Spur secures rib supply though buy-in

The group's R36 million investment, which will assist the group in securing its rib supply, is structured in the form of equity and shareholder loans and will go towards the R120 million to build the 6000m² meat processing plant. It is scheduled to begin production by December this year with the capacity to process 700 metric tons a month and employ 50 people.

Spur Group CEO Pierre van Tonder says the advanced technology of the facility, coupled with the expertise of the other shareholders, who are industry experts and who will be responsible for day-to-day operations, will maximise efficiencies within the supply chain. It will also ensure that the highest standards of quality and food safety are observed.

"Our investment gives us access to a top-quality product at competitive pricing, benefitting our franchisees and, in turn, their customers."

He says that with ribs currently sourced from Europe, pricing is subject to global demand and exchange rate fluctuations. "The deal is expected to contribute to greater pricing stability for our franchisees, afford them consistent quality of supply and keep menu prices accessible for our customers."

The facility will be able to supply ribs to the 272 franchised restaurants in South Africa but export markets will also be explored. Initially, focus will be on rib processing, but the facility is also being designed to process other proteins, including chicken.

The venture will be managed as a standalone operation, with trading dictated by market forces. Customers will not be limited to the group's franchisees.