Jollibee seeks more growth abroad
MANILA, Philippines - Homegrown fast food giant Jollibee Foods Corp (JFC) wants to grow its foreign business to account for 50% of its system-wide sales in 5 to 7 years, according to company chairman and CEO Tony Tan Caktiong.
In 2011, Jollibee sourced 80% of its P82.2 billion system-wide sales from its domestic operations and only 20% from overseas.
"We would like to target 50/50 probably by 5 to 7 years time," said Caktiong on the sidelines of JFC's annual stockholders' meeting on Friday, June 22.
"The challenge of course is the Philippines has a bigger base and Philippines is still growing quite good so if the foreign needs to overcome that ratio it needs to grow much, much faster. They're doing it but if the Philippines keeps on going up, there is the challenge of how to attain that ratio," he added.
Jollibee plans to add 300 stores in 2012, half in the Philippines and the rest abroad. "That will be the highest in our history," up from 260 new stores in 2011, said Ysmael Baysa, Vice President and CFO.
The company already experienced higher international sales growth than local sales growth last year. Sales in the Philippines rose by 16.7%, whereas foreign sales shot up 18.3%. Locally, sales were driven mainly by the acquisition of chicken barbecue chain Mang Inasal in November 2010 and the Burger King franchise in September 2011.
The importance of China
China has begun to play an increasingly important role in sales, explained Caktiong. JFC's sales in China grew 25.8% last year; meanwhile, Southeast Asia and the Middle East grew 25.2%.
Last year, JFC established headquarters in China -- a research and development center in Beijing and a food processing center in Anhui province.
Of the 150 foreign stores JFC will open this year, 100 will be in China, said Baysa. While one will be in Singapore, a new destination for Jollibee. "We are expanding Jollibee into Singapore this year. We will start with one and expand from there," said Caktiong.
Meanwhile, Jollibee is also considering more brand acquisitions in China. JFC already acquired 3 Chinese brands: Yonghe King (in 2005), Hong Zhuang Yuan (in 2008) and San Pin Wang (in 2012).
"Of course we would like to do one or two more brands in China but there's no target (brand in mind). It's not a rush. We'd like to be careful to get the right ones," said the CEO.
After an aggressive expansion in 2011, Caktiong said they do not have any brands targeted for acquisition this year yet, but a record number of stores will be added.
JFC's capital expenditures are expected to reach P5.8 billion, up from P3.7 billion in 2011, he added. - Rappler.com