KHT's Investment Memorandum for Sudan Cattle Industries

SUDAN CATTLE INDUSTRIES SDN BHD
(784110-U)
INVESTMENT MEMORANDUM
February 8, 2015
Investment Memorandum of
Konsortium H & T Sdn Bhd
TABLE OF CONTENTS
1.0
CORPORATE INFORMATION ............................................................................................... 1

1.1
Konsortium H&T Sdn
Bhd .............................................................................................. 1 1.2
Authorised, Issued
and Paid-Up Capital .......................................................................... 1
1.3 Shareholders ..................................................................................................................... 1
1.4 Proposed Konsortium Equity/Participatory Partners ....................................................... 1
1.5 Shareholding Before and After Conversion of Redeemable Convertible Preference
Shares ("RCPS") .............................................................................................................. 2
2.0
KHT FINANCIAL INFORMATION ........................................................................................ 2

2.1 Profit and Loss Projections .............................................................................................. 2
2.2 Cashflow Projections ....................................................................................................... 3
2.3 Assumption for Revenue for Frozen Block Sudan Beef (FBBeef) - ("Daging Lembu
Pejal") ............................................................................................................................... 3
2.4 Net Tangible Assets ......................................................................................................... 4
3.0
RETURN ON INVESTMENT .................................................................................................. 5
4.0
INVITATION TO INVESTOR ................................................................................................. 5
5.0
THE MARKET PLACE ............................................................................................................ 6

5.1 Overview .......................................................................................................................... 6
6.0
KHT BUSINESS PLAN ............................................................................................................ 7

6.1 KHT Playing Field ........................................................................................................... 7
6.2 KHT Vision ...................................................................................................................... 7
6.3 KHT Mission .................................................................................................................... 7
6.4 KHT Key Objectives and KPIs ........................................................................................ 8
7.0
KHT BUSINESS IMPLEMENTATION PROGRAM .............................................................. 9

7.1 KHT Business Model ....................................................................................................... 9
7.2 KHT Market Place ......................................................................................................... 10
7.3 KHTs Market Approach ............................................................................................... 10
8.0
KHT VENDOR DEVELOPMENT ......................................................................................... 13
9.0
KHT PRODUCTS ................................................................................................................... 14

9.1
KHT Products: Phase 1 Beef Block ............................................................................
15 9.2 KHT Products: Phase 1-4; Other Products .....................................................................
17
9.3 KHT Product Development ............................................................................................ 18
9.4 Product Quality Assurance and Control ......................................................................... 18
10.0
KHT PRICING STRATEGY .................................................................................................. 19
11.0
KHT SALES STRATEGIES ................................................................................................... 19
12.0
KHT MARKETING STRATEGIES ....................................................................................... 20

12.1 Marketing: Advertising .................................................................................................. 20
12.2 Marketing: Branding ...................................................................................................... 20
12.3 Marketing: Message ....................................................................................................... 21
12.4 Marketing: Advertising Medium .................................................................................... 21
12.5 Marketing: Promotion .................................................................................................... 21
30
13.0
LOGISTICS ............................................................................................................................. 22
13.1 Importation and Supply to KHT .................................................................................... 22
13.2 Freight & Forwarding and Haulage ............................................................................... 22
13.3 Warehouse ...................................................................................................................... 22
13.4 Transport ........................................................................................................................ 22
14.0
PROCESSES & SOP ............................................................................................................... 23
15.0
KHT'S MANAGEMENT AND ORGANIZATION STRUCTURE ....................................... 23

15.1 Finance & Administration .............................................................................................. 23
15.2 Corporate Affairs ........................................................................................................... 23
15.3 Corporate Affairs & Legal ............................................................................................. 24
15.4 Quality Control And Quality Assurance ........................................................................ 24
15.5 Organization Structure ................................................................................................... 25
16.0
FACILITIES AND LOCATION ............................................................................................. 26
17.0
KHT READINESS .................................................................................................................. 27
18.0
SETTING-UP COST ............................................................................................................... 27
30
1.0
CORPORATE INFORMATION
1.1
Konsortium H&T Sdn Bhd

KHT was incorporated in Malaysia under the Companies Act, 1965 on 9 th
August 2007 to implement and manage Government Projects under the
National Food Security Policy 2008 in line with the HTAP Program and the
10th Malaysia Plan.
1.2
Authorised, Issued and Paid-Up Capital

The current authorized, issued and fully paid up share capital of KHT is as
follows:Item Description
1
2
Authorised Capital
Issued and Fully Paid @ RM1.00 Each
4
No of
shares
5,000,000
400,000
RM
5,000,000
400,000
1.3
Shareholders
The current shareholders of KHT are holding the shares in trust and shall
relinquish their holding upon subscription/acquisition by investors. Their
current shareholdings are as follows:No of
shares
350,000
50,000
Item Shareholders
1
2
1.4
Ismail Bin Mohd Aji

Jamalullail Bin Lot
RM
350,000
50,000
Proposed Konsortium Equity/Participatory Partners

The Management of KHT proposed the following company/body to be the
participatory partners in the consortium to execute the SBSS Program:-
Gedung Makanan Negara Bhd (subsidiary of Felda);

My Angkasa Holding Sdn Bhd (subsidiary of Angkasa Holding Bhd)
Malaysian Agrifood Corporation Bhd (subsidiary of Khazanah Nasional Bhd);
1.5
Shareholding Before and After Conversion of Redeemable Convertible
Preference Shares ("RCPS")

The new share capital of KHT will be restructured upon subscription by your
esteemed corporation and the indicative percentage of ownership is as
follows:-
Shareholders
Ismail Bin Mohd Aji
Jamalullail Bin Lot
Gedung Makanan
Negara
My Angkasa
Holding Sdn Bhd
Malaysian Agrifood
Corp Bhd
TOTAL
Ordinary
Shares
Issue of
RCPS
350,000
50,000
35%
5%
200,000
20%
1,800,000 (1,800,000)
2,000,000
31.3%
200,000
20%
1,800,000 (1,800,000)
2,000,000
31.3%
200,000
20%
1,800,000 (1,800,000)
2,000,000
31.3%
100% 5,400,000 (5,400,000)
6,400,000
100.0%
1,000,000
After
After
Redemptio Conversio
n of RCPS n of RCPS
350,000
50,000
5.5%
0.8%
2.0
KHT FINANCIAL INFORMATION
2.1
Profit and Loss Projections

