IN a massive financial coup for the Coega Dairy, the company has signed a joint-venture partnership with restaurant franchise group Famous Brands aimed at eventually providing the entire group with cheese products for its franchise stores.
The partnership will create 49 jobs in the dairy's new cheese manufacturing company, as well as a further five jobs in the existing Coega Dairy business.
It is estimated that more than 1000 new indirect jobs could also be created in the supply chain, all in the rural Eastern Cape.
Famous Brands said it would benefit from the partnership by using mozzarella, cheese slices and cheese spread produced at the facility for supply at its Debonairs Pizza outlets initially, which will be the company's single biggest customer, with the intention to expand supply over time to the group's other brands.
The group has more than 1500 franchised restaurants in the country, including Steers, Wimpy and Mugg & Bean outlets.
Famous Brands chief executive Kevin Hedderwick said the partnership was a result of the group's strategy to expand its manufacturing capability and leverage opportunities in the supply chain.
"We have signalled to the market that our goal is to grow the back end of the business by enhancing our manufacturing capability and capacity, and this is another strategic step in that process," he said.
He said the partnership had significant earnings potential because the company currently obtained its cheese from external manufacturers.
"This will allow us to obtain it at a price which will be more favourable for the franchises. Equally importantly, it is an enterprise which will deliver tremendous benefits for those black farmers who partner with us via Coega Dairy," Hedderwick said.
He had learnt about the Coega Dairy by chance, when he was reading an article about it on a flight from Port Elizabeth to East London.
Hedderwick said the Famous Brands Cheese Manufacturing Company would use 38 million litres of milk during its first year and it anticipated to commence supply of mozzarella cheese to the Debonairs Pizza franchise from May next year.
The business's first-year annualised turnover is expected to be in the region of R180-million.
Coega Dairy chief executive Hennie Kleynhans said construction of the 2600m², R20-million cheese manufacturing facility was planned to start next month. Famous Brands would control 51% of the company's shares, while shareholders of Coega Dairy would hold the remaining 49%.
"Currently our farmers are producing between 84 and 90 million litres of milk a year, but through the Famous Brands partnership we will need to increase this by another 38 million litres.
"This will mean securing more milk from more farms who will need more farm workers. So a lot more jobs will be created," he said.
Kleynhans said the dairy – owned partly by local farmers – factory and farm employment had grown tremendously since operations started last year.
Hedderwick said the new cheese plant would have the latest technology, budgeted at R35-million.