Jollibee buys out partner in China's Happy Bee
MANILA, Philippines – Fastfood giant Jollibee Foods Corporation is acquiring 100% ownership of food manufacturing Happy Bee Foods Processing Private Limited in China for $10.4 million.
This is to support the continued growth of its flagship restaurant Yonghe Kong in China, its largest food business in that market.
Jollibee said in a disclosure to the Philippine Stock Exchange (PSE) that its wholly owned unit Jollibee Worldwide Private Limited (JWPL) entered into an agreement with Hua Xia Harvest Holdings Private Limited to acquire its 30% equity shareholding in the joint venture entity, Happy Bee Foods.
Prior to the acquisition, JWPL owned 70% interest in Happy Bee, which operates a manufacturing facility in Anhui, China.
The manufacturing facility currently services the requirements of Yonghe King.
Under the agreement, Hua Xia will sell and convey to JWPL its 30% equity interests in Happy Bee.
"The objectives of the acquisition of the 30% ownership of Happy Bee, essentially an equity share and asset swap, are for Jollibee to concentrate on supporting growth of its Yonghe King business and on further improving its food quality and increasing assurance on food safety," the fast-food giant said in the disclosure.
Jollibee said Yonghe King plans to accelerate its store network growth in 2016 and in the years ahead.
Yonghe King is currently Jollibee’s largest business in China comprising 321 stores and contributing 10% of its systemwide sales worldwide.
The transfer of shares and assets shall be subject to appropriate governmental and regulatory approvals, which are expected to be completed within 2016.
Jollbee operates a total of 20 commissaries worldwide – 13 in the Philippines, 3 in China, and one each in the United States and Vietnam.
It builds and operates its own commissary to supply food products to its restaurants.
This supply chain strategy aims to achieve superiority in product quality and a high level of assurance in food safety.
Aside from Yonghe King, Jollibee also owns several brands in China, namely, Hong Zhuang Yuan with 42 stores and San Pin Wang with 59 outlets.
In 2015, Jollibee's net income fell by 10.4% to P4.8 billion ($100.73 million) due to extraordinary costs. – Rappler.com
$1 = P47.65