Shanghai, Aug 13 - Ting Hsin International Group, China's biggest instant noodle maker, said it would open 1,000 snack noodle restaurants by 2015 to challenge Western brands such as McDonald's in the country's $25 billion fast food industry.
The noodle chain, named Master Kong Chef's Table, will first focus on major cities along China's eastern coast, Ting Hsin's marketing manager Chi Xiangzhen said in an interview on Monday.
"We'll open 1,000 outlets in the next seven years, and the longer-term plan is to have 10,000 outlets," said Chi, a Taiwanese who joined Ting Hsin last year, when the chain was launched.
"There's huge potential for the fast food business in China, due to urbanisation and the faster pace of living," she added.
Ting Hsin, which is mainly Taiwan-owned but headquartered in the northern Chinese city of Tianjin, has so far opened 12 Master Kong outlets in Shanghai, Beijing and the southern city of Shenzhen. The main dish is beef noodles.
The company expects the Chinese flavour to help it win customers in a market where the biggest players are U.S. companies such as McDonald's and Yum! Brands Inc. , which owns KFC and Pizza Hut.
Chinese food, which comprises 42 percent of China's fast food industry, is now growing faster than Western fare, Chi said.
Though Ting Hsin also sells fried chicken and hamburgers in China through its Dicos chain, most of Dicos' 650 outlets are based in the less affluent west of the country, where KFC and McDonald's are not yet dominant, she added.
Dicos posted 1.5 billion yuan ($198 million) in sales last year, less than a tenth of the 16.9 billion yuan revenue generated by Yum at its 2,000 outlets in China, according to the China Chain Store and Franchise Association.
"The Dicos experience is very important to the development of our Chinese noodle chain," said Chi. "We learned how to choose store locations and how to standardise our food products."
COMPETITORS RAISING CASH
Ting Hsin, parent of Hong Kong-listed Tingyi (Cayman Islands) Holding Corp., has a 43 percent share of China's instant noodle market in terms of value and 54 percent of the ready-to-drink tea market, Chi said.
Its fledgling noodle chain will compete with companies such as Ajisen (China) Holdings and Guangzhou Kungfu Catering Management Co.
Japanese-style noodle chain Ajisen, China's fifth biggest fast food company, raised US$210 million in a Hong Kong initial public offer of shares in March. Kungfu plans to follow suit.
Inner Mongolia Little Sheep Catering Chain Co., a Chinese operator of a "hotpot" chain, is seeking an overseas listing, having attracted investment from private equity firms 3i Group Plc and Prax Capital.
Even Yum, seeing the potential of Chinese-style fast food, forayed into that market in 2005 with a chain called "Dong Fang Ji Bai", a phrase taken from a Song dynasty poem that means "the east is dawning".
"Eventually, Chinese people will prefer Chinese food," Sam Su, Yum's China president, said in a public speech last month. "It's not impossible that one day, our Chinese food chain will be bigger than KFC."