ORIENTAL Kopi is taking its first step into Indonesia through a joint venture with PT Era Boga Nusantara, paving the way for the expansion of its restaurant business in the country’s fast-growing food and beverage market.
The collaboration, formalised through a joint venture and shareholders’ agreement, will operate under PT Era Oriental Kopi.
Its initial focus will be on Jakarta, while Medan and airport locations across Indonesia are excluded from the arrangement.
Under the agreement, Oriental Kopi’s wholly owned unit, Oriental Coffee International, will own a 40% stake in the joint venture, with PT Era Boga Nusantara holding the remaining 60%.
The joint venture company is expected to begin operating its first restaurant within 12 months of the agreement.
The partnership will run for an initial five-year term and will automatically renew for subsequent five-year periods, provided neither party defaults on the agreement.
The venture will have an initial capital commitment of approximately RM4.91 mil.
Oriental Kopi’s portion amounts to around RM1.96 mil, which will be financed through internally generated funds, bank borrowings, or a combination of both.
MBSB Research views the partnership favourably as it offers Oriental Kopi a relatively low-risk entry into Indonesia’s sizeable F&B sector.
By working with an established local partner, the company can tap into existing market expertise, operational capabilities and business networks while keeping its upfront investment manageable.
Although the venture is unlikely to make a meaningful contribution to earnings in the near term, a successful rollout in Jakarta would demonstrate the brand’s ability to scale beyond Malaysia and could serve as a springboard for expansion into other international markets.
Separately, Oriental Kopi entered into a Territory Franchise Agreement with Coffee Time Ltd, granting exclusive rights to develop and operate Oriental Kopi restaurants in Mauritius.
Under the arrangement, Coffee Time will pay Oriental Coffee International the applicable franchise fee and monthly royalty for each restaurant operated.
While Mauritius is unlikely to move the earnings needle materially in the near term, the franchise arrangement is positive from a returns perspective as it offers potential recurring royalty income with minimal capital commitment.
This complements Oriental Kopi’s JV-led approach in Indonesia, creating a more balanced overseas expansion model that combines larger-market participation with asset-light brand monetisation.
“We continue to view Oriental Kopi as a strong consumer brand with healthy topline momentum, attractive store economics and meaningful medium-term growth optionality from café expansion, FMCG distribution, Singapore and broader overseas expansion,” said MBSB.
While the financial year 2026 remains an investment year, management expects margins to improve in the coming quarters, with quarter three and quarter four typically stronger periods.
“We believe this should help ease concerns over earlier margin pressure from staff costs, foreign worker levy expenses, pre-opening costs, marketing expenses, FMCG listing fees and higher logistics costs,” said MBSB.—Aug 7, 2026
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