Yum China Holdings Inc (百勝中國), the fast-food spin-off that began trading in New York on Tuesday, is ready to step out of the shadow of its parent company.
The newly minted business, which owns the KFC and Pizza Hut brands in China, has a carte blanche opportunity to pursue growth, Yum China CEO Micky Pant said in an interview yesterday.
He said the company would add 600 restaurants a year in China and plans to export its Mongolian hot pot chain, which is popular in the country, around the world.
Photo: Reuters
“We really have no restrictions on us at all,” Pant said in Shanghai. “We have the flexibility to invest in anything we like. It is a blank canvas for us.”
The separation follows a tumultuous stretch for the company’s Asia operations — Yum has been losing Chinese market share lately after a food-safety scare, changing tastes and more local competition took a toll.
Yum China might now win more customers over by being considered a local business, according to Yum Brands CEO Greg Creed.
“This is a Chinese brand; this is not a US brand anymore,” Creed said in an interview with Bloomberg Television.
The separation “reduces volatility and reduces risk,” he added.
Yum shares rose about 8 percent to close at US$26.19 in their first day of trading in New York.
At US$9.5 billion, its market value compares with US$22.3 billion for Yum Brands Inc.
Pant said the company plans to use successful local strategies to grow — rather than tactics that work in the US. That includes rapidly adding new restaurants to hit a goal of more than 20,000 outlets within 20 to 30 years, compared with the 15,000 restaurants in the US, he said.
Yum China will also look outside of China for growth. The company plans to expand its Little Sheep hot pot outlets globally through franchises, adding to its 40 outlets in North America.
“The place to sell Chinese food is outside China,” Pant said.
The only restriction on the company, “a gentleman’s agreement with Yum Brands,” is that it will not compete in the same areas, Pant said.
It is not actively looking for new acquisitions, he said.
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