Summarized below are the Performa Profit and Loss Accounts under Option
1 for the financial year 1 to year 5:-
RM'000
Year 1
Volume (FCL)
480
Year 3
1200
Year 4
1,320
Year 5
1,440
1,680
Volume (MT)
11,040
27,600
30,360
33,120
38,640
Total Revenue
Less: Variable
Operating Cost
Contribution
Margin
%
163,392
289,800
455,400
683,100
931,500
152,741
267,697
420,678
631,018
860,514
10,651
22,103
34,722
52,082
70,986
6.5%
Less: Fixed
Operating Costs
Operating Margin
%
7.6%
7,806
2,845
8,810
3.0%
7.6%
20,601
14,120
3.1%
7.6%
31,104
20,979
3.1%
43,572
27,414
2.9%
1,624
3,294
5,075
7,542
10,212
1,238
5,532
9,062
13,437
17,202
0.8%
EBITDA (BT)
7.6%
13,293
1.7%
Less: Fixed
Overhead Cost
NPBT
2.2
Year 2
1.9%
2,033
2.0%
7,366
2.0%
11,848
2.0%
17,563
22,757
Cashflow Projections
The Cashflow projections for Option 1 from year 1 to year 5 are as follows:RM'000
Year 1
Year 2
Year 3
Year 4
Year 5
INFLOW
Collection (LM)
163,392
289,800
455,400
683,100
931,500
Total Inflow
163,392
289,800
455,400
683,100
931,500
152,741
281,797
442,616
664,148
906,907
152,741
281,797
442,616
664,148
906,907
10,651
(2,577)
(1,016)
(1,748)
3,893
245
OUTFLOW
Variable Operating
Costs
Less: Total
Outflow
Cash Flow from
Operations
Capex/Investment
Less: Capex/
Investment
Free Cash Flow
245
10,406
(2,577)
(1,016)
(1,748)
3,893
(149,040)
(260,805)
(409,836)
(614,754)
(838,300)
114,878
204,918
329,110
493,666
679,955
973
1,739
2,691
4,036
5,464
(38,910)
(54,148)
(78,034)
(117,052)
(152,881)
34,332
51,571
77,018
115,303
156,774
40,272
91,843
168,861
284,164
39,731
91,843
168,861
284,164
440,938
Financing
Investors OS
Subscription
Investors RCPS
Subscription
RCPS Dividend
(5%)
LC Facility
(600)
(5,400)
270
LC Repayment @
3 Months
LC Interest
Cash Flow From
Financing
Net Surplus/
Deficit
Opening Balance
Ending Balance
2.3
Assumption for Revenue for Frozen Block Sudan Beef (FBBeef) ("Daging Lembu Pejal")
Revenue
Invoice price
Volume/40 FCL
Operating Cost
Produce Cost
Warehouse
Distribution
Sales commission
Manpower
Travelling
A&P
2.4
UOM
RM/Kg
MT/FCL
Year 1
RM14.80/kg
23 MT/FCL
RM/Kg
RM/Kg
RM/Kg
%xRev
RM/Mth
%xRev
%xRev
RM13.50
RM0.20/kg
RM0.20/kg
0.5%
RM80,000
1%
3%
Net Tangible Assets

The net tangible assets of KHT after incorporating the estimated and
projected profits for the financial years 1 to 3 are shown as below:Before conversion of RCPS
After incorporating projected profit for the financial
year
Year 1
Year 2
Year 3
RM
RM
RM
Share capital
Retained earnings
Profit/(Loss) for the year
Shareholders fund
1,000,000
2,033,110
3,033,110
1,000,000
2,033,110
7,365,801
10,398,911
1,000,000
9,398,911
11,848,307
22,247,218
3.03
10.40
22.25
Net Tangible Assets/share (RM)
After conversion of RCPS

After incorporating projected profit for the financial
year
Share capital
Retained earnings
Profit/(Loss) for the year
Shareholders fund
Net Tangible Assets/share (RM)
Year 1
Year 2
Year 3
RM
RM
RM
6,400,000
2,033,110
8,433,110
6,400,000
2,033,110
7,365,801
15,798,911
6,400,000
9,398,911
11,848,307
27,647,218
1.32
2.47
4.32
The Net Tangible Assets per share (NTA per share) of KHT after full
conversion of RCPS, incorporating the forecast profit and projected profit for
the financial years Year 1 to Year 3, the NTA per share increases from
RM1.32 to RM4.32. This gives an average NTA per share of 2.70 for the first
three years.
3.0
RETURN ON INVESTMENT
Tabulated below is the expected return based on projected profit before tax for the
first three years.
Before
conversion of RCPS
RM
No of shares
Profit for Year 1

Profit for Year 2
Profit for Year 3
2,033,110
7,365,801
11,848,307
1,000,000
1,000,000
1,000,000
Return
(times)
2.03
7.37
11.85
Within one year to recover the amount invested in the share capital.
After c onversion of RCPS
RM
No of shares
Profit for Year 1
Profit for Year 2
Profit for Year 3
2,033,110
7,365,801
11,848,307
6,400,000
6,400,000
6,400,000
Return (times)
0.32
1.15
1.85
Within 1.5 years to recover the cost of invest after the conversion of RCPS.
4.0
INVITATION TO INVESTOR
KHT is desirous of inviting prospective investor to participate in a fund raising
exercise. The fund raising exercise involves a new subscription of 200,000 Ordinary
Shares and 2,000,000 Redeemable and Convertible Preference Shares (RCPS) with a
tender value of RM1.00 per unit. The following table shows the equity of KHT
before and after conversion of the RCPS.
BEFORE CONVERSION OF
RCPS
RM
Existing
AFTER CONVERSION OF
RCPS
RM
400,000
40%
400,000
6.3%
GMN FELDA
200,000
20%
2,000,000
31.3%
ANGKASA
200,000
20%
2,000,000
31.3%
MAFC
200,000
20%
2,000,000
31.3%
1,000,000
100%
6,400,000
100%
Subscription
Total
5.0
THE MARKET PLACE

