The wholly owned Philippine subsidiary of commodities trader Cargill Inc. is partnering with a Philippine fast-food giant to build and operate a poultry processing plant in Batangas province, south of Manila.
The joint venture, Cargill Joy Poultry Meats Production Inc. (CJPMPI), will be 70% owned by Cargill Philippines Inc. and the remaining 30% by Jollibee Foods Corp. (JFC), which is Asia's largest food service company, Cargill said Tuesday, May 24 (Wednesday in Manila).
"The partnership will create an estimated 1,000 new full-time jobs and develop new opportunities in the farming community in the Batangas and nearby provinces as local poultry farmers are contracted to grow chicken to supply the requirements of the processing plant," JFC said in a filing with the Philippine Stock Exchange Wednesday.
Ernesto Tanmantiong, JFC chief executive officer, said in a statement, "We partnered with Cargill to deliver high quality chicken products through Cargill's technology and quality standards. 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," he added.
Paul Fullbright, CJPMPI managing director, said, "Cargill is making additional investments in the Philippines to participate in the robust 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.
"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 level of partnership with the poultry growers and farmers. We look forward to a very productive poultry processing venture in the Philippines and with JFC".
Cargill will invest PHP571.5 million (US$12.23 million) for 70% of CJPMPI and JFC PHP244.9 million ($5.24 million) for the 30%.
JFC will also invest PHP15.2 million for a 30% stake in Cargill Joy Poultry Realty Inc., from which CJPMPI will lease the land on which the plant will be located (Santo Tomas town in Batangas).
Cargill said it will oversee the setting up, management and operations of the poultry processing facility.
More room for animal business
As early as October last year, Cargill announced plans to put up a poultry production facility in the Philippines, saying there was more room for animal business in the Southeast Asian country of 100 million people.
The new investment will complement Cargill's animal nutrition business in the Philippines where it operates four animal feed mills in Pangasinan, Bulacan and Misamis Oriental provinces.
Cargill established its first office in Asia in the Philippines in 1947 as an exporter of copra for its vegetable oil business in the US.
The JFC Group of Companies is one of the largest buyers of chicken in the Philippines. Its brands Jollibee, Mang Inasal, Chowking, Greenwich and Burger King franchise sell significant volume of chicken products.
JFC operates 2,506 restaurant outlets in the Philippines and 650 abroad, including in China, the US, Singapore, Vietnam, Brunei, Saudi Arabia, Qatar, Kuwait, Hong Kong, Bahrain, UAE and Oman.
Cargill's Official Website: www.cargill.com