In line with the group’s strategy to build supply chain capability and capacity, Famous Brands has acquired a state-of-the-art tomato paste manufacturing plant, Cape Concentrate, situated in the Coega precinct in the Eastern Cape.
Kevin Hedderwick, Famous Brands’ Group Strategic Advisor responsible for M&A activity, says: “This acquisition will enhance the Group’s capability to manufacture licensed products for our franchise network as well as provide security in respect of a significant menu item and manufacturing ingredient. We also plan to expand the customer-base for this product beyond our own internal customers, capitalising on the shortage of tomato paste which exists in the South African market.”
Illustrating the strategic potential of this business, Hedderwick notes, “The local industry is unable to supply growing demand for the product, and some 30 to 35 000 tons of tomato paste are imported by South Africa annually to meet the shortfall. Famous Brands itself currently imports in the order of 1 500 to 2 000 tons of tomato paste per year for use primarily in our Sauce and Spice plant, which manufactures sauce products for the group’s 2 600-strong restaurant network as well as for our retail (trade) customers.”
“In terms of supply, we are satisfied that we can expediently establish a local supplier network to provide the required raw material volumes. In addition, the plant and premises are in immaculate condition, so we have effectively acquired a turn-key facility — at a small percentage of its true value,” Hedderwick comments.