McDonald's Targets Emerging Markets With Restaurants in Africa, India

McDonald’s Corp., the largest restaurant chain, plans to open 100 more restaurants in South Africa and 120 in India over the next five years as the company seeks out further growth in emerging markets.

The Asia-Pacific, Middle East and Africa area contributes about 14 percent to the company’s operating income, compared with less than 8 percent five years ago, Tim Fenton, McDonald’s president for the region, said in an interview today.

China, which attained 1,000 McDonald’s restaurants faster than any other country outside of the U.S., according to Fenton, is the main focus for investment in the region. McDonald’s plans to have 2,000 outlets there by 2013, he said.

“It took us 19 years to get to a 1,000 restaurants in China,” Fenton said. “We will hit the second thousand in four years.” McDonald’s has the “critical mass” in China now for it to grow at 15 percent “new store growth” for the next four years, he said.

India and South Africa are two other countries that have achieved the necessary critical mass for the Oak Brook, Illinois-based company to take advantage of economies of scale, and supply chain to grow faster, Fenton said.

To contact the reporter on this story: Nicky Smith in Johannesburg at nsmith38@bloomberg.net

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