Jollibee expands in China; Q1 profit up 25%

By Honey Madrilejos-Reyes
Reporter

JOLLIBEE Foods Corporation (JFC) will expand in three key sites in China through acquisitions of new brands, its chairman and president Tony Tan Caktiong said Wednesday.

 “We are eyeing Shanghai, Schenzen and Guangzhou. It can be done through acquisitions of fastfood chains there,” he said in an interview.

The company, though, could not give a specific timetable for the plan, saying everything “is still exploratory”.

Also on Wednesday, the Philippines’ biggest fast-food company said first-quarter profit climbed 25.2 percent as sales increased.

Net income attributable to shareholders rose to P448.7 million ($8.7 million) from P358.3 million last year. Sales rose 16 percent to P7.6 billion from P6.5 billion.

The company said profit in 2005 increased 7 percent to P1.67 billion as sales gained 11 percent to P29 billion.

In the meantime, Tan Caktiong said they would continue to expand Jollibee’s Yonghe King brand, which, as of end-2005, has 101 stores all over China.

The group is also scheduled to open this year one Jollibee branch in the southern part of China.

For India, JFC’s plan is to likewise acquire a new brand. Tan Caktiong said they are now in talks with potential sellers but declined to identify them. “We are looking for the right brands at the right value,” he added.  This October, JFC will also open its first Red Ribbon branch in New Jersey, US.

The group ended 2005 with a net profit of P1.67 billion versus P1.56 billion the previous year. Revenues, on the other hand, were pegged at P29 billion from P26.3 billion in 2004.

This year, the group plans to open at least 100 new stores located mostly in the country.

“We will be spending maybe P1 billion to finance the establishment of these stores. The financing will come from our internal fund,” he said.

With operations in nine countries including the US, China, Indonesia, Vietnam and Hong Kong, JFC has plans of further expanding in other countries and in the Philippine market through the widening of store networks and acquisition of new businesses.

JFC holds the record of being the biggest fast-food operator in the Philippines. As of end-December 2005, it had a total of 1,273 stores in the country broken down as follows: Jollibee brand, 529; Chowking, 328; Greenwich, 239; Red Ribbon, 140; and Delifrance, 37.

Jollibee, which serves chicken, burgers and other meals, operated an outlet in Xiamen from 1998 to 2001. In 2004, it bought Yonghe King, which then had 77 outlets. Yonghe had 103 outlets as of February, the company said last month. Jollibee is in talks to buy more chains in China and India, Tancaktiong said. With Bloomberg

http://www.businessmirror.com.ph/0511/front05.php