Sunday, 22 May 2011

Jollibee widens Asia reach

by Jenniffer B. Austria
Manila Standard
http://www.manilastandardtoday.com/insideBusiness.htm?f=2011/may/21/business1.isx&d=2011/may/21

A unit of fastfood giant Jollibee Foods Corp. signed an agreement with Viet Thai International Joint Stock Co. to set up a venture that will own and operate restaurants in Vietnam, Hong Kong, Macau and Southern China.

Jollibee said in a statement to the Philippine Stock Exchange that Jollibee Worldwide Pte. Ltd. planned to invest $25 million for 49 percent of the venture in Vietnam and 60 percent of the partnership in Hong Kong. Part of the investment will fund the venture’s purchase of an additional restaurant chain, Jollibee said.

Viet Thai and related parties will own the balance in the joint ventures and receive an advance in the amount of $35 million. The money will be repaid with an interest at the rate of 5 percent per annum in 2016.

“Upon completion of such acquisition, the joint venture is expected to have a total of 139 outlets across its brands, including 118 in Vietnam and 21 international stores in five countries,” Jollibee said.

The Vietnam-based Viet Thai has extensive experience in the food and beverge industry as owner and operator of Highlands Coffee, Hard Rock Cafe and several smaller food outlets. It also owns and operates Hard Rock Cafe in Hong Kong.

Jollibee, meanwhile, said it would acquire all 20 Chowking stores in the United States owned by Fortune Food Co. Inc. for $16 million. Fortune Food operates 18 Chowking stores in California and one each in Nevada and Washington.

Fortune Food owns and operates all Chowking stores in the US as the master licensee.

Jollibee said the acquisition would put in a position to take a more active role to further growth of the Chowking business in the United States.

Jollibee said the profit of the Chowking stores in the US was positive in 2010 with sales totaling $19.2 million.

Jollibee last week reported that first-quarter net income dropped 10 percent to P622 million on year due to higher costs of inputs.

Sales from restaurant chains in the Philippines grew 13.1 percent, driven by the Jollibee and Mang Inasal brands. However, other domestic businesses posted a decline in same store sales during the quarter due to inflation pressure on consumer spending.

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