27 FEBRUARY 2002

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Food Chain in financial turnaround bid

Farsons made its long-expected announcement on Monday that it would be restructuring its fast-food subsidiary, Food Chain, and closing two outlets in the process.

Last month, in an interview he gave to this newspaper, Farsons managing director Louis Farrugia admitted that the company was preparing to downsize its operations at its fast food outlets, although at the time he would neither confirm or deny that the restructuring would involve restaurant closures.

"It is not an easy choice to make, but ultimately, I’m charged with the responsibility of ensuring we increase profitability and sometimes one has to make a decision of whether to move forward and acquire new franchises or sometimes downsize operations," he said. "The objective must be to increase the profitability of the business for the benefit of both the shareholders and the employees."

The two casualties are Food Chain’s Burger King restaurant in Fgura and its KFC restaurant in Paceville.

The move means that Farsons, which holds the franchises for Pizza Hut, Burger King and KFC, will be reducing its 10 outlets to eight.

As Mr Farrugia had explained to this newspaper, the restructuring will see changes to Food Chain’s head office set-up and Farsons as a company focusing on and investing in its local operations.

In line with this, new staff appointments have been made; with effect from 1 April, Mario Cassar, at present Food Chain’s general manager, will take up a new position as Group Property Manager of Trident Developments Company Limited, the property development subsidiary of the Farsons Group. Mr Cassar is also being appointed Director to the Board of Food Chain (Holdings) Limited as from that date.

Also with effect from 1 April, Charles Xuereb, at present Food Chain’s Financial Controller, will move to Simonds Farsons Cisk plc as Group Accountant. His expanded role will continue to include the monitoring of Food Chain’s accounting function.

Food Chain has re-organised its support functions around a smaller nucleus of employees following a decrease in staffing levels mainly achieved by staff taking up the company’s voluntary resignation compensation scheme. This nucleus of support staff will be led by Ms Stefania Conte, at present Pizza Hut and KFC Operations Manager, who is being appointed Business Manager with effect from 1 April. She will have responsibility for all the support functions including the Central Preparation Unit. Alex Mifsud will take on the position of Restaurants Operations Manager with operational responsibility for the Pizza Hut, Burger King and KFC brands, reporting to the Food Chain Business Manager.

Farsons announced that it is believed this re-structuring will achieve a turnaround of Food Chain’s financial position by operating from a lower cost-base and will allow it to benefit from eventual improvements in the sector in which it operates.

The Business Times, Network House, Vjal ir-Rihan San Gwann SGN 07
Tel: (356) 382741-3, 382745-6 | Fax: (356) 385075 | e-mail: editorial@networkpublications.com.mt