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ACHIEVING BUSINESS EXCELLENCE ONLINE

Food&Drink

ISSUE 2 | www.bus-ex.com

bottling

a brand

Coca-Cola Bottling Egypt forms part of the powerhouse behind the global brand

nestlĂŠ china:

Health and happiness

namibia breweries:

Simply a better brew

taste holdings: A matter of taste

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Martin Ashcroft Editor In Chief mashcroft@bus-ex.com Will Daynes editor wdaynes@bus-ex.com

DESIGN

Matt Johnson Art Director mjohnson@bus-ex.com Louise Culling Production Designer lculling@bus-ex.com

BUSINESS

Richard Turner Director of sales rturner@bus-ex.com Vince Kielty Director of Editorial Research vkielty@bus-ex.com Sharon Rooke Administration & Operations srooke@bus-ex.com Matt Day Head of technology mday@bus-ex.com Andy Turner Chief Executive aturner@bus-ex.com

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Feeding the world

B

usiness Excellence is a magazine with a broad reach, as demonstrated by this special edition for the Food & Drink sector.

Like anywhere else in the world, the Middle East is thirsty for Coca-Cola products; and Coca-Cola Bottling Egypt (CCBE) is the largest soft drinks bottler in the region with eight manufacturing plants and 27 strategically located distribution centres. Also in this issue is Century Bottling Company (CBC), winner of the Employer of the Year Award 2011 in Uganda.

On the food side we look at growth and vertical integration through the poultry operations of Akate Farms in Ghana and South Africa’s Astral Foods. Tea and coffee are represented by Sasini in Kenya, sugar by TPC of Tanzania, while franchise management group Taste Holdings gives us a flavour of food retail in South Africa.

Further afield we examine the successful approach taken by Nestlé Greater China in managing the opportunities provided by the world’s largest population of consumers.

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M.Ashcroft Martin Ashcroft Editor-in-chief mashcroft@bus-ex.com

Be food & drink | 3

food & Drink

6 Coca-Cola Bottling Egypt Bottling a brand

The Coca-Cola Company’s 300 worldwide bottling partners are the powerhouse behind its famous name.

6

14 Century Bottling Co Training to gain

Century Bottling Co invests heavily in personnel training and development and has seen the results in improved productivity and staff morale.

24 Sasini

Anyone for coffee?

A Kenyan tea and coffee producer growing by diversification into retail, and is cutting costs by generating its own electricity.

14

44

34 UAC Foods

Food for thought

UAC Foods is putting in place a firm strategy for creating a world class manufacturing, sales and marketing business in Nigeria.

44 Akate Farms Feeding Ghana

The expression ‘chicken feed’ normally implies something insignificant, but this is far from the truth when half a million chickens are involved.

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contents

52 Astral Foods Ltd

Nature plus nurture makes nutrition

South Africa’s leading integrated poultry producer is going from strength to strength.

64 Nestlé Greater China

Feeding health and happiness in China

Finding its philosophy of shared value and localisation appreciated in the world’s fastest changing society.

64

74 Taste Holdings A matter of taste

Taste Holdings has developed a number of efficient and customer-focused brands.

86 Kenya Meat Commission A prime cut

74

94

A producer of top quality products that is determined to resume its leading position in East Africa.

94 Namibia Breweries Ltd Simply a better brew

This brewer is setting the standard with a range of ground-breaking environmental initiatives.

102 TPC Limited

Sweet agent of change

Tanzania’s sugar industry has the unique potential to support East Africa’s development goals.

be food & drink | 5

written by: Becky done research by: Lucy Bendall

The Coca-Cola Company’s 300 worl bottling partners are the powerhous the global brand, as discovered in dis with Coca-Cola Bottling Egypt

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Coca-ColaBottling Egypt

ldwide se behind scussion

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Coca-Cola Bottling Egypt

T

here can be very few people left in the world who are unfamiliar with Coca-Cola. From its almost casual creation in 1886, the company’s iconic red scripted logo is now famous all over the globe, thanks to the power of its immense brand presence. Coca-Cola beverages sell in over 200 countries under a vast umbrella of more than 500 brands, so no matter the time of year or occasion, your location or lifestyle, it’s likely you’ll recognise Coca-Cola as a household name.

