Yum! Brands Inc. (YUM) plans to open a total of 15 KFC restaurants within five years in Mongolia, where mutton has long been the local staple and chicken was considered a rare treat until recently.
Ulaanbaatar-based Tavan Bogd Group, Yum’s partner in the North Asian country and whose businesses include distributing Volkswagen AG (VOW) cars, plans to open three more outlets in the capital by the end of this year, it said in a statement.
“We like to go into markets where no one has been before because we get the first mover advantage,” Micky Pant, head of Yum’s international business, said in an interview yesterday at the opening of its first restaurant in the country. “Mongolia has a very strong economy. We feel the timing is right.”
The Louisville, Kentucky-based restaurant chain, whose logo features the image of founder Colonel Harland Sanders, is entering the North Asian country as commodity mining and investment drive the nation’s development. Mongolia’s economy is forecast to expand 13 percent this year, according to World Bank estimates.
Pant said the restaurant will serve standard KFC items to start and later introduce new items to cater to the local diet, which is largely based on meat and milk products.
“Chicken is growing because people are switching from red to white meats, so I feel confident it will grow here in the future,” Pant said.
Yum’s opening of the Mongolia outlet comes after sales at stores open at least 12 months fell 29 percent in China last month as customers remained concerned about the safety of its chicken and the spread of bird flu hurt demand.
The fast-food chain sources its meat in Mongolia from countries such as Japan and the U.S. and plans to source its meat from Mongolia in two years.
Yum plans to enter the Myanmar market in future, Pant said without giving a timeline.
To contact the reporter on this story: Michael Kohn in Ulaanbaatar at firstname.lastname@example.org