VENTURES: Bunsai! Astral Shifts Into W Cape
Recent Western Cape Business News
POULTRY giant Astral Foods – one of the largest chicken producers in Southern Africa - has spent around R70 million to open a bakery in Bellville.
While there would appear to be adequate baking capacity in the region, Astral made the significant investment in the Western Cape after running into capacity constraints at its existing bakery facility up north in Pretoria.
Astral’s bakery interests are held through a recently clinched 50% owned venture with East Balt, an Illinois-based company. The fact that there are already production constraints – a mere two years since signing up with East Balt – suggests Astral might be onto a good thing with the bun business.
East Balt may not be a household name in SA, but the company is well known as a manufacturer of hamburger buns, muffins, sandwich carriers and other rolls for the fast food industry.
The Bellville based plant – which also holds cold storage and warehousing facilities – has the capacity for 36 000 buns an hour. Not only will it produce for the local market, but also for distribution in the Eastern Cape and KwaZulu-Natal.
Astral CEO Chris Schutte was quoted as saying the Western Cape expansion could employ up to 120 people – possibly double this number when production reaches full capacity.
Still, one has to wonder why a chicken giant is so keen on the baking segment, where trading margins surely can’t be fattened too much.
Well, here’s the rub: Astral has its bum in the butter (so to speak) in supplying two of SA’s fast food giants, McDonald’s and KFC, with buns.
Curiously, at this juncture, Astral is not supplying chicken to either outlet.
Now one has to imagine the spin-offs if Astral can get just its chicken on just some of those buns manufactured by East Balt – which we hear equates to around 15 million dozen units a year.
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