However it could be said that the brand itself is just one part of the picture. Most consumers opening a bottle of, say, Sprite, probably wouldn’t give much thought to its back-story, but it is Coca-Cola’s 300 bottling partners worldwide who largely drive the company’s ultimate success, transforming the beverage from its base form into the final product.

The Coca-Cola Company manufactures and sells its concentrates, beverage bases and syrups to bottling operations, owns the brands and is responsible for consumer brand marketing initiatives. It then hands over the baton to its bottling partners, who manufacture, package, merchandise and distribute the final branded beverages to customers and vending partners, who sell the final products to the consumer—at a rate of 1.7 billion servings a day. All bottling partners work closely with

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customers; that is, virtually anywhere that might sell a soft drink, from supermarkets, sporting venues and restaurants to cinemas, music venues and theme parks. The Coca-Cola Company and its bottling partners form what is termed The Coca-Cola System: and this alone is acknowledgment that the bottling companies play no small part in the global success of the Coca-Cola brand.

We produce an extensive range of returnable and non-returnable glass containers; both green and flint in colour. 90% of the current production is to leading international food and Beverage companies based in Europe and MENA. Contact: Youness Moussallak | Sales & Marketing Manager 12, Almokaiam Daem St.6 industrial Zone - Nasr city - Cairo, Egypt

Tel: 202-22624303 | Fax: 202-22624302 Email: younessm@meg.com.eg

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Like anywhere else in the world, the Middle East is thirsty for Coca-Cola products; and Coca-Cola Bottling Egypt (CCBE) is the largest soft drinks bottler in the region. A joint venture between the CocaCola Company and the MAC Beverages Group, the company employs 11,500 people across eight manufacturing plants and 27 strategically located distribution centres throughout Egypt. The company bottles Coca-Cola, Sprite, Fanta and DASANI (a premium natural water), in addition to Schweppes and Schweppes Gold (a nonalcoholic malt beverage).

“Our passion to meet consumer needs is reflected in our uncompromising commitment to total quality for our brands,” states CCBE’s president and chief operating officer, Salam El Hammamy. “We are pleased to say that we have recently launched our latest innovative product, Cappy Juice with fruit pieces. Our vision is to be the number one beverage company in Africa and the Middle East.”

CCBE bottles and packages the carbonated and non-carbonated beverages that make up its portfolio before distributing them to the Egyptian market, either via its direct distribution fleet or a third party (indirect sales distribution). “The synergy of operations along the supply chain is one of our major keys to success, as all the pillars in the system achieve harmonious dynamics,” says El Hammamy. “The operation umbrella includes utilization and effective performance, in addition to the technical support function that gives assistance to production and maintenance in terms of logistical and production planning,

Coca-Cola Bottling Egypt

spare parts assessments and availability. It also includes attentive quality control on products and packaging, with a strict quality assurance system.”

The Coca-Cola Company itself focuses effort on protecting and preserving the planet, which encompasses areas such as water, energy use, packaging and emissions—and it encourages its bottling partners to do the same. In line with this, all of CCBE’s new machinery and equipment is environmentally friendly, and is operated

in accordance with high safety standards.

One of the company’s mega plants has been awarded Best Performing Plant 2010 for Environmental Management within the Eurasia and Africa arm of the group. This was achieved in part by a mediumterm plan set up in 2005 to replace all old lines and under-utilized assets, which saw almost 75 per cent of old lines

“All internal training programmes are conducted in our Coca-Cola Academy” Be food & drink | 11

and old machinery replaced with brand new equipment.

“We do strive to have the latest production lines and equipment installed in our plant,” confirms El Hammamy.

“Our Upper Egypt plant, inaugurated in 2009, is state-of-the-art among all CocaCola plants in the Middle East region. Our main equipment suppliers are European

companies—predominantly German— which are ranked very highly worldwide within the beverage sector, and they supply us with the latest technology and updates on all of our equipment.” Suppliers provide anything from machinery and plant equipment to logistics, glass, labels and glue.

Of course, highly skilled operatives are always needed to drive maximum return on investment from the latest equipment.

“Generally, we don’t have trouble finding skilled labour at most organizational levels, especially as most of our vacancies are filled through internal hiring or through sourcing and interviewing carried out by our designated HR staff. We don’t tend to refer to external recruitment agencies or head hunters,” comments El Hammamy.

