JAVA HOUSE CONSIDERS ENTRY INTO NIGERIA TO DOUBLE INVESTMENT IN DOMESTIC MARKET

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Java House, Kenya’s chain of coffee houses will double outlet numbers in the domestic market in the next two years before rolling out expansion into and out of East Africa, with plans to enter Nigeria.

In an interview with Reuters, the Chief Executive Paul Smith said the plans include a debut of 25 new restaurants in Uganda and a dozen in Rwanda over the next five years.

“For us, Java House is not an East African story. It is an international story. I’m pretty certain we’ll get there in the next couple of years,” said Abraaj’s East Africa managing director Ashish Patel.

Smith added that in Nigeria, it is mulling an entry either as a wholly foreign-owned enterprise or in a joint venture, and is looking at franchise opportunities in South Africa.

Java House was fully acquired by private equity firm Abraaj Group from Emerging Capital Partners (ECP) which had acquired a 90% stake from its founder in 2012.

Based on Reuters report, its sale by ECP last year drew attention to a strong private equity interest in East Africa’s consumer sector and that ECP reportedly received more than 10 bids for the coffee house.

It operates 65 outlets in Kenya, Uganda, and Rwanda and it also owns Planet Yoghurt brand, an outlet serving frozen yogurt, and a pizzeria outlet called 360 Degrees.

In the local market, it competes with global brands including KFC and Subway, as well as smaller foreign-owned local chains such as Artcaffe.

In 2014, its annual revenue was more than US$29 million and Java House expects this to rise to US$39.78 million next year.

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