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McDonalds & Walmart to Invest in Nigeria

Category: Investors NewsBeat

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McDonalds & Walmart to Invest in Nigeria

march 22, 2005 17:20:48/BusinessDay


Increased competition and greater variety will soon open up in the Nigerian fast food industry as operators prepare for the expected entry of American fast food retail outlets within three years. McDonalds and other major fast food chains are said to be interested in making an entry into the fast growing fast food industry in Nigeria.

This indication was given by Chris Adedipe, Managing Director, Mr. Bigg\'s, while assessing the fast food industry in Nigeria in an exclusive interview with BUSINESSDAY.

According to Adedipe, McDonalds registered in Nigeria one month before UAC registered Kingsway Rendezvous. He said: \"I can see them and any of the other major operators coming in because the market is ripe.

\"Some of the major operators either from North America but more likely from South Africa will come in not with franchise operations but directly. They may come in partnership with major operators or they will come in directly on their own\".

He believes most of them will come in to carve out additional segments in the Nigerian fast food market which is primarily now concentrated on local foods and pastries. He identified a major area with no specialized major player yet as burgers. \"Burgers are not very strong in Nigeria at the moment, he said, \"Not because Nigerians do not want to eat burgers but no operator has really positioned as a major player in that market\"

\"The burger segment presents a good opportunity and possibly also the chicken segment, I think it will happen within the next two to three years. Everything depends on the Nigerian economy because a lot of people are watching and waiting. But the GSM operators have shown the rest of the world that you can make money in Nigeria and I do not see the fast food segment being any different.\"

He, however, disclosed that what may be keeping the major fast foods back from Nigeria is the absence of a food processing industry in the country. \"Beyond UAC Foods, UTC and Zartech, nobody is really doing this food processing and I think that is a major area that Nigerians can invest in. Once that is there, then the industry in this country will just take off,\" he stated.

He admitted that the Nigerian fast food industry has shown remarkable growth particularly in the past 20 years. He said, the industry has developed from the mobile vans to premises-based restaurants, adding that with globalization it would mature along the lines of what obtains in the developed world with operators specializing in areas such as ethnic meals, chicken and pastries segments.

He maintained that though there are companies operating with franchises, given the way the industry is growing, some of the major operators would come into the country.
Already, some major South African fast food outlets are operating in Nigeria under franchise while others have indicated interest in coming into the country directly.

Wal Mart, a major retail discount shop in America is also said to be interested in taking up shop in the country.

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