However, he admits that a consistent challenge facing CCBE’s hiring managers is the sourcing of front-line sales executives— sales representatives and sales drivers—due to very high local market demand as well as the fact that Egypt is considered an attractive candidate pool for Gulf hiring managers targeting such positions.

“Another challenge that we share along with many companies operating in Egypt is the shortage of Rexam female talent at executive Rexam is a leading global consumer packaging company.

We work with some of the world’s most famous and level, which is one of the successful consumer brands, as well as young, development priorities that entrepreneurial start-ups. And we don’t just stop at making CCBE is currently working our products—our local teams are dedicated to working to address.” with our customers, supporting their brands through the CCBE is proud of its entire manufacturing and supply chain process. diversified portfolio of www.rexam.com training and development

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Coca-Cola Bottling Egypt programmes. “Due to the unique nature of our company and the beverage industry, this portfolio consists of a lot of internal training programmes that are carefully designed by our senior managers with the support of our Capability Building team, and delivered by certified internal trainers from within CCBE. And all internal training programmes are conducted in our CocaCola Academy,” explains El Hammamy.

That said, the company is always seeking to enrich its people development programmes with additional content from other areas within The Coca-Cola System as well as via collaboration with a number of local and international

well-known and highly-regarded training and development providers.

For now, CCBE is targeting steady growth, and is focusing on expanding its sustainability projects across all plants and distribution centres. “Our company is committed to its corporate social responsibility programme, with values that are directed to serve and benefit the wider community in Egypt.

These principles are embedded in our dayto-day business,” he concludes.

For more information about Coca Cola Bottling Egypt visit: www.cocacolaegypt.com

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Century Bottling Co

Training

to gain Century Bottling Co invests heavily in personnel training and development and has been rewarded with the Employer of the Year Award by the Federation of Uganda Employers, as well as improved productivity and staff morale written by: Ruari McCallion research by: James Boyle

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CBC’s managing director and the minister of Education and Sports lay a stabilised soil block for a tank at Misindye Primary School

Century Bottling Co

C

entury Bottling Company (CBC), headqu a r tered in Kampala, Uganda, is understandably proud to have received an Employer of the Year Award 2011. CBC won the award from the Federation of Uganda Employers ahead of stiff competition from all the top organisations in the country, from banking, manufacturing, telecommunications and other production and service sectors.

“We won the Gold Award for Excellence in Human Resources,” says Moses Mbubi, CBC’s country HR manager.

“The particular citation was for ‘Talent Management to Maximise Productivity’.”

The examining committee reviewed the company’s total development process, from the management of the newest recruits up to senior executive level.

“Our managing director has to review our talent management strategy himself.

For each employee, we identify skills and development requirements that are flexible, core and critical,” Mbubi explains.

“Individuals receive different support, depending on their needs.” The company guards against its talent pool becoming exhausted by aiming to always have two people ready to replace any role, from middle management upwards. Employee motivation strategies include profit share, as well as career development. CBC recruits new people as they leave full-time education, at around 22 years of age, so even new arrivals working on the line will have a mechanical engineering diploma.

“Our investment in in-service training and

Be food & drink | 17

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Century Bottling Co development covers both NICE House of Plastics technical and managerial NICE House of Plastics is the oldest plastics manufacturing skills,” he continues. “We company in Uganda. Incorporated in 1971 under the name spend 0.4 per cent of net Ship Toothbrush Factory Limited, the company started out sales revenues on training; as a manufacturer of toothbrushes. that now amounts to over NICE endeavours to adhere to a customer centric US$500,000 a year. The philosophy that puts the customer first and delivers value for money. Today, the company is a market leader in more product we sell, the many of its product lines, including pens, toothbrushes, more resources will be packaging and various household products. available.” Training people Nice House of Plastics is proud to have been in partnership to a high level will inevitably with Century Bottling Company for the last 20 years as mean that they become the sole producer of its re-usable packaging (crates). We attractive to competitors therefore congratulate Century Bottling Company on its and other employers, but achievement. www.nice.co.ug CBC has strategies in place to retain its key staff.

“Our Talent Development Committee classifies talent, accounting for critical skills, core labour, flexible labour, and so on,” Mbubi explains. “People with critical skills are those we really want to keep. We hire five or six people for our graduate programme, every other year, who we expect to develop and grow into supervisory and managerial roles over four or five years.”

