Fast-food giant Jollibee sires P3-B baby Fresh N' Famous

SEC APPROVES MERGER OF THREE J.F.C. FOOD UNITS

 

By Honey Madrilejos-Reyes

Reporter

THE Securities and Exchange Commission (SEC) on Friday approved the articles and plan of merger for the three food subsidiaries of listed fast-food giant Jollibee Foods Corp. (JFC).

In a disclosure to the stock exchange, JFC said the SEC has endorsed the merger executed on November 10 among Chowking Food Corp. (Chowking), Greenwich Pizza Corp. (Greenwich), and Baker Fresh Foods Philippines, Inc. (Baker Fresh). Chowking, now known as Fresh N' Famous Foods Inc., will be the surviving entity.

The merger effectively formed a P3-billion entity. According to JFC vice president for finance Ysmael Baysa, Fresh N' Famous Foods Inc., would be the second-biggest food service company in the Philippines next to JFC, with total stores numbering about 624 as of end-October 2006.

Parent firm JFC reported a 61.2-percent increase in net profit for the third quarter of 2006 to P440.5 million versus P273.2 million in the same period in 2005.

Revenues, on the other hand, grew 16.7 percent to P8.02 billion over the previous level of P6.87 billion.

Baysa said the better financial results was influenced by the 15.7- percent rise in systemwide sales, a measure of all sales to consumers both  from company-owned and franchised stores driven by the strong performance of  most brands in the Philippines, the acquisition of Red Ribbon and a substantial growth in its foreign operations.

"Domestic business sales increase by 12 percent while foreign business sales grew by 50 percent including the acquisition of Red Ribbon," said Baysa.

In the coming years, he disclosed, the company is gearing toward making its international operations account for 50 percent of the group's total revenues. "We are in that path to achieve that in a few years time," he said.

There is a plan to open six new Red Ribbon stores in the US this year and according to Baysa, the group will be spending at least $1.8 million to support this expansion. The new stores will be established in Queens, New York; Bergenfield, New Jersey; two in Las Vegas, Nevada and also two branches in California. There are 19 Red Ribbon stores stationed abroad as of end-September.

Also, the company will try to set aside P1.8 billion in the next six to eight years to buy additional brands that will complement its current portfolio.

"If you take a look at our portfolio, we do not have yet a bread store and fast-food stores which specializes in Filipino and Japanese food," Baysa said.

As of end-September 2006, it was operating a total of 1,329 stores in the Philippines: Jollibee 559; Chowking 342; Greenwich 241; Red Ribbon 146; and Delifrance 41. Abroad, the group ended the nine-month period with 167 stores: Yonghe King in China 105; Jollibee in the USE 11, Red Ribbon in the US 19; Chowking in the US 10; Chowking in Dubai 6; Chowking in Indonesia 3; and Jollibee in other countries 13.

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January 8, 2007