Jollibee trims interest in China

Homegrown fast-food giant Jollibee Foods Corp. is set to trim its interest in China with the sale of its 55-percent stake in local restaurant chain Guangxi San Pin Wang Food and Beverage Management Co. Ltd. (San Pin Wang).

The stake in San Pin Wang will be sold back by Jollibee Worldwide Pte. Ltd. (JWPL) to the group’s partner, Guangxi Zong Kai Food Beverage Investment Co. Ltd. (GZK), for 90 million RMB (P649.87 million).

In a disclosure to the Philippine Stock Exchange on Tuesday, Jollibee said it decided to focus on building its flagship Yonghe King business in China.  This is now its largest business in this territory with 315 stores as of end-November.

“JFC’s divestment of its shareholdings in San Pin Wang is part of its intention to concentrate its resources on businesses with greater potential,” the Jollibee disclosure said.

San Pin Wang is a local restaurant chain with stores mostly located in Guangzi province in the southern part of China.  Its menu is centered on low-priced beef noodle.  As of end-November, it had 71 stores.

The Jollibee group bought 55 percent of San Pin Wang from GZK in 2012, during which the chain had 34 stores and the network was already profitable.

Apart from Yonghe King, Jollibee still owns another local restaurant chain Hong Zhuang Yuan, a congee chain which it took over in 2008.  The chain now has 42 stores.

The group has likewise gained a foothold in China’s western food scene when it led in 2014 a consortium that committed to invest about $300 million in expanding and operating the Dunkin Donuts network.

The flagship business Yonghe King is one of the most well-known non-Western restaurant chains in this market.  The chain now has 316 stores.

In the past, Jollibee’s offshore expansion strategy had been to follow where the overseas Filipino communities are. But in recent years, the company has started acquiring local chains catering to domestic markets.

Now the leading quick service restaurant (QSR) in Asia in terms of market capitalization, the next milestone for Jollibee is to be among the world’s top five QSRs in seven years by growing its business in mainland China and the US while continuing to grow its businesses in the Philippines.

As of end-October, the Jollibee group had 3,236 stores worldwide, of which 2,565 were in the Philippines.