The value of the strategy becomes apparent as soon as CBC’s figures are considered. The company was established in 1986 and was acquired by South Africa-based

26 million Unit cases sold by CBC, 2011

Guests share a light moment at the launch of the Coca-Cola and UN Habitat RAIN (WASH) project for eight schools in Uganda

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Coca-Cola Sabco in 1995. That year, it sold three million unit cases, each containing 5.678 litres (1.5 US gallons) of product; in 2011, sales reached 26 million unit cases.

“Sales have grown strongly over the past five years, at between five and 10 per cent,” says Norton Kingwill, who has been with Coca-Cola Sabco for over 20 years and was appointed managing director and country manager of CBC within the last year. “We have two bottling plants in Uganda, in Kampala and Mbarara. We have around 700 permanent employees and we flex our personnel up to around 1,000 to meet peak demand, in the festive season in December.” He reports that growth has been driven by a number of factors, including Uganda’s growing population and economy, improved market penetration and CBC’s move into products beyond its core brands of Coke, Fanta and Sprite.

“We have been able to encourage people to drink more carbonated beverages but we have also moved into 100 per cent juices and ‘designer’ waters,” Kingwill says. Altogether, the company has around 30 SKUs. Growth required investment in increased capacity, which has come in the form of both new plant and business improvement. “We built two new ‘greenfield’ plants and increased

our production capacity and, two years ago, we opened a new Krones PET bottle line.

Previously, our entire product was sold in returnable glass.”

A second PET line will be commissioned in October 2012, increasing manufacturing capacity by 80 per cent. The switch to PET has been primarily driven by consumers’ desire for convenience. Energy advantages

“We have been able to encourage people to drink more carbonated beverages but we have also moved into 100 per cent juices and ‘designer’ waters” 20 | Be food & drink

Century Bottling Co

Boreholes being handed over to the community

in production are not clear, the collection efforts enable Uganda’s poorest although the disposable citizens to generate an bottles obviously save income for themselves, expenditure on washing by collecting PET bottles and cleaning. But PET is not Permanent CBC in their neighbourhoods without challenges; plastic employees and further afield and bottles are sometimes selling them into the referred to as the ‘bloom of Africa’. Uganda as a recycling industry. country and CBC as a company are at the “Our two collection centres have forefront of efforts to increase recovery weighing scales and provide collectors and recycling of used PET bottles. with protective gear, such as gumboots and “We were the first company to set up gloves, and with bicycles for transport,” she collection centres for PET bottles,” says explains. The importance of this initiative Maureen Kyomuhendo, head of public cannot be over-emphasised; income from affairs and communications. As well plastic collection can make the difference as being environmentally responsible, between starving and eating properly. The

700

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Some of the new bicycles handed over to a new PET collection centre to ease transportation of PET

Century Bottling Co project is about empowerment, as well as environmental responsibility.

CBC is driving to become ‘waterneutral’, through the recycling of ‘grey’ water, reduction in water usage, and replenishment programmes in the community. The Coca-Cola System has contributed US$30 million to R AIN (Replenish Africa Initiative) in Africa; in Kampala, the direct impact is to improve access to fresh water for 15,000 urban poor, through installing 145 pre-paid meters and piping. The company is working with eight schools in the country under RAIN 2, to promote water, sanitation and hygiene (WASH), and together with USAID, CCF and COOPI, constructed boreholes and solar powered water pumps worth US$500,000 to enable 30,000 Ugandans to return to their homes after the civil war in three districts of Dokolo, Lira and Amuria.

The company is also involved in health initiatives such as HIV/Aids prevention, and the Nets for Life anti-malaria initiative in partnership with Standard Chartered Bank and the Church Of Uganda. For Century Bottling Company, corporate social responsibility is not just a paragraph in the annual report—it is a way of life, one that, along with its employee development strategies, wins increased business, as well as awards.

For more information about Century Bottling Co visit: www.cocacolasabco.com

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Anyone for coffee?

This Kenyan tea and coffee producer has paved the way to growth with diversification into retail and is cutting costs by generating its own electricity written by: Alan Swaby research by: Paul Bradley

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Sasini

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Sasini is one of Kenya’s leading producers of coffee and tea

Sasini

J

ust look at the international growth of chains such as Starbucks and it seems that coffee has entered a truly golden era. In the 12 months to September 2011, world coffee exports increased by 9.4 percent to a historical record of 103 million bags – or over 6 million tonnes!

