Tiger Brands plans $133 mln capex, sees tough H1

By Phakamisa Ndzamela

JOHANNESBURG (Reuters) - South African consumer goods firm Tiger Brands will spend over 1 billion rand in 2010 and is building a wheat mill to boost capacity by 25 percent and grow its bread business.

"We are investing in significant capital expenditure to continue to underpin that growth platform," Tiger Brands Chief Executive Officer Peter Matlare told Reuters.

"So for 2010 we looking at more than a billion rand worth of capital expenditure. This year it was close to 600 million rand in capex."

The group, which on Tuesday posted a 20 percent rise in full-year headline earnings per share from continuing operations, said it would spend 561 million rand on the new mill in South Africa's Free State province.

It said the rest of the capex would be used to build a new bakery and other small projects.

"We wanted to increase capacity in order to support our strategic desire of growing our bakery business," Tiger Brands Managing Executive Thabi Segoale added.

Segoale said the new mill, fitted with new technology, replaced an old mill that had been running for nearly half a century and would help the company cut costs and hopefully boost margins.

Tiger Brands, whose brands include Albany bread, Jungle Oats and Energade, said headline EPS jumped 20 percent to 1.38 rand, within its forecast growth range of 18-21 percent, lifted by strong performances in its domestic food division.