Jollibee to spend $60 million to expand Tim Ho Wan in China

Jollibee [JFC 228.40 0.26%] [link] said yesterday that it will push US $60 million into the Titan Dining fund, which owns the Tim Ho Wan restaurant chain.

JFC owns 90% of Titan Dining.

The capital injection will increase the fund’s committed capital from $156 million to $217 million, which the fund will use to expand Tim Ho Wan in mainland China.

JFC, the global quick service restaurant behemoth owned by Tony Caktiong, currently has 11 Tim Ho wan restaurants in China, mostly in Shanghai, but plans to open 100 new restaurants over the next four years in other parts of the country.

The expansion also aligns with Mr. Caktiong’s desire to grow JFC’s non-Philippines portfolio to become roughly 50% of its revenue and profit.

Currently, JFC earns approximately 45% of its revenue from its non-Philippines locations. Internally, JFC considers the Philippines, China, and the US to be its “three major growth centers”.

JFC CEO, Ernesto Tanmantiong, said recently that the company’s goal is to “see these three pillar markets contribute equally”.
 

MB BOTTOM-LINE

This move shows that JFC is not afraid to be aggressive in difficult times.

Considering the state of the Chinese restaurant industry during China’s ill-fated “zero-COVID” policy and all of the lockdowns that have come with it, maybe Mr. Caktiong is looking at all the figurative blood in the streets and thinking it’s a great time to build a meaningful footprint.

JFC has a lot of building and expanding to do in order to grow the China and US markets to be equal, individually, to the income-generation and profitability of what it’s built here in the Philippines.

That kind of long-term diversification will help JFC weather any future COVID-like scenarios that arise through epidemics or natural disasters related to climate change.

The brutal impact of the original PH lockdown, and the uneven nature of the response around the globe, must have been a tremendous eye-opener to the group.

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