Two thirds of this comes from South America, which means that the contribution from Africa in general and Kenya in particular is in the minority. Nevertheless, it must be a worry for the Kenyan economy that while demand is booming, Kenya’s coffee industry is not capitalising to the full extent.

For some years now, the trend in production has been heading south. In the period in question, output fell a massive 30 percent to just 19,600 tonnes. At the root of the matter are depressed prices. Last year saw something of an improvement with average prices of US$6.61/kg compared to $3.91/kg for the year before, but add low prices to erratic climatic conditions and the end result is that small growers are abandoning the crop at an alarming rate.

Compared to an all-time high of 170,000 hectares under cultivation, the figure now stands at 150,000 ha.

Within this overall gloomy picture, though, there is at least one bright spot.

Sasini is one of Kenya’s leading producers of coffee and tea. In fact, through a network of subsidiary companies, Sasini has also developed markets in dairy livestock, horticulture and tourism, generating revenues of over KSh2.6 billion. From its headquarters in Nairobi, it controls

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Sasini

Coffee harvest

“Through a network of subsidiary companies, Sasini has also developed markets in dairy livestock, horticulture and tourism” operations in all parts of the country and is an important contributor to the economy through the 5000 direct and indirect employees it engages.

In fact, Sasini is one of the elder ‘statesmen’ of the Kenyan economy and is certainly one of the longest standing companies on the Nairobi stock exchange.

The business started in 1952 while Kenya was still a British colony. Queen Elizabeth was actually in Kenya when she learnt she had become queen on the death of her father.

From the original one farm, the operation

grew rapidly and by 1960, it had gone public.

Currently Sasini is focused on adding value to the various divisions of the business, implementing systems that improve the quality, quantity and value of products for the future. For example, once the coffee beans are harvested they pass through Sasini’s own mill – generally considered to be one of the most modern and productive in the country.

In order to create a sustainable business and cut down on energy consumption, Sasini is taking electricity generation into

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Sasini its own hands. Last year, the company successfully Barclays is a major global financial services provider applied for funding from the engaged in retail banking, credit cards, corporate Energy and Environment banking, investment banking and wealth management Partnership Programme with an extensive international presence in Europe, the for the development of Americas, Africa and Asia. With over 300 years of history a micro-hydro power and expertise in banking, Barclays operates in over 50 countries and employs 147,500 people. generation project. It also With a clear focus on quality relationships, Barclays plans to convert the coffee provides integrated banking solutions to businesses, large husks into briquettes that local companies, financial institutions and multinationals. can then be burnt to feed We facilitate the success and growth of our clients by thermal generation. The providing lending, risk management, cash and liquidity programme is funded by management, trade finance and asset and sales financing. the governments of Finland www.barclays.com and Austria through the Development Bank of South Africa and has the primary aim of helping to eradicate poverty through ecologically sustainable development projects.

While the West is in love with coffee, the drink of choice in the East is tea. Demand has pushed prices up through the past five economically depressed years and there has been a steady rise in global production that has so far failed to outstrip demand to the point where last year an estimated four billion kilogrammes of tea were produced.

The prospects for farmers seem bright.

The steady urbanisation of China (in particular) is reducing the amount of land

Barclays

5,000 Direct and indirect employees of Sasini Sacks of coffee beans

Be food & drink | 31

under cultivation in Asia and opening more opportunities for other countries to take up the slack. Having said that, erratic weather patterns are not helping and overall tea production in Kenya is expected to be down thanks to the lack of rain in the early part of the year.

Sasini’s tea operations are conducted through the Kipkebe subsidiary which controls two large tea factories with a combined capacity of 8.5 million kgs of CTC tea annually. Two thirds of this comes

from Sasini’s own farms while the balance is bought from independent growers.

Sasini’s tea is grown in estates located west of the Rift Valley, in the Nyanza Province where climatic conditions are at their best.

The estates are at an average altitude of 6000m above sea level and fall between the equator and 10° S latitude. Average annual rainfall is in the region of 1600mm, ideally spread over virtually the whole year.

Having established the right conditions and infrastructure needed for its agricultural

“Sasini has created a retail division to manage the marketing of its tea and coffee on the local scene”

Two-thirds of Sasini’s tea comes from its own farms

32 | Be food & drink

Sasini

Coffee beans are processed in Sasini’s own mill

endeavours, Sasini has turned its attention to growth through finished products. Rather than simply providing a commodity product subject to the whims of an international market, it has created a retail division to manage the marketing of its tea and coffee on the local scene.

