requirements of quality MNC investments.
InvestKL CEO Datuk Zainal Amanshah (pix) denied that these MNCs have exited the Greater Kuala Lumpur market, but clarified that these are MNCs that have, over a period of time, expressed that their investments or joint ventures would not proceed.
“It’s not correct to say that they pulled out. They did not proceed with their investment plans,” he told SunBiz.
“Over the years, investments do not materialise because of a change in business direction. These companies have reviewed their investments and decided not to proceed because of different business plans or economic conditions, but nothing to do with Malaysia or the change in our government,” he emphasised.
An example is soft commodities trader Sucden, which was unable to source for cocoa in the Asean region and had to transfer its trading desk back to Paris.
Sucden Malaysia Ltd general manager Jasbir Singh told SunBiz that it is still operating in Malaysia but it is now a service centre keeping track of its Paris office’s logistics.
”Our role has changed because of the nature of the business and no other reasons. We are cocoa dealers and our supply chain was Indonesia but production in Indonesia is falling rapidly so our clients are now targeting African bean sourcing. This sourcing of Africa beans comes under our Paris office,” he explained.
Zainal said some MNCs were granted incentives but subsequent follow-ups revealed that there was a change in their business direction, or they have decided not to proceed with the venture.
“There is no loss in terms of revenue or tax income. It’s not like we gave them tax incentive, they took it and ran away… that’s not the case at all. These companies did not really start their operations. There is no loss per se.”
American restaurant operator Darden Restaurants Inc first signed a partnership agreement with Secret Recipe Cakes & Café Sdn Bhd in 2013 to develop and operate Darden restaurant brands of Red Lobster, Olive Garden and LongHorn Steakhouse in Malaysia. In 2014, Darden sold Red Lobster to a private equity firm and subsequently went through an entire change in its board of directors in the US.
Olive Garden Malaysia and LongHorn Steakhouse Malaysia have since ceased operations in 2018, while Red Lobster Malaysia currently has three outlets in the Klang Valley, following the closure of Red Lobster outlets in The Intermark, Mid Valley Megamall, Sunway Putra Mall and Gamuda Walk (Kota Kemuning).
AB InBev, the world’s largest brewer, is going through a shake-up in its board now following a period of steep share price declines. It was also reported to be considering an initial public offering of its Asian operations after a string of acquisitions left it with a heavy debt load.