5.1
Overview
The Malaysian meat market has matured over the last few decades as a result
of overall improved per capita income of Malaysians and consumption has
grown to almost 170,000 MTons per year by 2010 with retail value of
approximately RM3 Billion per year.
However, local beef supply local has not grown in tandem with the surge in
demand and prompted the importation of beef from Australia, NZ and USA
which are perceived to be more premium and 20-30% more expensive
(RM2830/Kg) than locally produced beef (RM24-25/Kg).
The prices disparity prompted alternative imported buffalo meat from India
which is cheaper by 40-50% (RM12-15/Kg) compared to local beef (RM2425/KG).
By 2010/11, local beef could only supply 19% (31,000 MTons) compared to
65% (110,000 MTons) of imported Indian frozen buffalo meat yearly with
16% fulfilment by Aus/NZ premium beef.
Malaysian Meat Market 2010/11
MARKET
SOURCE
Total Consumption *
%
100%
MT/YR
RRP
RM/KG
169,648
RM/YEAR
2,965,554,000
Local Beef **
Local
19%
31,948
RM25/Kg
734,804,000
Imp Beef **
Aus/Nz
16%
27,540
RM30/Kg
798,660,000
Imp Buffalo Meat **
India
65%
110,160
RM15/Kg
1,432,080,000
* Total Meat Market: Combination of Cattle Beef & Buffalo Meat

* Source: DOA, DVS, FAMA, Custom & Excise
CHANNELS
TOTAL MARKET
DESCRIPTION
TOTAL RETAIL
Modern Retail
Traditional Retail
International Chain
Local Chain
Pasar Pagi, Tani,
Malam
GOVERNMENT
Central Procurement
Local Orders
FOODSERVICE
INDUSTRIAL
Hotel, Restaurant,
Mamak,Stalls
Food Manufacturers,
Caterers
%
100%
MT/YEAR
169,648
RM/YEAR
2,965,554,000
60%
101,789
1,779,332,400
11%
13%
18,729
21,986
326,210,940
385,522,020
36%
61,072
622,766,340
15%
25,447
444,833,100
9%
6%
15,268
10,179
266,899,860
177,933,240
10%
16,965
296,555,400
15%
25,447
444,833,100
By Market Segment, throughput of meat/beef at Retail Sector commands

60% of the total national consumption while Foodservice, Industrial and
Institutional consume between 10 -15%.
At retail sector, consumers are more concern about quality & safety and
throughput of meat/beef at hyper & supermarkets have increased to 24%
compared to about 10% a decade ago. Traditional trade like the Pasar Pagi
and Pasar Tani still command a big 36% (61,000Mtons).
6.0
KHT BUSINESS PLAN

6.1
KHT Playing Field

Understanding the matured market, fresh, chilled and frozen food products
market players have been in the industry for many decades. Trading from
10
traditional market (pasar) has developed into the ultra-modern retailer

offering wholesale prices through hyper and supermarkets.
Consumers has also matured from the conventional buy whats on the shelf
to the more discerning quality, hygiene and halal conscious of what they
are being offered at retail point-of-purchase, be it at traditional or modern
trade.
Demand of Halal and Toyyiba (Hygienic & Safe) essential food products
such as meat, chicken, seafood, horticulture and many other produce have
exceeded demand. Well informed and discerning consumers now demand that
they get their moneys worth in terms of quality, safety, quantity and
assurance.
Demand exceed Supply impose a strain in the pricing structure and
vulnerable to traders who exploit the situation to hike-up prices along the
supply chain. Consumers either pay higher Retail Consumer Price (RCP) or
opt for cheaper produce that compromise Quality, Safety and Toyyiba.
At the modern hyper/supermarket retailers front, RCP became cheapest
when loss leaders appear during starts price war to protect their market
share at the expense of quality, Toyyiba and even the produce Halal integrity.
KHT Business Plan and Implementation Program shall address the above
industry scenario and market playing field where industry players like the
buffalo meat importers are already entrenched and holding a significant
market share while the local beef traders are hard-pressed for capacity to
meet demand.
Knowingly and/or by market forces, the local beef players now command a
stronghold on pricing structure such as the high Block Beef RM25/Kg when
their production cost ex-farm may be as low as RM15/Kg.
6.2
KHT Vision
To be known and trusted as the best provider of HTAP Products, Supply
Chain Services and Solutions.
6.3
KHT Mission
To transform the HTAP Products supply chain pipeline in line with the
National Food Security Policy and Global Standards of Quality, Safety,
Traceability, Availability, Accessibility, Affordability and Sustainability.
11
6.4
KHT Key Objectives and KPIs

KHT uphold the KPIs of the National Food Security Policy, Strategic Buffer
Stock System and Halalan and Toyyiban Assured Pipeline, adopting most of
the KPIs to drive business operations.
KHT adopt and adapt these KPIs and compliment them with specific business
related objectives:
(i) To Implement Effectively the National SBSS Program for HTAP
Sudan Beef and other HTAP Products under the National Food
Security Policy;
(ii) To Manage the SBSS Projects efficiently and effectively to meet the
NFS Policy KPI of Halal, Safe, Available, Accessible, Affordable,
Nutritional, Quality, Traceable and Sustainable HTAP Products;
(iii)To Anchor and Initiate the Business & Market Development for
Sudan Beef and Other HTAP Products at Midstream & Downstream
in
Domestic and International market;
(iv)To Facilitate Capacity Building of Sudan Beef and Other HTAP
Products at Upstream by Producers Locally and Abroad;
(v) To Manage the Counter Trade of HTAP Products with Market Players
in HTAP Products Country of Origin.
(vi)To Invite major related Market Players & Services Providers to
participate in Konsortium H&T Sdn Bhd to efficiently execute SBSS
Programs.
(vii)
To Enrich as many SME Entrepreneurs and Vendor in the
shortest time possible through participation in HTAP Programs, HTAP
Products Distributions, Business Matching and Vendor Development
Programs.
7.0
KHT BUSINESS IMPLEMENTATION PROGRAM

