Asia
>0.5 million customers 8,000 associates 80 stores
Set for profitable
growth -
1999 was a year of restructuring for
Ahold's Asian operations. In October, Ahold
decided to focus its presence in the region
on Thailand and Malaysia where it already
holds strong positions and is set for future
profitable growth. The joint ventures in the
two markets represent close to 80% of
Ahold's 1998 Asian sales, which rose 16%
in 1999 to Euro 476 million, accounting
for 1 of total Ahold sales worldwide.
Operating losses in 1999 amounted to Euro
41 million, 13% less than in 1998. Ahold
continues its limited presence in Indonesia.
Stakes in the joint venture operations
in China and Singapore were sold in the
fourth quarter, reducing operating losses
and providing the necessary backdrop
for Ahold's Asian operations to reach
break-even towards the end of 2000
and contribute positively thereafter.
Since Ahold's joint ventures in Singapore
(sales of Euro 64 million) and Shanghai
(sales of Euro 33 million) were relatively
modest, they generated insufficient
economies of scale, would have needed
considerable new investment over a
longer period of time and, even then, had
no real prospect of becoming profitable.
Thailand
Ahold's operations in Thailand with CRC
saw sales rise 11% to Euro 277 million.
The currency crisis and the 11%
devaluation of the Thai Baht impacted
negatively. The activities in Thailand are
conducted under the TOPS supermarket
format. The 41 TOPS supermarkets in
the vicinity of Bangkok received wide
customer acclaim for their broad assort
ment of fresh, attractively-priced quality
products. Pricing policies and aggressive
marketing campaigns were sustained
throughout the year. Significant benefits
accrued from a new distribution center
and of World Fresh, the joint venture's
state-of-the-art food processing center.
Malaysia
Ahold's joint venture with the Kuok
Group generated sales of Euro 90 million
in 1999, a significant rise compared with
1998. The partnership strengthened its
position as market leader and reaped the
benefits from full-year consolidation of
the Parkson and Looking Good store
chains acquired in 1998 as the diverse
activities were integrated into one
franchise operation. All stores were
re-merchandised as part of a space
management program. A new distribution
center was opened at Subang Jaya,
just outside the capital Kuala Lumpur.
Indonesia
In Indonesia, Ahold generated sales of
Euro 12 million in 1999, a rise of 27%.
Two new stores, opened in the fourth
quarter, performed beyond expectations.
Ahold anticipates further operational
improvements as well as several new
store openings in 2000.
Royal Ahold Annual Report 1999 31
