Jollibee sets sights on huge China market

The Jollibee group is setting its sights on the huge China market as it continuously expands its international operations toward potentially strong territories, company officials said.

Jollibee Foods Corp. (JFC) chairman and CEO Tony Tan Caktiong told reporters during the company’s stockholders meeting yesterday that despite the group’s plan to expand at a more modest pace, they are considering to put up Jollibee and Chowking stores in the Southern portion of mainland China, particularly the heavily-populated Shanghai.

He said these stores could either be company-owned or in partnership with local investors, requiring at least half a million dollar as capital outlay for each store.

"We can’t say how many stores we can put up but we have to start the ball rolling in a way," said Tan Caktiong. "But these are still plans that we are evaluating," he added.

As of end-March this year, the Jollibee group had 28 stores abroad, mostly in the US and Hong Kong. This is in addition to six Chowking stores also in the US and the Middle East and a lone Tokyo Teriyaki House – a new acquisition – in the US.

Tan Caktiong said plans to establish outlets in other Asian markets such as Singapore, Taiwan and Malaysia have been put on hold but expansion plans in the established markets like the US will continue.

"We believe we have a better product that the Chinese will appreciate…besides, the children love our mascot too," Tan Caktiong said.

After a slow first quarter, sales of the Jollibee group picked up strongly in the second quarter, prompting company officials to expect sales and income growths of 10-15 percent this year.

During the first quarter, JFC’s consolidated sales (including Chowking, Greenwhich and Delifrance) increased 11 percent to P6.1 billion but net profit shrank 8.8 percent to P198 million as a result of additional interest expenses and lower interest income.

"All indicators are up with respect to our second quarter numbers, with growth ranging in their mid-teens to more than 20 percent. If we can go over the hump by the third quarter, then we can reach or even surpass our growth targets this year," JFC chief financial officer Miguel Jose Navarrete said.

Last year, the Sept. 11 terrorist attack in the US sent shockwaves even to the fastfood eating habits of Filipinos, causing a halt on JFC’s growth momentum which was earlier headed toward a record year.

In 2001, JFC’s systemwide sales went up to P24.1 billion, from P20.3 billion a year earlier but a P372-million loss provisions cut down its net income to P587 million, from P900 million in 2000.