Local McDonald’s chain spending P3.5 B for expansion

MANILA, Philippines - Golden Arches Development Corp., the local franchise holder of global fast food giant McDonald’s, is spending P3.5 billion this year for store expansion and construction of a new meat plant to sustain its growth.

GADC intends to open at least 45 stores nationwide.

“Our immediate target for this year is around 45 restaurants. We are optimistic since the Philippines is growing quite fast and we want to keep pace with the growth and further grow all over the country,” said Kenneth Yang, president and CEO of GADC.

“For the years after that, we may increase but we have to see what happens to the economy and I think the economy is doing well, population is there and we are in a nice demographic area for young people. We are very bullish on the Philippines,” he added.

While 80 percent of McDonald’s stores is concentrated in Luzon and Metro Manila, GADC wants to explore more in Visayas and Mindanao to cater to more consumers.

Last year, GADC opened 45 stores including its 500th store located along the Tagaytay-Calamba road. There are currently 521 operating stores under the company’s portfolio.

New stores will rise in Dumaguete, Antique and Sorsogon for the first quarter of the year.

McDonald’s is also building a P1.5 billion meat plant in Calamba, Laguna to supplement the operation of its existing plant in Cainta, Rizal.

Yang said GADC likely posted net earnings of P1.2 billion last year, sustaining its double-digit growth for the past 10 years.

System wide sales, a measure of all sales to consumers both from company-owned and franchised stores, grew 14 percent to P38 billion last year.  The figure is expected to increase further to P41 billion this year.

Meawnhile, GADC chairman George Yang said the company has no plans to go public anytime soon.

“We are focusing on the business and we don’t need to go public as of the moment. We just do our own thing, the company is controlled by us and we are just answering to ourselves,” he said.

Next to China and Japan, McDonald’s Philippines is the biggest and leading market for the brand in Greater Asia in terms of store units.

Of the total McDonald’s stores in the country, 55 percent is owned by the Yang family while the remaining 45 percent is franchised.

A McDonald’s franchise amounts to about P40 million to P50 million with a return of investment in four to five years.