Monday, October 18, 1999
Ahold, the food retailer, has restructured its presence in the Asian region. Ahold will focus on Thailand and Malaysia where it already holds strong positions and is set for growth in the future. The joint ventures in the two markets represent close to 80% of total Ahold sales in Asia. Ahold's stakes in loss making operations in China and Singapore have been sold respectively to its local partner in China and to Dairy Farm International.
"We have decided to stay in the region if we can generate the returns on investment that we are used to elsewhere", commented Allan Noddle, a member of the Ahold Corporate Executive Board. Our joint venture operations in Malaysia and Thailand have shown they can deliver the progress and contributions we're aiming for, even under difficult economic conditions. With operations in China and Singapore now sold, we're in a much better position to meet our targets for Asia."
Noddle said that all Ahold operations in the world have to meet clear performance targets: "Our Asian markets cannot be an exception to this. If we don't get reasonable returns over a certain period of time and the outlook stays bleak, we will not hesitate to divest from the loss making parts. For us it is a good business decision."
Noddle gave three reasons for the divestments: "The small size of the Ahold joint venture operations in China (sales of USD 48 million) and Singapore (sales of USD 80 million), insufficient economies of scale and the need for considerable new investments over a longer period of time. We decided against such investments as we see better returns from growing our businesses in Thailand (sales of over USD 300 million) and Malaysia (sales USD 40 million), which together already represent close to 80% of our sales in Asia. We can now focus exclusively on the two best positioned TOPS supermarket chains in the region."
Ahold has scaled down its regional office in Singapore. The company operates 40 TOPS supermarkets in Bangkok,Thailand, with sales of over USD 300 million and 45 TOPS supermarkets in Malaysia with approximately USD 40 million in sales.
Background Royal Ahold
Ahold is a rapidly growing international food retailer with leading supermarket operations in the United States, Europe, Latin America and Asia. Annualized sales worldwide amount to approximately USD 35 billion. The company operates 4000 supermarkets, hypermarkets and specialty stores, with 300,000 associates serving over 25 million customers each week.