South Africa’s biggest fast-food
restaurant chain Famous Brands will take a 51 percent stake in its
Botswana franchise partner, it said on Tuesday, ahead of a potential
broader foray in the rest of Africa.
Retail Group, Famous Brands’ Botswana’s
master licence partner, runs 28 restaurants that include pizza, burgers
and ice cream in the diamond-rich southern African country.
Financial details of the deal were not disclosed.
Famous Brands, which operates in several
African countries such as Nigeria, Zambia and Kenya, makes less than 10
percent of its 3.3 billion rand ($271.95 million) in annual sales in
the rest of Africa.
“We have ambitious and deliberate plans
to grow our business outside of South Africa, and we foresee our
operations in the rest of Africa becoming increasingly significant to
the Group over time,” Famous Brands Chief Executive Kevin Hedderwick
said.
Africa’s consumption prospects have been
in the limelight since at least 2010 after Wal-Mart Stores Inc
announced a $2.4 billion acquisition of South Africa’s Massmart, a deal
that gave the world’s No.1 retailer a foothold in several markets on the
continent.
At one level, Africa’s pool of consumers
with disposable income is expanding thanks to a decade of relative
political stability and economic growth.
But some businesses are struggling to
cash in, calling into question the arguments and data put forward by
cheerleaders of a new, rising Africa ready to rival Asia for
consumer-facing industries.
Nestle is cutting 15 percent of its
staff in several central African countries including Kenya and Angola,
citing stalling growth in the region’s middle class.
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