Hen Lin eyeing Davao expansion, IPO

BY PATRICIA DE LEON, GMANews.TV Chinese food vendor Hen Lin is planning to set up shop in Davao in a joint venture with a group based in the city. At the sidelines of the 27th Agora Awards, Hen Lin president Mariano S. Manas also said they were also preparing to list in the Philippine Stock Exchange, which they hope to time with their silver anniversary in 2008. He said they started preparations for their initial public offering as early as two years ago, when they had their financial statements professionally audited. Hen Lin, which operates under the corporate M&H Food Corp., is a 100 percent family-owned business. Manas said that at their IPO, the firm would be willing to give away to the public the minimum percent of shares required by the PSE. Manas, who won the Agora Award for large scale entrepreneurship, said the company was in talks about its expansion options in southern Philippines with a big Davao-based group which owns a warehouse chain. He refused to specifically name the group. "We're only in Luzon right now. The first time we did it in Cebu we had to transport via refrigerated van all the goods, and then hire cold storage. So obviously our overhead costs became much higher," Manas said. Hen Lin has roughly at most 130 food cart and dine-in stalls in Luzon, including its two flagship stores located one each along the North and South Luzon Expressways. Seventy percent of the chain's outlets are company-owned while the rest are franchised. Hen Lin started its Cebu operations in 1993, opening in tandem with SM's first mall in the city. However, they lasted for only 2 years because of the lack of a nearby commissary. With the Davao venture in the works, Manas said setting up a commissary somewhere in the South is being eyed. "That is part of the studies being made," Manas said. Manas said tougher competition and higher production costs had been dragging down the firm's growth. Hen Lin competes directly against fast food giant Chowking and smaller chain Dimsum and Dumplings. "The past two years have been sluggish for us. Unlike before when growth has been drastic, now we've had our share of difficulties." Next year maybe brighter for the firm, Manas said, although he said they will still maintain a conservative expansion approach. "We're going on our twenty-third year now. We've been long in the business but very quiet. It was only about eight or ten years ago when we started to spread our wings and become more conspicuous." - GMANews.TV