- Jollibee Foods Corporation is a large Philippine fast food chain that has expanded internationally, with over 2,000 stores in the Philippines and over 100 stores in other countries across Asia, the Middle East, and the US. It plans further expansion in Malaysia and Indonesia.
- Other large Philippine food companies that have expanded regionally include Max's Group and San Miguel Corporation. Max's Group owns numerous restaurant brands and plans new locations in the US, Canada, and Middle East. San Miguel Corporation produces beer and has breweries across Asia.
- Pharmaceutical company United Laboratories dominates the Philippine drug market and has a presence across ASEAN, while Zuellig Pharma is a major regional pharmaceutical distributor that originated
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Philippine Companies Expanding Across Southeast Asia
1. 34 Jan 2015
infrastructure
By Bienvenido “Nonoy” Oplas, Jr
Making
Overseas
Headways
consumer market
Pedestrians walk past by an outlet of Philippine fast-food chain, Jollibee, in Manila. afp
2. 35Jan 2015
C
onsequently, this is also an industry where local com-
panies have been particularly ambitious, with several
evolving into successful global exporters.
On the other hand, numerous foreign companies
based outside Asean have also positioned themselves inside one
or more of the 10 member countries, in a region with the third larg-
est population on the planet, next to China and India.
The large population with consumption of close to US$2 tril-
lion is one of the largest strengths of the region—offering more
people, more producers and consumers, more entrepreneurs and
workers, along with low dependency ratio, since the population is
generally young.
Among companies located in the Philippines,at least six have
already been listed among the largest transnational companies
with existing branches and subsidiaries, or as having expansion
plans in Asean.
Jollibee Foods Corporation (JFC) is a perfect example, as it oper-
ates the largest fast food chain in the Philippines. As of end-Sep-
tember 2014—what started as an ice cream parlor in 1975—has
grown to become a business with 2,121 food shops throughout
the country. Its flagship and most popular chain store is Jollibee,
with 800 stores nationwide, as of October 2013. It is owned by
billionaire Tony Tan Caktiong.
Other JFC food shops, each with dozens of branches, are
Chowking (noodles, etc), Greenwich (pizza), Red Ribbon (cakes, 250
plus stores), and Mang Inasal (chicken with unlimited rice). JFC also
holds the Philippine franchise for Burger King.
Further, JFC owns more than 100 stores internationally, with a
presence in the US, Middle East, China and Hong Kong. Though it
has yet to enter Canada and Europe, within the region Jollibee has
branches in Singapore, Vietnam and Brunei Darussalam.
In Singapore, JFC has a wholly-owned subsidiary, Golden Plate
Pte Ltd, which entered into an agreement with Beeworks Inc to
own and operate Jollibee stores there. GPPL will own 60% and Bee-
works will hold the remaining 40% stake in the company, with an
initial funding of US$1 million. JFC has 32 stores in Vietnam and 11
in Brunei, as well.
Now the company is set to enter Malaysia and return to Indo-
nesia, in the absence of a local fast food firm available for acquisi-
tion. Its reopening in Indonesia after the Asian financial crisis in the
late 1990s is largely encouraged by a very tempting market, given
its large population and rapidly growing middle class.
JFC’s plan, however, is not to expand into the neighboring coun-
try alone, but to have a local partner, according to the interaksyon.
com news portal.
Asia’s Biggest
In November 2013, the company declared, “Among all Asians,
restaurant companies including fast-food, Jollibee can be the big-
gest.” Also, JFC Chief Financial Officer Ysmael Baysa said the com-
pany could become Asia’s largest restaurant chain by 2020.
JFC also has a 50% interest in joint ventures with Highlands
Coffee (Vietnam, Philippines), Pho 24 (Vietnam, Indonesia, Philip-
pinesand Japan) and Sabu (China).
Also making it big in the food sector is the Max’s Group, which
owns numerous restaurant brands, with its flagship and most fa-
mous being Max’s Restaurant. Its 13 other brands include Max’s
Corner Bakery, Krispy Kreme (donuts), Jamba Juice, Pancake House,
Dencio’s, Kabisera ng Dencio’s, Teriyaki Boy, Sizzlin’ Pepper Steak,
Le Coeur De France, The Chicken Rice Shop, Singkit, Maple and Yel-
low Cab (pizza).
