Pinoy Business Coach

IN a disclosure on Wednesday, publicly-listed fast food company Jollibee Foods Corp. (JFC) said one of its subsidiaries inked a joint-venture deal with a Singaporean firm to build a commissary in China.

 The company known for its sweet spaghetti said that “its wholly-owned subsidiary Jollibee Worldwide Pte. Ltd. signed in Shanghai, People’s Republic of China (PRC) an agreement with Hua Xia Harvest Holding Pte. Ltd. to undertake food manufacturing operations to supply products primarily to the JFC Group.”

The company has three commissary system sites in the Philippines: Santolan, Pasig City; Mandaue City, Cebu; and the central site in Canlubang, Laguna.

“The system manages Jollibee’s total supply chain process,” the company said on its website.

The joint-venture company in China, Jollibee Foods Processing Pte. Ltd., “intends to invest a total of RMB50 million [renminbi] [which is equivalent to P338,595,470.52 at current exchange rates] in this facility,” JFC said in its disclosure.

It said the amount includes the cost of acquisition of the right to use the land in Shucheng County in Anhui province, which is in the northwestern part of eastern China.

Shucheng, one of five Anhui counties, is popular for its bamboo mats.

“This commissary will supply the products for the restaurants of the Jollibee Group in China, initially, Yonghe King, for its stores in Beijing,” JFC said.

The company said Yonghe King is one of two businesses it operates in China. It has 177 Yonghe King stores and 49 Hong Zhuang Yuan stores, all in China’s capital Beijing.

The company said that by next year, it will own 55 percent of San Pin Wang restaurant chain, which has 34 stores in South China.

The fast-food giant said prior to the deal with Hua Xia, it relied on third-party suppliers for its product supply in China.

JFC will own 70 percent of Jollibee Foods Processing Pte. Ltd., while Hua Xia owns the rest, the disclosure read.

The JFC Group of Companies operates the Philippines’s largest fast-food network, the company said. As of June 30, it had a total of 1,584 stores nationwide, 700 of which are under its eponymous Jollibee brand. It also operates 257 stores abroad.

In the first quarter of this year, the company said its system-wide retail sales increased 8.4 percent to P16.34 billion as against the P15.07 billion in the same period last year. It a consolidated net income of P691 million for the first quarter of 2010, 23-percent higher than the net income generated in the same period last year.