Sasini has made an initial investment of KSh100 million to be spent on value addition. It has developed a range of tea and coffee brands with varying prices with the aim of having something to suit all tastes and budgets. Periodically, new brands are launched to keep the range fresh and in line with market demands.

Sasini has even entered the service end of the retail spectrum. It’s no stranger to the hospitality industry as it has an interest in

some of Kenya’s leading tourist destinations.

Now it has added and expanded the Savannah Lifestyle coffee lounges to its portfolio with seven outlets strategically located to serve both visitors to some of Nairobi’s attractions and members of the indigenous managerial classes working in some of the city’s most illustrious buildings.

Activities such as these are seen by the directors of Sasini as the way for all developing countries to go, to create wealth within their own borders rather than simply exporting raw commodities.

For more information about Sasini visit: www.sasini.co.ke

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34 | Be food & drink

UAC Foods

Food for thought Dr Tawanda Mushuku, managing director of UAC Foods, is putting in place a firm strategy for creating a world class manufacturing, sales and marketing business in Nigeria written by: Gay Sutton research by: Paul Bradley

Be food & drink | 35

P

roviding the most densely populated country in Africa with an exciting, appetising and nourishing array of snack foods, ice creams and beverages is the work of UAC Foods, which can trace its roots back to the United African Company, established in 1874 before Nigeria emerged as a nation. It is a large company employing over 1,000 people and produces brands that are household names the length and breadth of Nigeria, including Snaps, Funtime, Gala, Supreme and Swan.

UAC Foods carries forward the acronym of the original company, yet it is an exciting new joint venture formed in January 2011 between UAC of Nigeria and Tiger Brands of South Africa, its shareholding split 51 per cent and 49 per cent respectively. The vision behind the joint venture is to bring together the strong product portfolio, manufacturing and marketing capacity of UAC Nigeria and combine it with the technical and business expertise of Tiger Brands, to create a vigorous new company capable of moving forward to world class status and supporting the unprecedented growth and change in the marketplace.

The Nigerian economy has been growing on average by nearly seven per cent per annum from 2005 to 2012 and its population by some 2.5 per cent year-on-year. As part of the joint venture agreement, Dr Tawanda Mushuku was seconded from Tiger Brands to head up the new company as its managing director. “We didn’t come into Nigeria for what it is, we came into it for what it could be,” he says. “We have strong brands here

36 | Be food & drink

The company manufactures baked maize snacks

UAC Foods

A leading supplier of PET preforms in West Africa We pride ourselves not only on product quality, but also on the technical support we provide for our customers. This includes : • Bottle design • Lightweighting of preforms • Introduction of different neck finishes • Development of new preforms for specialised applications BevPak also supplies multilayer preforms, “One Stop Bakery & Catering Foodsoft forShop” shelfforlife extension of Equipment, carbonated Processing Equipment and Hygiene Equipment drinks, beer, fruit juice, sauces, etc. In fact, any product which is sensitive to gas loss or gas entry into the bottle benefits substantially from this technology.

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UAC Foods in Nigeria, into which we BevPak (Nigeria) Limited will bring innovation and BevPak (Nigeria) Limited was established in 2008, and renovation. Our vision is to has rapidly become recognised as a leading supplier of PET grow this business to even preforms in West Africa and beyond. greater heights.”

BevPak specialises in advanced technology and superior The strategy for achieving technical support. Its multilayer technology facilitates this vision has three PET’s use in non-traditional PET applications such as beer.

Bevpak offers a range of technical support services for major elements: bringing customers with difficult applications. in technical expertise as www.bevpaknigeria.com a foundation for business improvement; leveraging the partnership with Tiger Brands to make use of its knowledge, experience and existing brands; and finally to create a strong skills base through extensive training.

These changes are already well underway.

Mushuku is using a standard Tiger Brands approach to improvement which the company uses when entering into a new market. “We give this the acronym FOG, which is around fixing what we find, optimising it and then growing the business,” he explains. Although this is a long term process, progress has already been achieved across all elements of the business.

