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Saturday, June 28, 2014

Jollibee eyes US acquisition, aggressive expansion in existing markets

The Philippines' leading fast-food chain is looking to expand its footprint in the United States, even as it unveils another wave of store openings back home.

On the sidelines of its stockholders meeting today, Jollibee Foods Corp (JFC) chairman Tony Tan Caktiong told reporters that the company "would like to have more play in the US market."

"Probably we are looking at a certain acquisition in the US. In terms of when we see it, there's no timetable yet. We are open to anything that may come up. It could be in the same category. We are still very flexible. More important is we want to go to a brand that is already growing. We don't want to go in a brand that needs to be turned around," Tan Caktiong said.

Ysmael Baysa, JFC chief financial officer, said the company's operation in the US was "profitable," with sales growing by 9.9 percent in 2013.

JFC's operation in Asia -- particularly in Brunei, Singapore, Hong Kong and the Middle East -- are also making money, except those in Vietnam and China.

"In China, the brand is profitable, but we have a lot of overhead because of our central plants and head office there. It 's quite manageable, not big numbers," Baysa said, referring to the losses of Jollibee's China operations.

JFC's sales growth in the Philippines expanded by 11.3 percent in 2013, while that in China was up 19.7 percent. Sales in the rest of Southeast Asia and the Middle East jumped by 32.2 percent.

Baysa said JFC has allotted P6.3 billion for capital expenditures to finance the opening of 300 stores this year, of which 200 will be in the Philippines and 100 abroad.

"The business continues to be very strong both in the Philippines and worldwide. We continue to experience double digit growth rates in some branch just like in several quarters," Baysa said.

Tan Caktiong said the outlook of the company is very positive this year because the Philippine economy is very strong.

"We look forward to another year of record performance in 2014, as we accelerate our profitable growth, expand our business in key markets around the world and reinforce our competitive strength," he said.

The government is aiming to grow the Philippine economy by 6.5-7.5 percent this year.

In the first quarter of the year, the homegrown fast food giant recorded a net income of P1.08 billion, up 20.50 percent from a year ago's P895 million.

System-wide retail sales, a measure of all sales to consumers from company-owned and franchised stores, jumped 14.6 percent to P27.31 billion from P23.84 billion in 2013 -- making the first quarter's performance the highest quarterly organic sales growth in 5 years.

The Philippine business posted a 12.3 percent expansion in system-wide sales on the back of a double-digit growth of Greenwich, Red Ribbon and Mang Inasal, coupled with higher same-store sales due to increased volume and consumer visits. The Jollibee group also raised selling prices to cover the increase in cost of raw materials.

Compared to domestic operations, JFC’s international business expanded at a faster pace of 24.3 percent with Southeast Asia and the Middle East business growing by 39.1 percent, China by 22.3 percent, and the US by

- Interaksyon

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