7.1
KHT Business Model

KHTs business model and operation strategies to enter a matured market
shall be govern by the traditional market entry strategies of the 4 Ps and
12
complimented by the blue ocean strategies, making it a hybrid of

conventional and new innovative approach that is design to deliver results in
the shortest time possible. Amongst other benefits, KHT business model
shall:
Ensure the most effective and efficient market entry of HTAP Products
into a matured market by applying controlled Route-to-Market to
ensure the efficient and effective, particularly when there is already a
major player controlling 65% of the market, even with an inferior
product;
Ensure Quality, Availability, Accessibility, Affordability, Sustainability,

Traceability& Quality of HTAP Products;
Mitigate issues like Loss Leader and Price Wars that may adversely affect
stakeholders performance in the supply chain pipeline.
(i) KHT Business Operation Model will be driven by:
Standard Operating Procedures (SOP) and Good Governance;
Best Products in Category and Best Services in Industry:- Quality,

Halal, Toyyiba, Assured (HTAP) and Marketing & Sales;
Customer & Consumer Centric:- Availability, Affordability

Sustainability & Traceability;
Vendor Development:- Facilitate and Support; and
Timeline of Deliverables;
Stakeholders Satisfactions.
(ii) KHT Market Entry Strategies shall be:
Creating Product Differentiation in Existing Market Place
Creating Awareness and Stay on Top-Of-Consumers-Mind
Creating New Segment and Capture New Demand
R&D Products and Innovate Value-Added Product and Marketing

Options
Target-Costing Price and Margin Management
Cost-Efficient and Lean Operation and Business Activities
Enter Uncontested Market Place and Make The Competitor

Irrelevant
13
7.2
KHT Market Place

The existing meat/beef market route-to-market consists of Suppliers >
Wholesalers > Customers > Consumers:
Suppliers at Level 0 (Upstream) are local breeders of livestock, importers

and producers of meat/beef either fresh, chilled or frozen.
Wholesalers at Level 1 (Midstream) are distributors who would normally

contract their required volume from these suppliers for reselling to
Customer at downstream.
Customers at Level 2 (Downstream) are segmented into Retailers,

Foodservice, Institutional and Industrial users who would contract their
required volume from wholesalers and expect delivery to their individual
outlets daily, twice weekly or weekly.
Retailers are segmented into Modern (Hyper, Supermarkets) &
Traditional (Pasar Pagi, Pasar Tani, Pasar Malam, Mini Markets,
Sundry Shops, Special Retail, Seasonal Stalls).
Foodservice are the Hotels, Restaurants and Catering establishment
that would outsource their requirement to Wholesalers to
consolidate all raw food materials requirement ranging from dry
sundries, groceries to fresh horticulture to chill products to frozen
produce.
Institutional are Government requirement through tenders, local
purchases and contracts.
Industrial Users are manufacturing establishment that uses
meat/beef in their processes to produce their final processed/packed
FMCG.
7.3
KHTs Market Approach

Route-to-Market for HTAP Products shall be governed by our Vision,
Mission and Objectives including To Enrich as many SME Entrepreneurs
and Vendor in the shortest time possible through participation in HTAP
Programs, HTAP Products Distributions, Business Matching and Vendor
Development Programs.
14
KHTs market approach will focus at Level 1 (Midstream) Wholesalers,

Distributors, SME Vendors who will distribute to the larger group at Level 2
(Downstream) Retailers.
(i) KHT shall focus being Importer & Trading of HTAP Products and ensure:
Quality, Availability, Sustainability, Affordability and Capacity

Build-up at source.
Efficient HTAP Logistic Services.
Sustainable Pricing and Margin Management.
Effective
A&P Campaign for Top-of-mind Awareness
(ii) KHT Route-to-Market focus shall be at Midstream Level 1

KHTs route-to-market strategies to enter the existing matured chilled
& frozen food market shall be a hybrid of:
(iii)
By Market Segment
Via Distribution Channel
Exclusive Area Demarcations
Through HTAP Certified Supply Chain
Market Segment and Distribution Channels

Existing market place are segmented by trading or distribution
channels at Level 1 where Wholesalers or Distributor act as the
middle-men to distribute local and imported products to Retailers at
Level 2 of respective channels. These channels are:
Modern Retail: International & Local Chain of Hyper &

Supermarkets.
Traditional Retail: Pasar Pagi, Pasar Malam, Mini Market,
Sundry Shop, Seasonal.
Special Retail: Pasar Tani, Cooperatives, KRIM, Felda DMart.
Foodservice: Hotels, Restaurants, Caterers.

Institutional: E-Perolehan, Tenderer, Local Orders, CSRs.
Industrial: Food Manufacturers, SMEs, MNCs.
Export: Asean, Asia-Pacific, OIC, Commonwealth
(iv)Sales Area Demarcations

KHT has identified 38 Sales Areas that is Economically Sustainable
for a Distributor Vendor to operate. These Sales Areas are demarcated
15
using population census, taking into consideration the meat eating age
of 15-64 years and Malays, being the dominant meat consumers.
Each Sales Area have a potential to generate a minimum Block Beef
sales turnover of at least RM50,000 (3.3 MTons) per week at start-up
phase and grow quickly as KHT introduces other HTAP Products and
embark on Advertising & Promotion activities to create awareness
amongst the consumers.
Distributor and Vendors were identified through research, market
place and networking. Selection is based on visits, interviews,
relativity, market involvement, wholesale and retail understanding,
commitment, ability and willingness to sustain participation from
start-up to growing the business with KHTs principles of Halalan and
Toyyiban in every aspect of its operations.
Existing Distributor Vendors infrastructure is also crucial in
determining readiness such as storage facility, transport ability,
manpower and management & business model.
While KHT is very particular on readiness, Distributor Vendors who
have the basic infrastructure shall be given a reasonable timeframe to
step-up to full readiness including adopting the Halalan and Toyyiban
Assured Pipeline Standards.
(v)
KHT Appointed Distributor Vendors @ 31st October 2013

