INB 780 International Business

The History and background of Nelson's Franchise (M) Sdn. Bhd The history of Nelsons Corn In Cup started in 1981, when a farmer from Banting asked Nelson Kwok Teng Toong to sell his 20 freshly harvested corn to be sell as a snack in his toy shop. Kwok took the corn cobs home and sampled them with his family. They discovered that the corn was sweet and soft, an attractive, extra treat for kids wanting toys. Kwok decided to sell the corn cobs in his shop as a snack and to his surprise; it wasn't long before the sales of corn were better than for the toys. This was when Kwok decided to convert his five toy shops into corn and ice cream parlors. By 1987, Kwok's toy shops were fully phased out, and selling corn on the cob was gaining momentum. In 1985, as the business thrived, Kwok opened two more outlets in PKNS Shah Alam and Jaya Shopping Complex. After number of years of operation, Kwok later realized that customer is not quite happy in holding a corn cob and walking around in the shopping mall. Later Kwok and his wife did some research on how to improve it and came with an idea by extracting the corn cob into a corn kernel manually and introduce corn in cup into the market. It was later then become the popular due to its simplicity and of course the unique taste and freshness. Now, from KTT Product Corporation Sdn Bhd to Nelson's Franchise (M) Sdn. Bhd with twenty five years of experience in sweetcorn has given the Nelson's brand an edge in the corn and snackfood industry. There are now more than 80 outlets throughout Peninsular Malaysian Sabah and Sarawak. Overseas, Nelson's is present in more than 800 outlets in 14 countries such as Turkey, China, Saudi Arabia, Kuwait, Indonesia and Brunei. The corn kernels of Nelsons Corn In Cup are derived from a new generation of hybrid corn called Nelsons 28. Based on three years of extensive research and development, Nelsons 28 is not only more nutritious and delicious but also higher in quality compared to other corn species. Nelsons 28 is grown by contract farmers on more than 1000 acres of land in the states of Perak and Sabah. The corn is harvested between 60 to 65 days to ensure high quality, price stability as well as consistency in supply. Nelsons 28 is then transported to their processing

INB 780 International Business

plants located in Ipoh and Kota Kinabalu. At the plants, the cleaning, blanching and freezing using advanced machinery and equipment of Nelsons 28 is carried out according to strict GMP and HACCP standards. The products from the processing plants are transported by refrigerated trucks throughout Malaysia outlets. After 20 years, consumers recognize Nelson's as a unique Malaysian franchise brand with 80-plus outlets in Malaysia . Nelsons best performing outlets are at Zoo Negara and Legoland, Johor. Nelsons vision is to be the country's leading corn and snack food franchise as well as to be represented in the Global Markets. Whereas, their mission is by contributing to the country's rising breed of entrepreneurs by providing an opportunity to own an affordable franchise business serving healthy and enriching food that can be enjoyed by people anytime, anywhere Milestone of Nelson's Franchise (M) Sdn. Bhd KTT Product Corporation Sdn Bhd faced the shortage of manpower and capital in order for them to open more outlets. Hence in order to expand the business, Kwok convinced the Ministry of Entrepreneur Development that with the franchising his outlets; a Malaysian franchise with greater potential for success would be established. In 1994, Kwok franchised Nelson's Corn In Cup, offering affordable business opportunities to young people with an entrepreneurial spirit by hands on operation and change the name to become Nelson's Franchise (M) Sdn. Bhd. Nelsons offered a hands on operation for 2 weeks to the franchisee either in full time or part time. They tailored their franchise system according to capital available by the franchisee. The range of set up cost is from RM30, 000 to RM80, 000 per outlet depends on the size out outlet and product range and Nelsons do not charge royalty to the franchisee. Nelsons will provide the processed corns to the franchisee from their factory

INB 780 International Business

Current Development of Nelson's Franchise (M) Sdn. Bhd Quality products are a must for Nelsons. This is the reason the company has ventured into farming and manufacturing of corn and other agriculture-based products to ensure high quality food is served at their franchise. They have also been supplying other restaurants and food-chains with their top-grade corn and agriculture products. All Nelsons products are rigorously checked for quality control from the farm all the way into the manufacturing process before it is made available to the consumers. Nelsons has obtained HALAL certification to ensure the purity of their products for the discerning market. International Market Entrant of Nelson's Franchise (M) Sdn. Bhd The attitude of building businesses together with others has made Nelsons to adapt to market demands and the ability to tailor their products to suit local consumers taste and preference. The popularity of Nelson's within Malaysia has attracted many foreign investors who see the franchise as a sound investment to bring to countries such as Turkey, China, Saudi Arabia, Kuwait, Jakarta, Brunei and many more. Saudi Arabia become the largest network with 300 outlets and contributes the biggest chunk to annual group sales of RM100 million. Utilising MATRADEs service for internationalization of Malaysian brands, Nelsons has continue to strengthen their global market presence, not just for their franchises, but also their supply chain products. Challenges and issues faced by Nelson's Franchise (M) Sdn. Bhd The productions at Nelsons corn field in Malaysia have fallen to 70% due to the labour shortage, hence stalling the growth of its business. Malaysians are not keen on manual work ant not many permits are issued to foreign workers to work in agricultural sector. Currently, Nelsons has cornfields in Chemor, Perak, Tuaran,Sabah and Melaka. Nelsons also has signed and agreement for a 50:50 joint venture with Kulim (Malaysia) Berhad, where Kulim will provide 40.5

INB 780 International Business

hector of land in Sedenak, Johor while Nelsons will plant and harvest sweet corn. Together, these four farms measure 324 hector and have the capacity to produce a total of 400 tonnes of corn per month. However, the labour shortage is now causing Nelsons existing farm to only run at 70% capacity or 280 tonnes a month. Nelsons also invested RM 5 million in c orn processing factory and land in Chemor, which has started operations in October 2012. However, this Current Strategies and Future Plan of International Business expansion By Nelson's Franchise (M) Sdn. Bhd