Billionaire Tony Tan Caktiong’s Jollibee boosts global expansion as profits hit pre-pandemic levels

Jollibee Foods – controlled by billionaire Tony Tan Caktiong – said on Thursday it planned to accelerate its global expansion this year after the Filipino fast food giant announced that operating profit had returned to pre-levels the pandemic.

Supported by strong contributions from its restaurants in the Philippines and international markets, particularly in North America, Jollibee recorded a full-year operating profit of 6.3 billion pesos ($123 million) in 2021, almost on par with the 6.5 billion pesos reported in 2019 just before the Covid-19 pandemic wreaked havoc on the global economy. It was also a sharp reversal from the 12.8 billion peso operating loss the company suffered in 2020 when the shutdowns were aimed at curbing the spread of restaurants shuttered by the coronavirus.

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“We hope to continue the strong recovery in activity in 2022, particularly if restrictions in the Philippines are fully lifted, coupled with increased consumer spending in this election year,” said Jollibee CEO Ernest Tanmantiong. , in a press release.

This year, Jollibee plans 17.8 billion pesos of investment to open 500 new stores, expand logistics facilities and renovate existing restaurants around the world, more than double the 7.8 billion pesos spent in 2021 during the opening of 398 stores. The global expansion will be funded by cash generated from operations, bank loans as well as proceeds from bond issues and a possible initial public offering from its warehouse joint venture later this year.

“Beyond 2022, our prospects for business growth are even more promising,” Tanmantiong said. “We are seeing very strong expansion in different parts of our business, particularly in North America, China, Southeast Asia and Europe, while we expect the Philippines to maintain healthy and profitable growth. .”

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Jollibee has grown its global footprint organically as well as through acquisitions. Last year, it took a majority stake in dim sum chain Tim Ho Wan across Asia and bought stakes in Taiwanese bubble tea chain Milksha and invested in the Filipino franchise of Japanese restaurants Yoshinoya. .

Founded by Tan Caktiong in 1975 as a small family business selling ice cream, Jollibee now operates over 3,200 outlets in the Philippines and over 2,700 overseas, including US chains Smashburger and Coffee Bean. With a net worth of $2.7 billion, Tan Caktiong, 68, was ranked No. 7 on Forbes Asia list of the 50 richest people in the Philippines which was released in September. He also has a stake in developer DoubleDragon Properties.

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In August, Jollibee bought a stake in DoubleDragon’s CentralHub industrial hubs after injecting 16.4 hectares of industrial properties that the restaurant chain uses as commissioners. The partners are accelerating construction of warehouses across the Philippines to tap into growing demand from e-commerce businesses, ahead of an IPO in the second half of 2022, CentralHub said last month. It will be the nation’s first real estate investment trust focused on warehouse logistics assets.

“We will use proceeds from CentralHub’s eventual IPO to fund real estate investments for our new stores and commissaries which we will again convert into more REIT investments and equity,” Tan Caktiong said when Jollibee first invested in CentralHub in August. “Fundamentally, the REIT will help fund our future expansion on an ongoing basis. »