MANILA, Philippines – Cargill plans to expand its presence in the Philippines through a joint venture with Jollibee Foods Corp. (JFC), the largest Asian foodservice company. JFC and Cargill Philippines Inc., a wholly owned subsidiary of Cargill, will build a poultry processing facility in Santo Tomas, Batangas, Philippines.
JFC will be the primary customer of the joint venture, Cargill Joy Poultry Meats Production Inc. By-products and other products that don’t meet JFC product specifications will be sold to other companies. Cargill will have a 70 percent stake in the joint venture, while JFC will have a 30 percent stake. Cargill will establish management and operations for the poultry plant.
Under the terms of the agreement, JFC will invest Php244.9 million ($5.2 million) for 30 percent of Cargill Joy Poultry Meats Production. JFC also will invest Php15.2 million ($325,000) for 30 percent of Cargill Joy Poultry Realty, Inc., from which Cargill Joy Poultry Meats will lease the land on which the plant will be built.
Paul Fullbright, managing director of Cargill Joy Poultry Meats, said in a statement that Cargill is making additional investments in the Philippines to participate in the growth of its consumer sector.
“Cargill can contribute in further enhancing the quality of products of JFC brands for its customers at very competitive costs and raise the assurance of its chicken supply,” Fullbright said. “As in many other parts of the world where we do business, Cargill can also contribute in improving the system of hygiene, food safety, and quality by operating a world class facility and by setting high levels of partnership with the poultry growers and farmers. We look forward to a very productive poultry processing venture in the Philippines and with JFC.”
The joint venture will create 1,000 new jobs and opportunities for farmers in Batangas and surrounding provinces, Cargill said. Cargill Joy Poultry Meats will contract with local poultry farmers, who also stand to benefit from Cargill’s animal nutrition products.
“We partnered with Cargill to deliver high quality chicken products through Cargill’s technology and quality standards,” Ernesto Tanmantiong, CEO of JFC, said in a statement. “The facility will provide JFC with dressed and marinated chicken to augment the chicken supply requirements of the growing needs of JFC brands.
“This partnership will meaningfully benefit our customers, our operations as well as the overall Philippine food industry. We will continue to maintain our strong relationship with key chicken suppliers in the country and look forward to sustained long term supply arrangements with them as our businesses grow together.”
JFC, which operates the largest foodservice network in the Philippines, runs 2,506 restaurant outlets in the country as of April 30. Additionally, the JFC Group of Companies is one of the largest buyers of chicken in the Philippines. Significant volumes of chicken are sold by the company’s Jollibee, Mang Inasal, Chowking, Greenwich and Burger King franchises. JFC Group owns 3,158 stores worldwide. Other JFC holdings include a broad system of product supply chains that includes 13 commissaries in the Philippines.
In October 2015, Smashburger sold a 40 percent stake to JFC for $100 million. JFC also has a 50 percent interest in joint ventures with Highlands Coffee , Pho 24, 12 Hotpot and eight other companies.