Restaurant operator Jollibee Foods Corp. plans to expand its presence overseas by acquiring a Mexican restaurant chain based in the United States.
The transaction will be the second acquisition for Jollibee in the US after purchasing hamburger chain Smashburger in 2015.
Jollibee chairman Tony Tan Caktiong said in an interview following the annual stockholders’ meeting the company was open to acquiring or forming a joint venture partnership for the Mexican brand.
“We want to play in the category. So we are interested in acquiring or forming joint venture for Mexican restaurant brand,” Tan Caktiong said.
Jollibee president Ernesto Tanmantiong said discussions were ongoing for the planned acquisition. He said a deal could be closed within the year.
“We are looking at this potential because Mexican market in US is huge. It [potential acquisition] can be small and we could just grow it or it could be medium size,” Tanmantiong said.
The acquisition is expected to help the company achieve its target of having a 50:50 revenue contribution from overseas and domestic stores by 2023.
About 20 percent of the group’s revenues currently come from stores overseas.
“There is still strong potential for growth for the Philippines. But we also see the opportunity for us to go out,” Tanmantiong said.
Tan Caktiong said that on the issue of contractualization, the company had complied with the Labor Department’s order to end contractualization.
“Jollibee is now working closely with Department of Labor and Employment. All our employees are either regular with us or regular with our service providers,” Tan Caktiong said.
Jollibee allocated P12 billion for 2018 capital expenditures, as it aims to open 500 stores worldwide this year.
Tanmantiong said P7 billion would be used for the opening of new stores and renovation, while P5 billion would be allotted for commissary investments.
The group also continues to open stores in Indonesia, the United Kingdom, and Malaysia.
It opened the first Jollibee store in Milan, Toronto, and Macau this year.
Jollibee said while the peso depreciation increased its domestic cost, it translated into gains in sales from overseas operations.
“The peso depreciation, while increasing costs in the Philippines provided gains in sales and profit from JFC’s businesses abroad. The business had shown resilience in the past and we expect it to continue to do so. We expect revenues and profit to continue to at least sustain its historical growth rates in 2018 and in the years ahead,” Tanmantiong.