By Arra B. Francia
SHAKEY’S Pizza Asia Ventures, Inc. (SPAVI) is ramping up efforts to take its pizza business to previously untapped territories, as it aims to grow earnings and sales by mid-teens by end 2017.
SPAVI President and Chief Executive Officer Vicente L. Gregorio on Thursday said the company is starting to further expand into the Visayas and Mindanao region, noting that there only 16 Shakey’s branches in the area.
SPAVI is allocating around P400 million to P500 million for the construction of 20 stores in the Philippines, adding to its 189 stores as of end March.
“We think there’s a lot of runway and opportunity in the Visayas Mindanao region… Despite the current trouble in Mindanao, Marawi, I think there are many other places there, like Roxas, Aklan, to name a few, that would be ready for Shakey’s. That kind of expansion would be very good for the company,” Mr. Gregorio told reporters after the company’s annual shareholders meeting in Pasig on Thursday.
The SPAVI executive said four locations have been identified, with two more on the way. The company has also recently deployed a team that would screen the additional locations in the area.“Because we also have to be very careful, making sure that we not just to open the first possible location,” Mr. Gregorio added.
SPAVI is set to open its first international franchise in Kuwait by the first half of September, as part of a deal signed last year which commits the construction of at least 10 stores in the country in the next five years.
Last July 13, the company also announced that it has inked a deal with Dubai-based firm Aljeel Capital to open least 10 stores in the United Arab Emirates in the next five years, bringing SPAVI’s total international commitments to 20.
“We think there’s a lot more countries in the Middle East region and in Asia where currently talks are ongoing. But we also want to be very prudent, very careful, making sure that our international expansion is done and executed right,” Mr. Gregorio said.
The company considers the Middle East a top priority for the pizza chain’s expansion, given the sizeable number of overseas Filipino workers (OFW) in the region.
For Asia, Mr. Gregorio said they are entertaining inquiries from entities in Indonesia and Myanmar.
With the company’s expansion, SPAVI looks to post mid-teens growth for both the top line and bottom line, within the range of the 13.4% growth in earnings to P760 million for 2016.
The profit guidance comes amid challenges facing SPAVI such as the weakening peso and increased competition.
“Increased competition for locations, for good labor. Import costs, while not a major part of our cost will also be affected because of the peso devaluation. It’s a mix of several factors combined will deliver pressure on the costs,” Mr. Gregorio said.
SPAVI aims to offset the pressure on input costs by being more efficient in operations.
“We believe there is still room to be more efficient, the management is really focusing on that,” he said.
For the first quarter of 2017, SPAVI reported its profit jumped 26% to P172.83 million, following a 22% growth in systemwide store sales.
