MANILA -- Jollibee Foods Corporation is keeping its newest acquisition Compose Coffee in Korea for now, its chief financial officer said Thursday.

"There is no plan to bring Compose Coffee to the Philippines," said Richard Shin, as he explained that they see a lot of growth potential for Compose Coffee in its home turf.

"We're very focused on here for at least the next five years." 

"Compose is sitting at 8 percent market share in Korea so we think there's plenty of focus and plenty of opportunities. Also [the] company was started in Busan. So in terms of where they started to really build out the stores, I would say...we're under-indexed in greater Seoul," he said. 

"And as we all know greater Seoul has the largest population and consumption opportunity so we're very excited about that and we're gonna continue to grow in Korea," he added.

Shin also explained that growing their market share in Korea will give better returns to their shareholders.

"Because it's quite lucrative and quite profitable, we think purely from the cash that it generates, we probably would have a very quick payback," he said.

"Even if it took a very modest growth rate just based on new franchisees--so roughly, 30 to 40 new franchisees per month are opening stores--if you just add that in, you get to a pretty, decent growth rate. And so with that growth rate, there's no reason why in five to six years we should not be able to hit payback on this."

The executive also said they are not too keen on expanding to other markets like Hong Kong or mainland China.

"China's a tough market. And I say it's a tough market because even Starbucks as great as they are. They're starting to feel it in China, with the...cold teas and the other value segment players. It's it's quite challenging in China, so we wouldn't take that direction."

Jollibee announced its acquisition of a majority shareholding of effectively 70 percent of Compose Coffee in early July.

Jollibee says 'annyeonghaseyo' as it buys South Korean coffee chain Compose Coffee

The Philippine-based fast-food giant said Compose Coffee has over 2,000 franchised stores in South Korea, and is a leader in terms of brand satisfaction among Korean coffee brands.

It also noted that Compose Coffee has a debt-free balance sheet, and good cash returns and profitability margins.

Asked why the company isn't entering the South Korean market with its flagship brand, Shin said they may have to do more research to enter the Seoul market.

"If Jollibee was to ever enter Korea in the fried chicken space, we really have to know what we're doing because it's a very different palette. The Koreans have a very different palate for fried chicken," he said.

"Although we think about it once in a while--new market entry for Jollibee--Korea is not necessarily taught because of that sort of intense competitive market. Having said that coffee is a bit more universal."

"So iced Americano is iced Americano. And if you use great beans, you can taste the difference--the flavor's stronger, it's not bitter," he noted.

Growing its coffee and tea business is one of Jollibee's goals for 2024. Jollibee also owns Coffee Bean and Tea Leaf (CBTL), and has an interest in Vietnamese brand Highlands Coffee.

It also brought Tiong Bahru Bakery and Common Man Coffee Roasters to the Philippines.

JFC says Tiong Bahru Bakery, Common Man Coffee Roasters won't compete with CBTL

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