By Serena Chaudhry
JOHANNESBURG (Reuters) - South Africa's power crisis is affecting the economy and fuelling costs for the country's biggest casino operator Sun International, a senior executive said on Thursday.
Chief Executive David Coutts-Trotter told Reuters that while the company has invested in generators for its resorts and casinos, the indirect effects of the electricity shortage were damaging its business.
"We're being affected because I think the economy as a whole is being affected ... Indirectly I think our customers are being affected negatively, and that's affecting our business," he said in a telephone interview.
But he said Sun was coping with the power cuts and had invested in generators and upgrading systems. "We're not too bad ... we're okay, we can keep going."
He said the company had committed between 3 million rand and 4 million on generators, but expects spending to increase. "There are areas where we're going to have to spend quite a lot ... We can spend 5, 6, 7 million rand at one property," he said.
Sun has 13 casinos and four resorts in South Africa.
Africa's biggest economy has been struggling with a power shortage which forced mines to shut for five days in January. Mines are now operating at 95 percent of their usual power supply.
Sun International, which runs South Africa's popular Sun City casino and hotel resort, also operates hotels and casinos across southern Africa and is expanding into other parts of Africa and South America.
Buoyed by increasing political stability and economic growth, Sun has acquired a 49 percent interest in Nigeria's Federal Palace Hotel property on Victoria Island.
"The main thing we're working on is Nigeria," Coutts-Trotter said. "The size of the market and the potential of the country ... we think it's a fairly unique and good opportunity."
The group, which controls the Lagos property's operating management, is upgrading the two hotels and is adding a casino, conference centre and restaurants.
Coutts-Trotter said the total capital spend, initially estimated at $120 million, may be higher. The first hotel will open in June.
But Coutts-Trotter said the company is no longer looking to expand into Russia. It was locked out of the country's lucrative casino market last year when a new gambling law excluded casinos from major urban areas.
