Jollibee sells Taiwan units to focus on China

MANILA, Philippines - Local fastfood giant Jollibee Foods Corp. (JFC) has divested in Taiwanese restaurant chain Lao Dong and Chinese tea house Chun Shui Tang (CST) as it cooks up major acquisition deals in Mainland China.

In a disclosure to the Philippine Stock Exchange, JFC said it has terminated the joint venture that owns the Lao Dong business in the Republic of China (Taiwan) and its franchise agreement with Ice Tea International, franchisor of CST.

JFC owned a controlling 70 percent of Lao Dong (Singapore) and was the exclusive franchisee in China of CST, a brand that originated in Taiwan.

Lao Dong and CST account for less than one percent of the group’s worldwide sales, according to JFC.

JFC said it would instead focus on building bigger brands in the People’s Republic of China. Its brands Yonghe King and Hong Zhuang Yuan, with a total of 197 stores in China as of end-October 2009, now account for nine percent of worldwide sales and are growing at a double-digit rate.

JFC’s international business grew 53 percent in the third quarter this year with China sales rising 76 percent. Excluding the effect of the acquisition of Hong Zhuang Yuan in 2008, JFC’s sales in China in the third quarter were higher by 36 percent. 

By yearend, JFC expects a total of 35 stores in China and plans to open an even higher number of stores in 2010 in the years ahead. 

JFC operates the largest food service network in the Philippines with a total of 1,537 stores as of Oct. 31, 2009: Jollibee (675), Chowking (395), Greenwich (225), Red Ribbon (204), Delifrance (24) and Manong Pepe’s (14). 

Overseas, JFC has a total of 322 stores: Yonghe King in the People’s Republic of China (158), Jollibee (55), Red Ribbon (36), Chowking (34) and Hong Zhuang Yuan (39) for a total of 1,859 stores worldwide.

To further widen its presence, JFC is exploring new markets like Qatar and other areas where there is a large concentration of overseas Filipino workers (OFWs) as it continues to expand in existing markets like China, United States, Vietnam and India.

The company is targeting to build the same number of branches it did last year at 186 (110 in the Philippines and 76 overseas – the highest number of new store openings in its 30-year history).