The UAE-based Lulu Group is expected to open about 10 hypermarkets in Malaysia initially following the signing of a Memorandum of Understanding with Malaysia’s Federal Land Development Authority (Felda), a leading land development and resettlement agency.

The memorandum was signed by the director general of Felda, Y  Bhg Datuk Faizoull Ahmad and Yusuffali M A, managing director, LuLu Group International. The signing was witnessed by Prime Minister of Malaysia, Y AB Dato’ Sri Mohd Najib Tun Abdul Razak and chairman of Felda Tan Sri Hj Mohd Isa Abdul Samad.

Under the agreement, LuLu will lease the hypermarket buildings developed and constructed by Felda on a long-term basis, a statement said.

The start-up investment for each hypermarket will be around $30 to $40 million and a total of $200 million is expected to be invested in the initial stage, it was revealed at a press conference in Abu Dhabi.

The LuLu Hypermarket will gain more than 20 per cent of the domestic market share, based on the current economic outlook and location prospect, a spokesman said.

The UAE headquartered LuLu Group is today the leader in the hypermarkets business in the GCC region with 110 stores across nine countries serving more than 600,000 shoppers a day. The group reported a sales turnover of $5.4 billion last year.

The proposed locations for the establishment of LuLu Hypermarket in Malaysia are Kota Bharu Kelantan, Bukit Katil Malacca, Ipoh Perak, Nilai Icon City Negeri Sembilan, Shah Alam Selangor. Other locations are also currently being surveyed. Felda is also interested to develop other potentially strategic areas such as the Klang Valley, Johor Bharu and Penang, the statement said.

LuLu Hypermarkets are targeting to begin operations in Malaysia by early 2016 and this will add value to the Malaysian market by introducing the unique concept of Halal Hypermarkets. LuLu Hypermarkets are also planning to introduce new halal products as well as promoting Felda SME products in Malaysia and the Middle East. This initiative is expected to create job opportunities in both countries and thus fulfilling the public demands, the statement said.

"With a population of over 29 million, Malaysia needs quality halal-only hypermarkets and we will be the first to operate 100 percent Halal hypermarkets there," Reuters quoted Yusuffali as saying.

LuLu Group also plans to enter Indonesia next year. "We plan to open two hypermarkets initially and later expand," he said without elaborating.

The financing for the retail expansion overseas will be met by the group, he added.

The increase in bilateral trade between Malaysia and UAE in the F&B sector has been promising due to the initiatives of Felda and Malaysia’s strong representation in the UAE. Malaysia also wishes to strengthen further relations in the retail sector to bring these countries together, it said.

Felda is currently promoting processed food (frozen and dry), fresh fruits and vegetable and aquaculture as well as crafts, health and wellness products. Felda has been successful in transforming Malaysian entrepreneur community from the humble beginning of selling only for the local market, to now catering to the larger international market in partnership with the Lulu Group. -TradeArabia News Service