Southeast Asia’s economy is largely
driven by rising household consumption,
and one industry that thrives on this
consumption like no other is food and
beverages,vfuelled by rising personal
incomes and increased spending
the philippines
A Krispy Kreme outlet.
3. 36 Jan 2015
Max’s Group President Robert Trota was quoted by
interaksyon.com as saying that the company plans to open 12
locations in the US, Canada and the Middle East. In Asean,
Pancake House has four stores in Malaysia, while in Brunei it
recently opened its first store. “We’ve been looking at Indonesia,
Singapore…We’re just assessing formats,” Trota said.
Meanwhile, San Miguel Corporation (SMC) is known as one
of the Philippines’ largest corporations, with its San Miguel beer
flagship product. Currently, there are six San Miguel Breweries in
Asia, one in Hong Kong, two in China (Guangdong and Baoding) and
three within Asean (Vietnam, Thailand and Indonesia.)
San Miguel started as a brewery during Spanish colonial times
in 1890, but has diversified into packing, property, petrochemicals
and power generation.
However, San Miguel’s dominance in the food industry may
soon be facing a serious challenge from Indonesia’s Salim Group,
which through its Hong Kong-based conglomerate First Pacific Co
Ltd, and in cooperation with Malaysia’s Wilmar International, ac-
quired Australia’s Goodman Fielder for US$1.37 billion, according
to an smh.com.au report.
The transaction is expected to be completed in Q1-2015.
Beating MNCs
Within the pharmaceutical and healthcare sector, a local ge-
nerics manufacturer, United Laboratories (Unilab), has cornered
about 25% of the market share in the Philippine pharma market
and has out-performed all multinational pharma companies in the
country. It also has a presence in all Asean countries, except Brunei,
and will only expand its existing operations within the region.
In Indonesia, Unilab’s leading over the counter
brands are Decolgen and Neozep in the
cough and cold category, the multi-vi-
tamin Enervon C and Biogesic for
headache relief.
Apart from Unilab, there
is also Zuellig Pharma, one
of the largest multina-
tional pharmaceutical
distribution networks
in Asia. It originated in
the Philippines and its
operations today cov-
er all 10 Asean mem-
ber countries.
Separately, Pilmico
Foods Corp President
Sabin Aboitiz said the food
unit of the Aboitiz Group is
also eyeing acquisitions as a
template for expansion, capitaliz-
ing on opportunities presented by the
Asean economic integration.
Pilmico completed its first flour shipment to Viet-
nam last December, and is also opening an office in Indonesia.
Incorporated on Aug 8, 1958, Pilmico started out as a joint ven-
ture among the Aboitiz Group, Lu Do Group, Soriano Group and
the US Pillsbury Group.
At the end of the day, everything will look like a case of com-
panies from other Asean countries entering the Philippines and
Philippine companies entering other Asean economies.
However, it must also be taken into account that the region is
a complex and competitive market where success is defined not
only by product quality or marketing efforts, but also by the abil-
ity to deliver product to consumers using an optimal distribution
strategy.
It is therefore essential for all food and drink brands, and inves-
tors looking at the Southeast Asian market, to also have a sound
understanding of local distribution structures, coverage and com-
mercial terms. Only then can an expansion drive be truly effective.
* Myanmar population not included.
Source: IMF, World Economic Outlook 2014 Database
Asean Population and Consumer Market,
1995 and 2015, in million
1995 2015 Est. % Increase
Indonesia 194.8 255.1 31.0
Philippines 68.4 101.4 48.3
Vietnam 72.0 91.6 27.2
Thailand 59.5 68.9 15.8
Myanmar n.a. 51.8
Malaysia 20.7 31.0 49.8
Cambodia 10.8 15.5 44.0
Laos 4.9 7.0 44.3
Singapore 3.5 5.5 57.1
Brunei 0.3 0.4 46.0
Total 434.8* 628.3 44.5*
Promoting
healthier lifestyles.
afp
Workers at Zuellig Pharma