KHT has invited and appointed mostly Bumiputera SMEs in 32 Sales
Areas in Peninsular Malaysia and shall complete all 38 Sales Area
before the 1st shipment of HTAP Beef arrives in Port Klang ETA
December 2013.
No
Distributor
Area
Territory
All Seasons Food Sdn Bhd
JH1
Johor Bharu
Bumimas Trading
JH3
Mersing, Kota Tinggi
JH5
Muar, Ledang
Bumimas Trading
JH6
Segamat
Omni Karisma
MK1
Melaka
NS1
Seremban, Port Dickson
Naungan Usaha Trading
NS2
Rembau, Tampin, Gemas
NS3
Bahau, Rompin, Batu Kikir
NS4
Kuala Pilah, Jelebu
10
Inanis Enterprise
SL1
Petaling Jaya, Kelana Jaya, Damansara
11
Inanis Enterprise
SL2
Shah Alam, K. Kemuning, Subang Jaya
12
SL3
Hulu Langat, Kajang, Cheras
16
8.0
13
Classic Agro Resources
SL4
Gombak, Selayang, Hulu Sgor, Rawang
14
Rissa Ryhinn Global
SL5
Klang, Meru, Kapar
15
Rissa Ryhinn Global
SL6
Kuala Langat, Sepang, Putrajaya
16
Bumimas Trading
PK1
Batang Padang, Perak Hilir & Tengah
17
Rahman Pandak Sdn Bhd
PK2
Ipoh, Chemor, Bt Gajah, C. Highland
18
Rahman Pandak Sdn Bhd
PK3
Lumut, Kuala Kangsar, Sg Siput
19
Bumimas Trading
PG1
Pulau Pinang
20
PG2
Butterworth, Bkt Mertajam
21
Koperasi Usahasama Jitra
KD1
Baling, Bandar Baharu, Kulim
22
KD2
Kuala Muda, Sik, Yan, Pendang
23
KD3
ASetar, Pdg Terap, KPasu, Langkawi
24
Bumimas Trading
PL1
Perlis
25
SCC Seafood Sdn Bhd
KT1
G.Musang, K.Krai, Jeli, T.Mrh, Machang
26
SCC Seafood Sdn Bhd
KT2
R.Panjang, P.Mas, P.Puteh, Tumpat, K.B.
27
SCC Marketing Sdn Bhd
TG1
Marang, Dungun, Kemaman
28
SCC Marketing Sdn Bhd
TG2
K.T'ganu, H.T'ganu, Setiu, Besut
29
SCC Seafood Sdn Bhd
PH1
CH, Lipis, Raub, Bentong
30
SCC Seafood Sdn Bhd
PH2
Jerantut, K.Krau, Temerloh, Maran
31
SCC Seafood Sdn Bhd
PH3
Kuantan, Pekan, Rompin
32
MAFC Bhd
MT1
Modern Trade
KHT VENDOR DEVELOPMENT

KHT shall support Distributor Vendors with the necessary tools-of-trade when
required such as:
Product Knowledge; Sales & Distribution techniques

Advertising & Promotions Support
Logistic Solutions and Infrastructure Know-how
Market development & New Account Soliciting
KHT shall also assist Distributor Vendors with Vendor Development Program such
as:
Regional Supermarket Chain Accounts

Central Processing Kitchen for Supply to Institutional Sectors
Original Food Manufacturing Contract (OFM)
Tender Participation & Pricing
KHT shall facilitate Distributor Vendor through Business Matching such as:
Inter-Distributor Product Exchange
17
House Brand Packing for Modern Trade

Logistic Stockist for Modern Trade and Tender Supply Business
Development Assistance via:
BANKS, PUNB, MARA, MEB, TEKUN, TUKAR, TERAJU and Other
Agencies.
KHT will continuously plan and initiate programs for business, marketing, product
and sales development for Distributor Vendor consideration and participation.
9.0
KHT PRODUCTS
KHTs Product development, sourcing and HTAP certifications was initiated by YES
(Yayasan Ekonomi Sejagat) in collaboration with partner companies in country of
origin like Sudan and few other Islamic nations and streamlined by SBSS Committee
in accordance to the National Food Security Policy KPIs and objectives.
KHTs product mix shall initially focus on frozen meat including beef, mutton and
lamb, subsequently extended to seafood, poultry and other related products in frozen,
chilled or fresh as demand and supply capacity develop.
KHT have plan the implementation and launch of these products in manageable
phases:
Phase 1 (Q1; Month 1-3)
(i) Beef (Month 1-3)
Beef Block (Daging Pejal); Beef Special Cuts, Beef Offal & Bones
Carcass: Whole, Halves and Quarters
(ii) Mutton (Month 3)
Mutton Lean Meat and Special Cut; Mutton Carcass Whole, Halves and
Quarters
(i) Lamb (Month 4-6)
Lamb Lean Meat, Special Cut; Lamb Carcass Whole, Halves and
Quarters
(ii) Value Added Meat Products; Beef, Mutton, Lamb (Month 6)
Ready-to-Cook Beef, Mutton and Lamb (Marinated & BBQ Range)
Processed Meat Products (Patties, Frankfurter, Kebabs, Nuggets)
18

(i) Seafood (Month 7)
Shrimps, Fish and Fillets
Poultry & Fowls
(ii) Horticulture Products (Month 8-9)
Premium Vegetables and Tropical Fruits
(i)
Fresh Condiments and Cooking Aids (Month 10)

Potatoes; Holland & Tropical
Onions: Holland & Tropical
Garlic, Ginger and Roots Produce
Spices
9.1
KHT Products: Phase 1 Beef Block

As mentioned earlier, consumers has also matured from the conventional
buy whats on the shelf to the more discerning quality, hygiene and halal
conscious of what they are being offered at retail point-of-purchase (POPs),
be it at traditional or modern trade.
Meat in general and Beef in particular, as a product that borders close to
commodity, is one of the price hike favourite at the traditional market place
especially during weekends and festive periods.
The same meat or beef is also a favourite loss leader at hyper/supermarket on
weekends in their effort to pull-in the consumer traffic vs. their competitors
outlet. To manage meat/beef as loss leaders, retailers resorted to cheaper
buffalo meat from India versus the Local Beef and Australian imported beef.
KHT 1st HTAP Products will be Frozen Block Beef Daging Pejal from
Sudan in 1 Kg vacuum packed and shipped in 20 packs per carton.
Sudan beef is considered one of the best with excellent taste because the
cattle are reared in healthy conditions, conforming to international
certification and in natural grazing fed with organic food. Sudan exports
livestock to Egypt, Jordan, Saudi Arabia and Gulf countries. The demand of
19
Sudanese beef is increasing due to its good reputation of disease-free

characteristic.
KHTs Frozen Block Beef shall hit the market by Mid-December 2013 at RRP
of RM17.00 per Kg and immediately provide consumers with alternative
real beef that is assured of excellent Quality, Halal & Toyyiba, Available,
Accessible, Affordable, Sustainable and Traceable.
The Frozen Block Beef specifications are appended below:Descriptions/Attributes
Specifications
Origin
Republic of Sudan
Shape
Block
Livestock Cattle
Age 2 to 3 years
Beef Preparation
Halal Slaughter & Toyyiba
Processing
HTAP Certified by DVS/JAKIM
Beef Physical Features
Beef Meat (Daging Pejal)
Chilled Ageing; Hygiene Room Processing

