Pepsico treats China to pizza and chicken

Susan Oh

PIZZA Hut, a unit of food giant Pepsico Inc, will open 100 restaurants in China over the next five years, the Wall Street Journal has reported.

The size of the investment was not disclosed. Pizza Hut now operates six outlets in China.

Separately, Kentucky Fried Chicken (KFC), also owned by Pepsico, announced it had opened its 28th outlet in China, in Shanghai.

KFC said it intended to invest US$200 million in China over the next four years, adding at least another 172 outlets.

At a ceremony to open the Shanghai restaurant, KFC president John Cranor said President Bill Clinton's decision to stop linking China's trade privileges to its human rights performance had ''removed uncertainty from our China business''.

Mr Clinton had threatened not to renew China's Most Favoured Nation trading status if Beijing did not make ''significant overall progress'' on human rights, but backed down after taking into account United States' wider economic and strategic interests.

At the KFC opening, some 100 school children dressed as Colonel Sanders marched along the Huangpu River occasionally flapping the ''chicken dance'' and handing out plastic Colonel fans.

A Pudong official was presented with a crystal chicken and later hundreds of guests dined on ''finger lickin' good'' poultry.

It was KFC's 9,000th site worldwide.

''Every year is the Year of the Chicken at KFC,'' said Mr Cranor at the outdoor ceremony in Pudong.

While the display of ''Colonel-mania'' may be comic, the fried chicken chain is doing serious business in China.

Total revenue from its first China location in Beijing since 1987 is US$50 million.

Having consistently doubled its operations in the past three years, KFC now aims to increase the size of its restaurant network eight times over by 1998.

Mr Cranor credits country manager Sam Su for its success in China.

He said all operational managers should be local.

''To conduct a business, you need knowledge of the local economy and politics. I don't pretend to know this from Louisville, Kentucky,'' he said.

It was also critical to empower local managers, said Mr Crane, noting that Mr Su was given the power to budget and hire staff.

By 1998, KFC expects to employ 20,000 Chinese.

Although he would not elaborate on benefits and wages, Timothy Lane, president, Asia Pacific, said salaries were competitive with local standards while staff received medical benefits.

Safety training is mandatory and employees are given skid-proof shoes.

The Pudong location is a joint venture in which KFC owns 25.5 per cent.