China's relentless appetite for the colonel's chicken has KFC on a building boom in the world's most populous country, with 1,200 locations, soaring profits and a menu that mixes in bamboo shoots and lotus roots.

China's relentless appetite for the colonel's chicken has KFC on a building boom in the world's most populous country, with 1,200 locations, soaring profits and a menu that mixes in bamboo shoots and lotus roots.

At a time when its sales in the United States are struggling, KFC is dominating even rival McDonald's in China and turning the goateed visage of Kentucky Fried Chicken founder Colonel Harland Sanders into a ubiquitous symbol of America.

"We are really positioned as a part of the fabric of life in China,"said David Novak, chairman and chief executive of Louisville-based Yum Brands Inc., parent company of KFC.

Yum's operating profits in China exceeded US$200 million last year, more than half the company's burgeoning international profits. The pace of 275 locations opened in China last year is expected this year.

Sam Su, president of Yum's China division, called China "the ultimate marketplace."He predicted that as the Chinese economy grows, it would someday surpass the number of KFC restaurants in the United States, where there are 5,453 stand-alone locations and 1,277 multibrand outlets featuring other Yum brands.

"In many parts of China, the local municipal governments actually view the arrival of a KFC as a sign of the city coming of age,"Su said.

A restaurant industry analyst said KFC's recipe for success in China includes a solid business plan guided by a management team intact for years.

"For many companies, China is a hope and a dream—maybe a very realistic hope and a dream—but for Yum it's reality today,"said Joe Buckley with Bear Stearns & Co."It's an important piece of the company that still has plenty of growth potential ahead of it."

Yum's China operations represented about 15 percent of the company's operating profits last year, a figure expected to reach about 18 percent this year, Buckley said.

He said Chinese fast-food consumers'preference for chicken had contributed to KFC’s success."It's an advantage to be the chicken brand, given that scenario."

KFC consumers in China can dig into buckets of original recipe chicken, but KFC has tailored some dishes specifically to Chinese tastes. There's a twister sandwich styled after the way Peking duck is served, but with fried chicken inside along with cucumber shreds. Instead of coleslaw, which never caught on in China, customers can order seasonal vegetables. In spring, it's bamboo shoots; in summer, lotus roots are on the menu. And in colder months, there's rice porridge and winter soup.

Other Yum brands also are vying for Chinese customers.

The company opened at least 39 Pizza Hut restaurants in China last year, for a total of 146 outlets, and Su predicted a bright future for the chain."With the rising income and economic growth, there's no reason to doubt that Pizza Hut will be a huge brand,"he said.

Taco Bell is testing a casual dining format in China, and Yum is even dabbling in Chinese fast food with one test restaurant in Shanghai.

"We are working on a model that hopefully can work across China,"Su said of Yum's Chinese fare."If that happens, it's going to be a huge business opportunity."

But KFC is clearly at the forefront of Yum's expansion. More than 100 KFC restaurants have sprung up in both Beijing and Shanghai. KFC restaurants have reached 280 Chinese cities, compared with just 20 cities in 2000. Yum's revenues in China topped US$1 billion last year, up from US$261 million in 1998.

In China, KFC has outpaced rival McDonald's Corp., which has its own expansion plans. McDonald's has more than 600 restaurants in China and plans to open about 100 more this year, comparable to last year. Its long-range plans call for 1,000 restaurants in China by 2008.