The three product lines—snacks, beverages and ice cream—are manufactured in Nigeria in three well established manufacturing facilities. Since taking over, Mushuku has begun to improve efficiency Soft drinks form part of the product range

“We have been sending our staff for training in South Africa, and we are also bringing some of the trainers to us in Nigeria” Be food & drink | 39

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Fruithill Foods delivers quality services in maintenance, importation and installation of catering, food processing, packaging and preservation equipment.

Fruithill Foods is the sole representative of fatosa meat processing machines in Nigeria.

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www.fruithillfood.com

40 | Be food & drink

and reliability by implementing standard maintenance procedures: bringing in the original equipment manufacturers for scheduled maintenance. In parallel with this, old and obsolete equipment is being progressively replaced. A number of activity tools are also being implemented on the shop floor to increase productivity. “We are looking at process optimisation, installing automation where it actually makes sense, and right-sizing the operation.�

All of this centres on establishing best practice across all disciplines of the organisation, from manufacturing and supply chain through to sales, marketing and administration. From the very beginning, Mushuku introduced new recruitment practices and a clear training strategy that

UAC Foods

The company manufactures high-quality ice cream

takes advantage of the strong link with Tiger Brands. “We have training programmes running in Tiger Brands South Africa across various disciplines, so we have been sending our staff for training in South Africa, and we are also bringing some of the trainers to us in Nigeria,” he explains. “At the moment we are establishing the basics and putting in place all the procedures, processes and standards that we need.”

The supply chain and distribution arms of the company are also set to benefit from synergies with Tiger Brands. From the procurement perspective, the company is currently looking at global sourcing opportunities through contacts in South Africa. It is bringing in the necessary knowledge and expertise from Tiger Brands to help improve distribution in Nigeria, particularly for frozen products. “We have

“Understanding what drives the business environment is critical if we are to accurately define our product portfolio” Be food & drink | 41

Manufacturing equipment

42 | Be food & drink

UAC Foods

“We believe the future is going to be from formalised retail outlets, so we will be working closely with them” also been playing with a number of options for logistics. Most of the infrastructure in Nigeria is quite poor, so running our own fleet of trucks creates challenges, particularly around security. Most of our transport is currently outsourced. And we are thinking that our future will also be in outsourcing that aspect of the business.”

From the sales and marketing perspective, the last 18 months has also been a period of significant change. “We have established a robust innovation agenda which is underpinned by clear segmentation models that we have introduced as a toolkit in marketing,” he explains. The company has launched a ‘brand health check’: a marketing and customer care questionnaire that is used as standard within Tiger Brands. It tracks the health of the brand by establishing customer needs, the extent to which the existing brands satisfy those needs, and then examines changing consumption patterns and requirements. “Understanding what drives the business environment is critical if we are to accurately define our product portfolio,” he says. “So the principle behind this is that we focus on channel development and brand availability for a selective channel.”

The company is also working closely with one of South Africa’s biggest retail chains,

ShopRite, which is currently investing in expanding its footprint in Nigeria. “We believe the future is going to be from formalised retail outlets, so we will be working closely with them to make our products available to their outlets.”

Looking further into the future, Tiger Brands has an extensive portfolio of products in South Africa that may become relevant to the Nigerian market and can be introduced if appropriate. “If we can build critical mass, we will then look to introduce production into this country to complement our current portfolio here,” Mushuku says.

The UAC Foods joint venture looks set to bring tremendous benefits to UAC Nigeria in terms of technical and business expertise which can be shared across the group, while for Tiger Brands it creates a smooth and relatively risk-free route for entering this rapidly expanding marketplace. “This is a huge market,” Mushuku concludes, “and most of the growth here will be organic. So it’s all about achieving economies of scale. This will be a volume driven business.”

For more information about UAC Foods visit: www.uacnplc.com

Be food & drink | 43

Feeding

Ghana The expression ‘chicken feed’ normally implies something cheap and insignificant, but this is far from the truth when half a million chickens are involved written by: alan swaby research by: Paul Bradley

