MANILA, Philippines – Food conglomerate Jollibee Foods Corp. (JFC) is on the look out for new companies to acquire in the US and China as the company aims to grow even bigger, a ranking official said.
“We continue to look for companies to acquire so we’re always working on something,” said JFC chief financial officer Ysmael Baysa.
He said the focus was outside the Philippines, particularly China and the US, which are the company’s biggest markets.
“Most likely, it’s outside of the Philippines. Our biggest markets are outside such as China and the US so most likely it’s in one of those countries,” Baysa said.
JFC also plans to bring Smashburger, the Colorado-headquartered burger giant it acquired last year, to Asia, possibly in the Philippines.
“The focus of Smashburger is the US. That continues to be the focus but we’re considering opening it in some international markets. One of them can be the Philippines or some other countries,” Baysa said.
Apart from the US, Smashburger is available in Panama, Costa Rica, Canada, Kuwait, Saudi Arabia, England and Egypt. It has no presence yet in Asia.
Last year, JFC acquired a 40-percent stake in the casual burger brand for $100.25 million.
Under the deal between the two burger giants, JFC has the option to purchase up to an additional 35 percent of Smashburger between 2018 and 2021 and the balance of 25 percent between 2019 at the earliest and 2026 at the latest.
The purchase price for the remaining 60 percent will be based on the achievement of certain financial performance targets agreed by the parties.
Smashburger serves fresh 100-percent certified Angus beef burgers. It has 339 restaurants with sales of approximately $339 million in 2015, equivalent to 12 percent of JFC’s estimated worldwide system wide sales for the same year.
JFC reported a net income of P3.06 billion in the first half, up 13.4 percent from P2.7 billion a year ago on strong sales within and outside the Philippines.
However, China’s sales fell 5.7 percent due to competitive pressure on Yonghe King, JFC’s largest brand there.
But Baysa said the company expects to recover sales in China by the end of the year.
“We’re confident we would be able to restore the growth because over the last few years we’ve been enjoying very good growth. Now competitors are putting pressure but we think that’s temporary. It could be as early as the fourth quarter or early next year,” he said.
Baysa said the company was looking forward to continued strong profit growth while preparing for likely higher inflation rate in 2017 in the Philippines and other parts of the world.
JFC has earmarked P10.4 billion in capital expenditures this year, more than double the P4.7 billion spent in 2015. Of the amount, P7.5 billion will be used for new stores and renovations of existing stores.
The group plans to build at least 200 new stores this year after opening 249 in 2015. The remaining P2.9 billion will mostly go to supply chain operations.
JFC operates the largest food service network in the Philippines, with 2,528 restaurants as of the end of June. Its brands are Jollibee, Chowking, Greenwich, Red Ribbon, Mang Inasal and Burger King.