Seventy-year-old Guangzhou Restaurant Co, a popular Cantonese food brand in Guangzhou, capital of south China's Guangdong Province, is preparing an expansion into other major Chinese cities.

This comes at a time when other restaurant brands in Guangzhou, which were or still are State-owned, have been closed down or been struggling to survive.

Founded in 1935, Guangzhou Restaurants are traditionally among the top four restaurants in town serving traditional Cantonese food, one of the four major culinary styles in China.

The company runs 10 restaurants, all in Guangzhou, and a food processing subsidiary Likofu, which processes frozen food, baked food, preserved meat and moon cakes.

Generating a revenue last year of 450 million yuan (US$55.49 million), it is one of the three largest restaurant groups in China specializing in Cantonese food, according to Zhao Liping, director of the general affairs office of Guangzhou Restaurant Co.

Beijing would be the first port of call for the expansion, Zhao said.

It aims to continue providing the service and quality of food offered in its Guangzhou outlets in order to minimize capital risk.

It plans to set up a management company for the purpose of training staff for the expansion.

Meanwhile, the group also intends to co-operate with foreign brands in food processing, which accounts for about one-third of its revenue at present, Zhao said.

The hotel business is another area it has considered entering into, since it could compliment its existing business.

The group itself is state-owned, although some of its restaurants are jointly owned by independent partners, and intends to reform its ownership structure and introduce more shareholders, Zhao said. The group has total assets of 550 million yuan (US$67.82 million) currently and employs 2,300 staff.

Decisions made in the 1980s and 1990s to carry out restaurant renovations and expansions within Guangzhou helped the group to survive the increasing competition that resulted shortly after the opening-up policy was adopted.

(China Daily December 7, 2005)