SOUTH AFRICA – Empowerment investment company Grand Parade Investments has acquired a stake in a burger patties company as a strategic move towards owning the entire Burger King supply chain.
The firm’s wholly owned subsidiary, Grand Foods, on Tuesday announced the acquisition of 65% of Excellent Meat Burger Plant for R37m.
Grand Foods was established two years ago to solely produce burger patties for Burger King in SA. It holds the master franchise agreement for Burger King in Southern Africa.
The firm’s Hassen Adams said burger patties previously had to be imported — not favourable for Burger King’s margins. “Since we started sourcing burger patties locally, our margins have improved and now 97% of Burger King is produced locally,” he said.
Grand Parade Investments was moving towards owning the entire production line of Excellent Meat Burger Plant, Mr Adams said, adding that the company could potentially export patties to Burger King markets in Russia and the Middle East.
An investment analyst at Kagiso Asset Management, Dirk van Vlaanderen, said Grand was strategically ensuring a reliable low-cost supply to SA.
Excellent Meat Burger Plant was operating at 15% of its existing capacity, so there was an opportunity to increase production as Burger King grew.