HOSPITALITY: Spur Consolidates Production In Cape
Recent Western Cape Business News
In reporting results to end December 2010, Spur CEO Pierre van Tonder said the company’s Johannesburg manufacturing operations had been consolidated into one facility in Cape Town.
The move is not entirely surprising since Spur had hinted at consolidating its production facilities in an investor presentation last year.
The closing of the Gauteng facilities suggests Spur has confidence in its distribution/logistics chain (managed, CBN believes, by Vector Logistics) with a large chunk of Spur’s franchisees operating in Gauteng and the northern provinces.
While the consolidation of manufacturing operations into a centralised segment in Cape Town was probably done with increased cost efficiencies in mind, Spur was also fortunate to bank almost R17 million from selling the building that housed the Johannesburg-based facilities in Midrand.
In a further commitment to the Cape, Spur acquired a building for R10m to house the group’s decor production in Cape Town.
While most observers reckon Spur earns the majority of its profits from franchise fees, the truth is that the company actually earns a fair whack from manufacturing operations (which include sauces etc).
The interim results to end December showed manufacturing and distribution revenue was 14.4% higher at R55 million.
On the franchise front the Cape has also benefited from expansion efforts that have seen the Spur outlet base grow to 367 outlets.
Van Tonder said the expansion of the Spur chain locally included the opening of the smaller format restaurants in Wellington and Bredasdorp.
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