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Famous Brands bulking up to fight competition

Johannesburg - Fast-food chain firm Famous Brands [JSE:FBR] has bought a 75% stake in a local meat processing plant, it said on Monday, bulking up its supply chain to fight overseas competition.

Cater Chain has the capacity to produce 900 tonnes per month of beef, lamb, mutton, chicken, bacon and ham from its 15 900 m² facility in Johannesburg.

Famous Brands did not disclose the financial details of the deal.

South Africa is fertile ground for fast-food chains because of its expanding middle class and rapid urbanisation, but health authorities are concerned that chronic diseases linked to fatty foods are becoming more common.

Burger King and Yum! Brand's Pizza Hut have announced plans to expand further in a country that has been a safe bet for the likes of McDonald's.

Shares in Famous Brands jumped 5.9% to R114.39 by 11:41, outpacing a slightly lower JSE All-share index.

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