Apex-Pal to offer 16.5m shares at 26 each

Funds raised from the IPO will be used to expand locally and overseas

By Vince Chong - Aug 19, 2003
The Business Times

DOING business comes naturally to sushi king Douglas Foo, who once did four jobs in a single day - labourer, tuition teacher, baker and market researcher - because he wanted to optimise work experience before enlisting for National Service.

Talking to BT, the 34-year-old chief executive of Sesdaq-aspirant Apex-Pal, which operates the Sakae Sushi chain, admits to having been practical, with an eye for figures, from young.

Apex-Pal launches its initial public offer today and will sell 16.5 million new shares at 26 cents apiece. The issue comprises 800,000 shares for the public and 15.7 million placement shares (including 1.65 million reserved shares). The offer ends on Aug 26, with the counter set to trade two days later. 'I used to bring sandwiches to school because this saved money and I didn't have to squeeze with the crowd at the canteen,' said Mr Foo, whose father is an engineer.

From his various jobs - 'teaching tuition is very lucrative' - the 2002 Rotary-ASME Entrepreneur of the Year and 2003 Singapore Youth Award for Entrepreneurship recipient earned over $100,000, which he duly poured into setting up Apex-Pal in 1996. The company was then a garment-trading, India-based partnership, whose client base was predominantly Japanese.

'As the Chinese say, there are four major needs in the world - yi, shi, zhu, xing (literally translated into clothes, food, house and transport) - and having done business in clothes, I'm into food now,' he said.

'I have to choose these two needs because I may not be able to digest the other two. Japanese food has always been thought of as expensive but why should it be so?'

With an estimated half a million dollars earned from the garment business - which was bought by Mr Foo's management in India - the first Sakae Sushi outlet was opened at OUB Centre in 1997.

The chain has since grown to 18 outlets throughout Singapore and the proceeds from its IPO will be used to expand locally and overseas. Sakae Sushi has, through its franchise operations, also established itself in other parts of Asia. Mr Foo is aiming for 22-23 Singapore outlets in total. Apex-Pal has no bank borrowings.

Each Sakae Sushi eatery earns within six months of starting up, according to Mr Foo.

For the year ended Dec 31, 2002 , Apex-Pal turned in a pre-tax profit of $3.3 million on revenue of $23.5 million. In 2001, the group earned $2.4 million on turnover of $15.3 million.

The chain, Mr Foo said, may not be the first of the conveyor-belt-type sushi eateries in Singapore but it has managed to stay above the competition, partly because it doesn't use chefs. Instead, the sushi is made via a processing machine at a central kitchen.

'Most times a Japanese restaurant does not do well when its chef leaves, so we have eliminated that risk,' Mr Foo said.

'And when processing becomes a standard feature, the concept becomes franchiseable and scaleable. Staff at our sushi outlets do only touch-up jobs on the food and not actual cooking.'

The group also runs Crepes & Cream, a chain of trendy outlets serving innovative dishes, and Nouvelle Events, a food-processing and catering outfit.

These are also served by the central processing kitchen. And a Scandinavian-style eatery could soon join the group.

SBI E2-Capital is the listing manager for Apex-Pal