Blast Freezing; Vacuum Packed
Frozen Block; Boneless
Delivery Period From Production

Date
Max 45 days ETA Receiving Port
Colour
Meat Colour
Shipping Storage
-25C (Tolerance 2C)
Warehouse Storage
-18C (Tolerance 2C)
Relative Humidity % (RH %)
+95%
Shelf life
12 Months from Production Date
Unit Weight
1 kg / Unit (Tolerance 6%)
Unit Per Carton
20 Units / Carton
Per Carton Weight
20 kg (Tolerance 6%)
Palletisation
4 Carton/Layer; 12 Layer/Pallet; 48 Carton/Pallet;

Net Wt/Pallet = 0Kg/Pallet
Containerisation
1,1500 Carton/40FCL = 23,000Kg/40FCL
Pictures of Frozen Block Beef Packaging and 1Kg Pack
20
Pictures of Abattoir in Sudan
Pictures of Cattles in Sudan Farm and Holding/Quarantine Centers
21
9.2
KHT Products: Phase 1-4; Other Products

KHT shall plan to launch other HTAP Products and Complimentary Produce
in line with the National Food Security Policy of ensuring essential food
items are of excellent Quality, Halal & Toyyiba, Available, Accessible,
Affordable, Sustainable and Traceable.
The launch products like Value Added Meat Products, Mutton, Lamb,
Seafood, Horticulture & Fruits, Condiments & Spices shall be phased in
manageable timeframe in accordance to KHT and its Partners capacity,
guided by consumer and the market forces.
9.3
KHT Product Development

KHT Product R&D Strategies are:
9.4
Consumer Driven & Market Research

Create, Innovate and Develop
R&D, Pilot and Market Tested
Product Quality Assurance and Control

KHT QA & QC for HTAP Products are SOP Driven to assure:
10.0
Farm-to-Table Quality and Safety Priority 1

QA & Traceability Record & Report
QC Incessant & Precise
Record HTAP and ISO Standard
KHT PRICING STRATEGY

KHTs Pricing Strategy is design to encourage consumers trading-up and
tradingdown, supported by awareness A&P campaign of the facts.
KHT Block Beef shall be priced in-between Local Beef and Indian Buffalo Meat.
The price disparity (+23%) between KHT Block Beef vs Buffalo Meat, couple
with effective awareness campaign of the facts, shall encourage consumers to
trade-up to KHT Block Beef after knowing the facts.
22
The vast price disparity (-40%) between KHT Block Beef vs AUS/NZ Beef,
coupled with aggressive sampling activities to confirm the quality, taste &
tenderness profile of KHT Block Beef will definitely encourage trading-down.
Price disparity between Local Beef vs Buffalo Meat may also trigger tradingdown to KHT Block Beef but the impact shall be minimal due to the supply lower
than demand factor.
Beef/Meat
Source
INV RM/Kg
RCP RM/Kg
RM (%) Diff
IMPORTED BEEF
Aus/Nz/Us
25.00/Kg
28.00/Kg
-11.00(-40%)
LOCAL BEEF
Local
18.00/Kg
25.00/Kg
-8.00 (-32%)
SUDAN BEEF
Sudan
15.00/Kg
17.00/Kg
BUFFALO MEAT
India
10.00/Kg
15.00/Kg
+2.00 (+23%)
Source: FAMA, KPDNKK Jan 2013
11.0
KHT SALES STRATEGIES

KHTs Sales Strategy & Planning will accommodate the Level 1 Route-to-Market
business model.
Initial 2-3 months shall be filling-the-pipeline of the supply chain via KHTs
Distributor Vendors and mitigate the Demand-Exceed-Supply situation that causes
the RRP to increase (due to insufficient supply of local beef).
Entering a matured market, KHTs Sales Team will be SOP driven with minimum
tolerance for failure. Sales SOP will cover:
12.0
Account Opening & Management

Sales Call Routing Planning; Sales Call & Target
Order Processing & Planning; Demand Supply Forecast.
Warehouse Inventory Management
Delivery and Logistics Supply & Demand Planning Delivery
Collection$ Credit Management
Customer Service Centre and After-Sales Services; Merchandising
KHT MARKETING STRATEGIES

12.1
Marketing: Advertising
23
A&P activities in the meat market are still at its infancy. Market players do
not spend much advertising dollar to promote brands, quality or awareness
The first 2-3 months are critical for consumers to be aware and familiar with
KHT New Frozen Block Beef, acquire the quality taste profile, enjoy the fair
pricing and start building relationship & trust.
KHTs Marketing Strategy will tap marketing normality and existing market
practice, supported by subject matter experts to leverage the A&P infancy to
immediately create awareness about the new beef on the block without
much competing clutter in the air:
12.2
Maximum Impact & Awareness Branding, Real Beef, Premium Quality,

HTAP.
Differentiation from expensive Imported Beef & cheap low-class Buffalo

Meat.
Viable business model that offer Customer/Retailer Sustainable Supply

and Margins
Offering consumers alternative value-for-money Real Beef that is Halal &

Toyyiba, assured for Quality, Traceability and always Available,
Accessible, Affordable and Sustainable.
1st Wave to gain consumers trust: Generic Branding and soft approach to
address consumers functional & emotional orientation towards frozen
beef via sampling, pricing and engagement.
2nd Wave to secure consumers loyalty: Branding, Aggressive Advertising

