Jollibee acquires 55% of China noodle chain

MANILA, Philippines - Fastfood giant Jollibee Foods Corp. (JFC) is further beefing up its presence overseas with the acquisition of a 55-percent stake in a low-priced noodle restaurant chain in China for $4.4 million.

In a disclosure to the Philippine Stock Exchange, JFC said it will pay 30 million renminbi for its investment in San Pin Wang, which operates 34 stores in Nanning and Liuzhou in southern China.

Guangxi Zong Kai Food and Beverage Investment Co. Ltd. (GZK) owns the remaining 45 percent of San Pin Wang. Both JFC and GZK will invest a total of 20 million renminbi to expand San Pin Wang’s operations.

The joint venture is expected to be fully operational by January 2011, JFC said.

San Pin Wang, which operates two commissaries and attracts a significant number of customers, expects annual sales of 100 renminbi million this year.

“I believe that we will be able to grow San Pin Wang to a very large and successful fast food chain in China. We wish to bring this brand to consumers in many other parts of China beginning with the neighboring provinces in South China,” said JFC chairman and chief executive officer Tony Tan Caktiong.

Currently, JFC operates two brands in China: Yonghe King in Shanghai and Hong Zhuang Yuan in Beijing. Yonghe King had 165 stores while Hong Zhuang Yuan had 46 as of March 31.

Sales in China account for nine percent of JFC’s systemwide sales.

JFC runs the country’s largest fastfood network with 1,569 stores - Jollibee (692), Chowking (401), Greenwich (227), Red Ribbon (211), Delifrance (24) and Manong Pepe’s (14).

Worldwide, the group had a total of 334 stores – Yonghe King (165), Jollibee (55) (mainly in the United States with 24, Vietnam 14, Brunei 11, Red Ribbon 35, Chowking, 33 (17 in the US and 14 in Dubai), and Hong Zhuang Yuan (46). This brings to 1,903 the total number of stores owned by the JFC Group stores worldwide.