LOUISVILLE — Yum Brands is targeting Africa and other emerging global markets for expansion for its venerable KFC chain that has become a dominant fast-food player in China but has struggled in the United States.
Louisville-based Yum said Wednesday it expects to double the number of KFC restaurants in Africa to about 1,200 by 2014. The company projects KFC will grow into a nearly $2 billion brand in Africa within four years and contribute more than $100 million in profit to Yum's international division, which excludes China — which has its own division.
"Africa has tremendous opportunity," Yum chairman and CEO David C. Novak said during the company's investor-analyst conference in New York. "It's a great emerging continent, and we have a chance to really lead in that business."
KFC already is a leading brand in South Africa with more than 600 restaurants. The chain has a small presence in a few other African countries.
Never miss a local story.
The chain will expand with restaurant openings planned in such places as Nigeria, Ghana, Angola and Zambia. The company said it expects franchisees to invest about $500 million in Africa by 2014. By that year, Yum projects about 850 KFC units in South Africa and about 350 in other African countries.
Yum expects its Africa business to yield about $48 million in operating profit this year, and forecasts that amount will swell to $120 million by 2014.
KFC's international expansion comes as the chain has prospered in China, where it expects to open about 475 new units this year. That continues an aggressive expansion that has driven robust operating profit growth for Yum, coming at a time that sustained sales growth has been more elusive for KFC in the United States. The chain posted an 8 percent quarterly sales drop at U.S. restaurants open at least a year in the three months ending Sept. 4.