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Bidvest to launch Zambia catering business

Johannesburg - Bidvest will launch a catering business in Zambia this month, an executive said on Wednesday, the first step in an expansion drive across the continent to capitalise on a trend among the growing middle class to eat out.

Running a food business in the rest of Africa is uncharted territory for Africa's No.3 company by revenue, which makes the bulk of its sales from supplying food to pubs, restaurants and hotels in Europe, Asia and at home.

"It's a bit strange that over the years we have grown exponentially in Europe, Asia and now Chile with our food service business but never really gone into Africa," Lindsay Ralphs, the head of Bidvest's domestic unit, said in a telephone interview with Reuters.

"There's a lot of 'away from home' eating in Africa, though most of it doesn't take place in hotels and restaurants, but we can also supply to schools, prisons and hospitals."

Ralphs said Bidvest would open a food warehouse in Zambia to supply food to hospitals, prisons and hotels in Africa's biggest copper producer.

Ralphs said the facility in Zambia would be one of the first planned as the company positions itself for the flurry of new hotels springing up across the continent.

Bidvest, whose businesses include food distribution, auto dealerships and shipping, in August reported a 6% increase in full-year profit with diluted headline earnings per share totalling 1 552 cents.

Bidvest already makes about R5bn in sales from its unit in Namibia and a freight and shipping business in Mozambique and Ralphs said the aim was to grow at between 15 and 20% per annum.

He said the company was also looking to set up catering businesses several other countries such as Senegal, Ghana, Ivory Coast, Kenya and Tanzania. The expansion would be driven by acquisitions, setting up own facilities and joint ventures with domestic businesses, Ralphs said.

He declined to say how much Bidvest was spending on its expansion across the continent but said a warehouse and multi-temperature trucks to set up a catering business could cost R200m.

Even though African per-capita incomes are among the lowest in the world, a decade of robust economic growth and rapid population expansion have attracted the attention of retail and other service industry executives.

US-based Yum Brands is looking to double the number of its KFC restaurants in Africa to about 1 200 by 2014, underscoring a growing trend to eat out.

But domestic retailers, which are also targeting the rest of Africa for growth, have been slow in setting up shops due to a lack of shopping malls.


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