Aeon eyes sustainable development


WITH the gradual reopening of the financial system and resumption of enterprise actions, Aeon Co (M) Bhd is optimistic of its prospects for this yr.

In gentle of the brighter outlook, managing director and chief govt officer Shafie Shamsuddin says Aeon has put aside a capital expenditure of between RM200mil and RM300mil for 2022.

“This will probably be for the development of know-how and refurbishment of our present property like malls and stalls,” he tells StarBizWeek.

“We even have plans to open a brand new departmental retailer by October.

“We hope that we are able to do higher than how we did in 2021. With the announcement from the federal government that there will probably be no extra closures, we’re optimistic.

“Nevertheless, we additionally want to observe the Covid state of affairs carefully. In January, circumstances had been low and it was a great month. However the circumstances went up in February and everybody has turn into extra cautious,” he stated.

For its monetary yr ended Dec 31, 2021, Aeon’s web revenue doubled to RM85.3mil from RM41.4mil within the previous yr, pushed by higher margins from improved buying methods and enhanced negotiations, coupled with disciplined price administration.

Income in 2021 stood at RM3.63bil in contrast with RM4.05bil within the earlier corresponding interval.

Regardless of posting greater than a 100% year-on-year surge in earnings final yr, Shafie says 2021 was certainly a tricky interval for the group. “Final yr was equally difficult, if no more tough than 2020. This was primarily due to the overall variety of days of closures for our non-essential companies, because it was rather a lot increased than 2020.”

Based on Shafie, non-essential companies had been compelled to close down for 119 days final yr.

“Whether or not it is our personal retail or companions in our malls, that is 33% of no enterprise for the yr.

“Additionally, in 2020, the motion management order (MCO) began in March and we nonetheless had Chinese language New 12 months festivities to leverage on. However in 2021, the federal government applied the MCO 2.0 from January to February.”

Comparatively, sentiment was affected a little bit otherwise in 2021 in contrast with 2020.

“When Covid hit, it was a panic. Final yr, it wasn’t a lot of a panic anymore. As a substitute, everybody was extra cautious and prudent. Individuals had been extra involved in regards to the lingering uncertainties – how lengthy will or not it’s? How will it influence myself, my household or my firm?”

To stay sustainable in the course of the peak of the pandemic final yr, Aeon had labored carefully with all of its stakeholders.

“The Covid pandemic was a disaster for everybody. So we requested ourselves: ‘How can we be extra proactive in being sustainable?’

“We’ve got a big ecosystem. So we requested ourselves: ‘How can we leverage it and construct synergies with our tenants, companions, shoppers and workers?'”

Within the midst of a disaster, it was essential for Aeon to have the ability to “mirror, be taught and develop”.

“We did not need to simply concentrate on surviving ourself. In step with our ‘Aeon Sayap Bagimu’ sustainability initiative, we aimed to assist the smaller enterprises, workers and different stakeholders and see if we are able to develop collectively.”In 2021, Shafie says Aeon introduced in 400 suppliers comprising small enterprises.

“These suppliers produced round RM135mil value of gross sales in a yr and so they had been on the lookout for a platform to promote their merchandise.

“One of many small suppliers that labored with us. In 2019, it was making RM100,000 in gross sales. By 2021, it grew to RM1.1mil. It’s proof that in the course of the pandemic, we are able to develop if we actually put our palms collectively.”

Moreover, Aeon additionally labored with the medium-sized suppliers.

“For the smaller companies, their gross sales will vary between RM100,000 and RM1mil, however for the medium-sized ones, they’re between RM1mil and RM10mil per yr for every provider.

“We get about 100 of the medium-sized suppliers to assist them develop. Their gross sales grew 40% from 2019 to 2021. We make the comparability with 2019 as a result of it is pre-pandemic.”

Rising the companies of the suppliers additionally meant that their contributions could be better, in response to Shafie.

“The contributions of the medium-sized suppliers have additionally grown. Previously, they contributed 19% to us. However now, it is grown to twenty-eight%.”

Moreover, Aeon noticed the pandemic as a chance to reskill its workers.

“Previously, we had been a bit extra inflexible in shifting our workers to totally different departments.

“However in the course of the pandemic and having to endure over 100 days of closure, we used it as a chance to retrain them as a result of if we don’t give them an opportunity to maneuver, they could threat getting their salaries reduce or be made redundant.”

Aside from Aeon’s prime administration, Shafie says not one of the group’s workers obtained wage cuts in the course of the pandemic.

“There have been 10 of us (in prime administration) whose salaries had been reduce initially of 2020 for about 9 months, till the tip of 2020.”

Aeon raised the minimal wage for its workers to RM1,500 monthly from RM1,200, efficient Jan 1, this yr.

“Finally, between 25% and 30% of our workers benefited from this improve in minimal wage,” he says.

Going ahead, Shafie says Aeon will probably be trying to scale back the extent of carbon emissions at its shops nationwide.

“We’ve got began with two malls, specifically Aeon Taman Maluri and Aeon Alpha Angle, the place we’re putting in photo voltaic panels.”

The department stores will collectively have 17,000 sq m of photo voltaic panels.

“Collectively, the department stores will have the ability to generate a carbon emission discount of three,300 tonnes each year. That is equal to driving a automotive for 13.3 million km, or financial savings of 1.7 million liters of petrol.”

Shafie says investments for the set up of the panels will probably be performed with a companion.

“The whole investments, with our companion, will probably be RM10mil for the panels for the 2 malls.

“Aeon Taman Maluri is accomplished, whereas Aeon Alpha Angle will probably be prepared in April.”

Aeon is presently learning the potential of putting in photo voltaic panels in any respect of its malls nationwide.

“We’ve got signed a memorandum of understanding to check the potential of putting in photo voltaic panels on our 40 different malls and we goal to do it in lower than two years,” he stated.

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