Jollibee draws up expansion, acquisition plans in Indonesia, India

MANILA, Philippines - Jollibee Foods Corp. (JFC), the country’s largest fast food chain, wants to tap the large population of Indonesia and India through the expansion of existing brands and local acquisitions.

This is in line with the company’s goal of generating half of its sales and revenues from operations abroad in 2017, its top official said.

“In Indonesia, right now we have Chowking. We are still looking at how to enter Indonesia with Jollibee,” JFC chairman and chief executive Tony Tan Caktiong told The STAR.

“The market is there, it is more of studying the internal capability. Can we do it, do we have the people that can understand the local culture?” Tan Caktiong said.

To date, there are only two Chowking branches in Indonesia, which has a population around 245 million. Its population is also enjoying from increasing income due to robust economic growth.

Tan Caktiong said the Indonesian taste is geared towards more spicy “so there will be some adjustments” in the menu.

For Indonesia, JFC will be looking at the local market as there are no large Filipino communities in the country.

“It is a vision that we want to do something there. It should be within three to five years,” Tan Caktiong said.

Furthermore, JFC is still targeting to finally enter India through acquisitions following several delays.

“Probably we have to buy a local brand like what we did in China. Probably Indian food,” Tan Caktiong said.

India has a population of around 1.2 billion, with consumer spending continuously rising due to stable economic growth.

The timeline is also within three to five years, but it can be fasttracked if there are acquisition opportunities, Tan Caktiong said.

Meanwhile, for Mang Inasal, Tan Caktiong said the company is looking at introducing the brand to overseas Filipinos in the United States and the Middle East.

In 2010, JFC bought a 70 percent stake in the operator of chicken barbecue chain Mang Inasal for P3 billion.

Expansion plans abroad are part of the company’s goal of increasing its market base.

“I think we would like to hit 50-50. Probably that will require five years’ time,” Tan Caktiong said, adding that the current revenue mix is at 80-20 in favor of Philippine operations.

The target is three years behind the 2014 target set in 2004.

The Jollibee Group already owns and operates two businesses in China —Yonghe King that was acquired in 2004 and Hong Zhuang Yuan that was bought in 2008. It also has a 70 percent interest in Jollibee Foods Processing Ltd., a commissary in Shucheng, Anhui province.

In the Philippines, JFC operates Jollibee, Chowking, Greenwich, Red Ribbon, Mang Inasal and Burger King for a combined network of 1,997 branches. Overseas, the group had a total of 469 stores.

As of end-December 2011, the group had a total of 2,469 stores worldwide.

The fastfood giant’s net income was flat at P3.2 billion last year from P3.19 billion in 2010 as higher costs of raw materials offset the rise in sales.