The group is SA's second largest chicken producer and also supplies McDonald's and KFC with hamburger buns — but not the chicken.
The group supplies buns, English muffins, kaiser rolls and other sandwich carriers to fast food outlets through East Balt.
Astral CEO Chris Schutte said the bakery was a significant investment that would employ at least 120 people; double that if the plant ran at full capacity.
The bakery would be ready to operate at the end of July and Schutte remained hopeful that at some stage the group would also be able to put its “own chicken in the bun”.
The poultry business will also be expanded and Schutte believes that it is in good shape.
The group has some presence in Zambia and Mozambique.
It is investigating going into Botswana, Namibia and Zimbabwe, which could be a hub for its African expansion.
But Schutte said there were challenges in going into other African countries.
He said all had some sort of barrier such as language, currency or infrastructure. However, Astral Foods had found Zambia to be a stable country at present.
Zambia's economy depends mostly on the price of copper, which is going up. “We will look closely at these businesses before taking a giant leap into those countries,” Schutte said.
“We will take a bit of a conservative approach on the foreign market until there is a clear view in the next year or two.”
Meanwhile, the industry finds that it has had to adapt to changes in consumer demand.
“In the past few months we have seen an increase in demand for smaller packaging and we have had to adapt to that,” Schutte said. “They still want the bird but in a smaller portion.”
The poultry business is benefiting from lower input costs.
Source: Business Day
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