Philippines' Jollibee sets sights on Indonesia with Coffee Bean beachhead

* Seeks to tap Indonesia's big population, steady growth
* Philippines' Jollibee rival to McDonald's, Yum Brands
* Aims for profit from newly acquired Coffee Bean in 12-18
months
* Hopes for 50% of sales from overseas within 3-5 years

By Neil Jerome Morales and Martin Petty
MANILA, July 31 (Reuters) - Philippines' Jollibee Foods Corp
JFC.PS is training its sights on Indonesia, with newly
acquired U.S. chain Coffee Bean & Tea Leaf its entry point in
the economically expanding and densely populated Southeast Asian
neighbour, its top officials said.
Jollibee has for years planned to bring its Chickenjoy fried
chicken and sweet spaghetti restaurants to Indonesia, but last
week's $100 million investment for the struggling coffee chain
has bought it a foothold in the market of 260 million people.
"One thing that might emerge and very interesting is
Indonesia," Chief Financial Officer Ysmael Baysa told Reuters.
The restaurant scene in Indonesia is cornered by the likes
of Restoran Sederhana, McDonald's Corp MCD.N , and Yum! Brands
Inc's YUM.N KFC and Pizza Hut.
"Coffee Bean gives us an immediate presence in Indonesia and
also gives us a platform on which we can further expand our
business there," Baysa said.
Jollibee's purchase of money-losing Coffee Bean from private
equity firm Advent International and others was its largest
foreign acquisition to date, and its second coffee brand after
Highlands Coffee in Vietnam. Coffee Bean has 101 outlets in
Indonesia among its 1,189 branches across 27 countries.
Jollibee, the Philippines' best-known brand, started as two
ice cream parlours four decades ago, but soon shifted to the
burgers and fried chicken that have been a big draw at home and
among many of the estimated 10 million Filipinos who work or
have settled overseas.
Through its 12 brands and franchises, Jollibee operates
3,195 outlets in the Philippines and has a further 1,418 dotted
across Southeast Asia, the Middle East, the United States,
Britain and China, among them Smashburger, Yonghee King, Chow
King, Greenwich, Red Ribbon, plus franchises of Dunkin in China
and Burger King in the Philippines.
Jollibee is eyeing a turnaround of Coffee Bean to make it
profitable in 12-18 months, Baysa said. Coffee Bean posted $313
million in revenue and a net loss of $21 million last year.
The Philippine fast-food chain was worth $5.8 billion prior
to announcing its acquisition but shed $890 million in market
value in two days as investors sold its stock on concerns about
it over-spending on a money-losing coffee chain. It has since
recouped more than half of the losses.
Jollibee President and Chief Executive Ernesto Tanmantiong
said the firm aims for 50% of sales to come from overseas within
three to five years, from about 27% now.
It aims to be among the world's five biggest fast-food
firms, he said, adding it has no qualms about delving into a
coffee market peppered with big names such as Starbucks Corp
SBUX.O and Tim Hortons.
"It's a very big market to enter," he told Reuters, adding
that the company would continue to broaden its portfolio of
businesses when it sees good opportunities.
"Our strategy is to have strong organic growth as well as
strategic acquisitions," he said.

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Philippines' Jollibee buying Coffee Bean & Tea Leaf in overseas
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