SINGAPORE - BreadTalk Group said on Monday (July 2) that a new partnership has been forged between its joint venture company BTG-Pindao Venture and Song Fa Holdings to operate and manage the Song Fa brand of restaurants in Shenzhen and Guangzhou.
A joint venture agreement was inked between BTG-Pindao Venture and Song Fa to incorporate BTG-Song Fa-Pindao Venture.
Under the latest joint venture agreement, BTG-SF-Pindao, through its wholly owned subsidiaries, will take over the role of operating and managing the Song Fa brand of restaurants in Shenzhen and Guangzhou. This role was originally covered under BTG-Song Fa Venture Pte Ltd, a joint venture between BreadTalk's Together Inc and Song Fa Venture.
BTG-SF-Pindao will be 90 per cent owned by BTG-Pindao and 10 per cent owned by Song Fa.
"Through this unique tripartite alliance, BreadTalk Group and Song Fa can leverage Pindao's resourcefulness in sourcing strategic locations in Shenzhen and Guangzhou as well as their demonstrated capabilities in developing sustainable talent pipelines through effective recruitment strategies," the group said.
"This will enable Song Fa to focus on delivering quality Bak Kut Teh cuisine to its consumers in both cities," it added.
BTG-Pindao Venture was formed earlier in May between Together Inc, a wholly owned unit of BreadTalk, and Shenzhen Pindao Food & Beverage Management Co to operate and manage the popular tea beverage brands Nayuki and Tai Gai in major South-east Asia markets.
Since BTG-Pindao Venture was set up, the group's management team has actively engaged Pindao to explore strategic opportunities of leveraging Pindao's robust business development and proven outlet expansion capabilities in South China for better synergy.
Following the successful launch of Song Fa's first restaurant by BTG-Song Fa Venture in Shanghai Jing An Kerry Centre on Jan 26, the group has been looking to introduce the Song Fa Bak Kut Teh brand of restaurants in South China.
BreadTalk group CEO Henry Chu said: "Shenzhen Pindao is hugely successful in guiding their brand towards explosive growth in the last three years. We observed that their success was primarily attributed towards creative and quality products, securing choice locations and building highly motivated teams.
"Through this alliance, we are confident of scaling new heights and bringing sustainable success through Pindao's experience to develop the Song Fa brand as a market leader in South China."
The investment is not expected to have any material impact on the earnings per share and net tangible assets of the group for the financial year ending Dec 31, 2018.