& Promotion Program, Ground Activities, Awareness & Educational
Campaign to implant a permanent top-of-consumers-mind recall.
Marketing: Branding
KHTs Branding Strategy involves a few steps to ensure top-of-mind recall,
everytime, anytime, beginning with a generic brand for frozen beef for the
initial market entry for the first 2-3 months.
(i) Brand Positioning
KHT Products and Brand = Halal, Toyyiba, Values, Trusted by
Retailers & Consumers
Positive Imagery and Empathy that Create Emotional Bond with
Consumers
24
(ii) A Generic Brand

Proposed generic brand: Daging Rakyat 1 Malaysia (DR1M)
(iii)
The Mother Brand: Memorable in Industry, describe HTAP

Products
(iv)The Product (SKU) Brand: Memorable in Category, describe the

products
(v) Brand-names shall be Trademark worldwide and creatively and
uniquely crafted into Logos
(vi)Logos shall be Trademark-able worldwide and applicable to
Collaterals and POS Materials
12.3
Marketing: Message
Advertising the Brands and Products will be very focused with the intended
Message but yet Flexible to be able to cover the widest range of targets.
Messages are crafted to deliver:
(i) Corporate Communications
(ii) Thematic Campaign
(iii)Schematic Promotional Messages
12.4
Marketing: Advertising Medium

Advertising Platforms or Mediums must be pre-determined to ensure
effectiveness while stretching the budget.
ATL (Above the Line): Electronic & Print, Outdoor & Mobile, Digital
BTL (Below the Line): Collaterals, POS Materials
Ground Activities: Sampling & Demos, Events & Exhibitions, CookOffs, PR & CSR
Indirect Communication: Leveraging the relevant Agencies, Authorities
and NGOs
12.5
Marketing: Promotion
Promotions will be planned in accordance to requirement, occasion and/or
situations to be Thematic or Schematic in its deliverables.
25
(i) Trade Promotions

(ii) Consumer Promotions
(iii)Ground/Retail Sampling & Awareness Activities
(iv)Demonstration & Exhibitions and
(v) Launch and PR Events with DVS, JAKIN and PPIM
13.0
LOGISTICS
KHT Logistic Operation shall be SOP Driven from Port to Consumers table where
all potential problems and challenges will be research, mitigated with probable
solutions if it eventually occurs.
13.1
Importation and Supply to KHT

KHT business model shall focus on Trading, Distribution, Marketing and
Sales.
C&F Port Kelang, Malaysia from country of origin.
Delivered to KHT Warehouse or Ex-Production Plant from local
suppliers.
13.2
Freight & Forwarding and Haulage

KHT Team shall remain lean and multi-task.
F&F and Haulage Operations shall be outsource to a Master Logistic Vendor
who will monitor/supervise the many multi-discipline 3rd Party Service
Providers to manage the port clearance, haulage to warehouse, primary
transport and the procedures.
13.3
Warehouse
KHT Distribution Centre is HTAP compliance to uphold the National Food
Security Policy KPIs:
Contract with CCN, a HTAP Certified Logistic Services Provider
Vendor SME Warehouse Operators; Contract at Major Towns to serve as
KHT Regional Hub to ease KHT Distributor Vendor logistic constraints.
Quotations: Ad-Hoc, Dedicated
26
13.4
Transport
KHT major transport services must be HTAP compliance to uphold the NFSP
KPIs
Contract with CCN, a HTAP Certified Logistic Services Provider
Vendor SME Transportation Companies; Contract at Major Towns to
serve as 3rd Party Transporter to ease KHT Distributor Vendor logistic
constraints.
Quotations: Ad-Hoc, Dedicated
14.0
PROCESSES & SOP

KHT business operation is SOP Driven and has begun developing the necessary
SOPS in accordance to requirement and priority. SOPs will serve to guide operations
in order to achieve consistent result while maintaining high quality services and
products.
SOPs shall be applied to all Units of Operation in KHT including:
15.0
Corporate, HR and Legal

Marketing, A&P, Product & Margin Management
Sales, Credit Management & CSC
Logistic, Warehouse & Transport
Finance, Administration and Procurement
Quality Assurance & Quality Control
Consumer Relations
KHT'S MANAGEMENT AND ORGANIZATION STRUCTURE

15.1
Finance & Administration

KHT Financial requirement is ERP-Based System Driven to facilitate the
business process to ensure effective and efficient flow of data and
information.
Complying with Generally Accepted Accounting Procedure, KHT minimizes
mistakes and mitigate potential fraud. ERP-based System provides accurate:
Financial Records and Reporting
Inventory Management
27
15.2
Purchases, Orders and Delivery Management

Business Analysis and Forecast
Human Resource Management
Internet Banking Transactions
Corporate Affairs
Corporate Affairs shall oversee KHT Corporate matters including, amongst
others:
15.3
Corporate Communication Strategies and External Communications

Crisis and Reputation Management
Media relations
Corporate Governance & Responsibility
Stakeholders & Investor Relations
Liaison with Government Departments & Agencies.
Corporate Affairs & Legal

KHT has appointed Qualified Professional Firms to manage its Governance
& Legal requirement:
(i) Fajar Corporate Services Sdn Bhd Company Secretary
(ii) Hasnan & Co Auditor
(iii)Vincent Lim and Partners Panel Lawyer
(iv)Kreston Nat Consulting Sdn Bhd Business Consultant
15.4
Quality Control And Quality Assurance

