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Choppies to Open 40 More Stores in Africa

| International retailers

Choppies Enterprises, the Botswana-based budget retailer led by Indian-origin millionaire Ramachandran Ottapathu, is aiming to open 40 more stores in Africa in the next few months. The expansion plans are estimated to cost about 300 million pula ($29 million), Reuters reported.

Choppies, which already has units in seven countries, plans to enter Namibia before the end of this year before embarking on an expansion drive in South Africa, Kenya, Zambia and Tanzania, Ottapathu, the chief executive of the firm, told the news agency in an interview.

“We will enter Namibia for the first time before the year ends,” Ottapathu said. “After a few years of losses, we are now making profits in South Africa.” The company is operating below break-even in new markets, such as Tanzania, Kenya, Zambia and Mozambique. It is making profits in Botswana, South Africa and Zimbabwe — countries where it has been present for three years or more, Ottapathu told the Botswana-based Mmegi newspaper in an interview, adding that the new stores in the pipeline will come up in South Africa(13), Zambia(8), Kenya(4), Tanzania(3), Mozambique(3), Zimbabwe(2), Namibia(3).

Ottapathu, 52, holds a 19.5 percent stake in the company, which is valued at over $60 million. The Botswana-listed retailer has 217 stores in the continent. Ottapathu co-founded Choppies in 1986 as a single store named Wayside Supermarket at the Lobatse town of Botswana. The company has been expanding vigorously in the last couple of years. It acquired 21 retail stores in South Africa from Jwayelani Retail in March last year, and went on to acquire three more in Kenya from Ukwala Supermarkets in November.

Ottapathu has been criticized for paying high wages to employees in South Africa while cutting costs through low salaries to workers in Botswana, a charge he refutes by citing the difference in the cost of living in the two countries. “On wages, we have to understand that the cost of living is almost double in South Africa compared to Botswana,” he told Mmegi. “You have to look at the Purchasing Power Parity not just the exchange rate. The minimum wage in South Africa is R2,500 and here it’s around P700.”

Ottapathu is a Fellow of the Institute of Chartered Accountants of India and a Fellow of the Botswana Institute of Chartered Accountants. He is a qualified chartered accountant and holds a B.Com degree from the University of Calicut.

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