KHT practices high level of competency in Quality Management to ensure
the HTAP Compliance and Processes are adhered to at all levels of operations
to meet Consumers expectations. KHT adopt approved Practices Standards
including:
(i) HTAP Standards & Principles
(ii) JAKIM Operations Guidelines
(iii)Department of Veterinary (DVS) Protocols for Food Safety
28
15.5
Organization Structure
KHT shall maintain a lean, focus and multi-tasking team at this start-up juncture. Each team member shall focus on their familiar
subject-matter and develop the business architecture and infra-structure form existing proven model but Adopt & Adapt to suit
KHT requirement, vision, mission and KPIs.
KHT Organization Structure is as follows:
KHT ORGANISATION STRUCTURE
25
16.0
FACILITIES AND LOCATION
Head Office
Konsortium H & T Sdn Bhd [Co. No: 78110-U]
No. 2852, Jalan Selangor, Bukit Persekutuan,
50480 Kuala Lumpur, Federal Territory, Malaysia
Tel: 603 2287 1060 Fax: 603 2287 4060
Email: info@konsortiumht.com.my
Operation Office
Konsortium H & T Sdn Bhd [Co.No: 78110-U]
Ground Floor, No. 3, Jalan Perindustrian Puchong, Bandar Metro Puchong,
47160 Puchong, Selangor Darul Ehsan, Malaysia
Tel: 603 80710413 Fax: 603 80826631
DC Warehouse
c/o Cold Chain Network Sdn Bhd [Co. No: 586732-P] No.
3, Jalan Perindustrian Puchong, Bandar Metro Puchong,
47160 Puchong, Selangor Darul Ehsan, Malaysia
Tel: 603 80710413 Fax: 603 80826631
26
17.0
KHT READINESS
Description
Date
Stakeholders
PBHH/HL KHT SPA
02 Oct 13
KHT & PBHH/HL
SPA Signed
1st PO FBBeef
03 Oct 13
KHT & PBHH/HL
Pilot 1 x FCL 40
Payment to PBHH
21 Oct 13
KHT & PBHH
Done
1st Shipment ETA Port Klang
15 Dec 13
KHT &TFP
22 Days Direct PS-PK
FBBeef @ Warehouse
17 Dec 13
KHT & CCN
3 Days Clearance
FBBeef @ Distributors
19 Dec 13
Distributors
38 Distributors
FBBeef @ Retailers
21 Dec 13
Mod & Trad
Pen Malaysia
FBBeef @ Consumers
22 Dec 13
Mass Consumers
Pen Malaysia
2 PO FBBeef 5 x FCL
17 Dec 13
KHT & PBHH
ETA PKlang 15Jan14
HTAP Program PR Launch
21 Dec 13
NFSP, SBSS, KHT
Launch @ Putrajaya
nd
Notes/Remarks
3rd PO FBBeef 10 x FCL
15 Jan 13
KHT & PBHH/HL
ETA PKlang 15Feb14
1st PO Special Cut Sudan Beef
30 Jan 14
KHT & PBHH/HL
ETA PKlang 28Feb14
4 PO FBBeef 10 x FCL
15 Feb 14
KHT & PBHH/HL
ETA PKlang 15Mar14
FBBeef Commercial Launch
08 Mar 14
KHT, SBSS
@ Hypermarket
5 PO FBBeef 20 x FCL
15 Mar 14
KHT & PBHH/HL
ETA PKlang 15Apr14
1st PO Sudan Mutton/Lamb
30 Mar 14
KHT & PBHH/HL
ETA PKlang 30Apr14
th
th
* All dates are firm as at 15 November and subject to change as we progress.
18.0
SETTING-UP COST
The total of setting-up cost is estimated at RM 870,000 which is shown below:Description
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
Total
Preliminary
Office rental & deposit (4 x 10,000)
Renovation
Electrical & Fittings
Computer
Furniture and fittings
Office utilities
Manpower
Advertisement
Travelling
Car
Total
27
40,000
120,000
20,000
10,000
50,000
30,000
150,000
100,000
150,000
200,000
870,000

KHT's Investment Memorandum for Sudan Cattle Industries

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SUDAN CATTLE INDUSTRIES SDN BHD

CORPORATE INFORMATION ............................................................................................... 1

KHT FINANCIAL INFORMATION ........................................................................................ 2

RETURN ON INVESTMENT .................................................................................................. 5

INVITATION TO INVESTOR ................................................................................................. 5

THE MARKET PLACE ............................................................................................................ 6

KHT BUSINESS PLAN ............................................................................................................ 7

KHT BUSINESS IMPLEMENTATION PROGRAM .............................................................. 9

KHT VENDOR DEVELOPMENT ......................................................................................... 13

KHT PRODUCTS ................................................................................................................... 14

KHT PRICING STRATEGY .................................................................................................. 19

KHT SALES STRATEGIES ................................................................................................... 19

KHT MARKETING STRATEGIES ....................................................................................... 20

PROCESSES & SOP ............................................................................................................... 23

KHT'S MANAGEMENT AND ORGANIZATION STRUCTURE ....................................... 23

FACILITIES AND LOCATION ............................................................................................. 26

KHT READINESS .................................................................................................................. 27

SETTING-UP COST ............................................................................................................... 27

Konsortium H&T Sdn Bhd

Authorised, Issued and Paid-Up Capital

Ismail Bin Mohd Aji

Proposed Konsortium Equity/Participatory Partners

Gedung Makanan Negara Bhd (subsidiary of Felda);

Shareholding Before and After Conversion of Redeemable Convertible

Preference Shares ("RCPS")

100% 5,400,000 (5,400,000)

KHT FINANCIAL INFORMATION

Profit and Loss Projections

Net Tangible Assets

Net Tangible Assets/share (RM)

After conversion of RCPS

Profit for Year 1

THE MARKET PLACE

Imp Buffalo Meat **

* Total Meat Market: Combination of Cattle Beef & Buffalo Meat

By Market Segment, throughput of meat/beef at Retail Sector commands

KHT BUSINESS PLAN

KHT Playing Field

traditional market (pasar) has developed into the ultra-modern retailer

KHT Key Objectives and KPIs

KHT BUSINESS IMPLEMENTATION PROGRAM

KHT Business Model

complimented by the blue ocean strategies, making it a hybrid of

Ensure Quality, Availability, Accessibility, Affordability, Sustainability,

Standard Operating Procedures (SOP) and Good Governance;

Best Products in Category and Best Services in Industry:- Quality,

Customer & Consumer Centric:- Availability, Affordability

Vendor Development:- Facilitate and Support; and

(ii) KHT Market Entry Strategies shall be:

Creating Product Differentiation in Existing Market Place

Creating Awareness and Stay on Top-Of-Consumers-Mind

Creating New Segment and Capture New Demand

R&D Products and Innovate Value-Added Product and Marketing

Target-Costing Price and Margin Management

Cost-Efficient and Lean Operation and Business Activities

Enter Uncontested Market Place and Make The Competitor

KHT Market Place

Suppliers at Level 0 (Upstream) are local breeders of livestock, importers

Wholesalers at Level 1 (Midstream) are distributors who would normally

Customers at Level 2 (Downstream) are segmented into Retailers,

KHTs Market Approach

KHTs market approach will focus at Level 1 (Midstream) Wholesalers,