44 | Be food & drink

Akate Farms

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Akate Farms

I

t’s hard to imagine that frozen chickens chickens back in 1987. His first attempt from Brazil or China can be sent ended badly and he had his fingers burned, halfway around the world and sold at a but without a credible alternative at his price which undercuts local producers disposal, Akate felt he had no other option in equally low labour cost areas in but to try again. “I am from a simple Africa. Nevertheless, it happens, and many farming background,” he says. “When my chicken farmers in Ghana are up in arms, father died I was in class two at school complaining bitterly that the government but as the oldest I had to leave without an promises much but delivers little in the way education and take on the responsibility of of help. There are calls for import duty to helping to feed the family.” be levied on frozen chicken but these have Eventually, when older, Akate moved been resisted, apparently under pressure from his rural homeland in the upper northfrom the International Monetary Fund. west of the country, and headed south to But rather than looking for the country’s second largest some form of protectionism, city—Kumasi—in search of Alhaji Abdul Salam Akate— better prospects. Naturally founder and CEO of Akate enough, for someone without Farms, one of the country’s formal education, he found largest chicken producers— only labouring work and Number of cows consequently felt the only feels that a better deal at Akate Farms way out of that particular from banks and financial situation was to build his institutions would enable local producers to redress the balance own business. As already mentioned, the without government intervention. first stab didn’t work but with the invaluable “This is the area where the government help of a couple of friends, Akate finally needs to act,” he says. “Ghana has the made a successful second start from which potential to be self-sufficient but it is the business has never looked back. depressing that after more than 50 years “The problem I encountered the first time of independence, we are still plagued by around,” he explains, “was the high cost of problems of food security. Small Ghanaian buying feed and the difference the second businesses can solve the problem but they time around is that I knew how to make the can’t get access to the capital they need. My feed myself. Margins are small and profit farms have a successful track record and are comes from the rapid turnover we get from comparatively large operations, yet we still chicken production. Having to buy readyhave to fight hard to get loans from banks made feed meant there was nothing left to under acceptable terms.” build up profits.”

Capital has been the bane of Akate’s Driven by a desire to succeed, Akate life since he first tried his hand at rearing sold his car and through a friendship with

160

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Akate Farms a Canadian missionary, started again with credit of 800 broilers and 1,500 layers which he was able to pay for once cash began to flow. Today, the farm has half a million chickens plus a few turkeys, guinea fowl and ducks, not forgetting 160 cows, 300 sheep and a fish farm.

These days, the business relies on no-one and is selfsufficient throughout all its stages. Not only does the Akate hatchery provide dayold chicks for his own production but it also provides stock for many other smaller independent growers throughout Ghana.

Twice every week, another 57,000 chicks enter the food chain, a process that takes 21 days—18 in the incubator and another three days in the hatchery.

Birds destined for the market need a minimum of five to six weeks to reach the first 1kg in weight and another couple of weeks if The hatchery the customer wants 1.5kg chickens. From there they go through the farm’s slaughtering and dressing department and then out on refrigerated vans to retailers and catering companies. Not only does Akate sell on the local market, it also does business with the

Lohmann Tierzucht GmbH Lohmann Tierzucht GmbH is very proud to be a partner of Akate Farms Ltd in Ghana and congratulates Mr and Mrs Akate and the whole team.

Lohmann Tierzucht has provided Akate Farms with the special African line ‘Lohmann Tradition’, a rustic layer with XXL brown eggs, for more than 10 years. The Lohmann Tradition is a very forgiving bird which is able to persist with high productivity even with poor feed quality, management mistakes and heat stress.

During our long relationship, Lohmann Tierzucht has supported Akate Farms with on-farm training as well as schooling of staff members at our facilities in Germany.

Regular visits to the farm and hatchery as well as feed testing help to ensure the high quality of the chicks produced by Akate Farms. Annual seminars organised

by Lohmann support the Ghanaian egg producers in achieving higher incomes with their layer birds.

We wish Akate Farms all the best for the future and are looking forward to continuing to improve the Ghanaian poultry market together for the benefit of the Ghanaian farmers.

E. info@ltz.de www.ltz.de

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View of the farm

“I try to be as transparent as possible.

People know that they can rely on what I say because I stick to my word” neighbouring countries of Mali, Burkina Faso and Togo.

Ensuring that nothing goes to waste, the considerable amount of faecal matter deposited by half a million birds is composted to produce 80,000 bags of chicken manure a year that is eagerly sought by the agricultural community.

But it is the question of feed that raises the most hackles. “Our formula for chicken feed

50 | Be food & drink

needs about eight or nine ingredients,” says Akate, “but the largest component is some form of grain. Soya is now prohibitively expensive and we have switched almost entirely to maize. Currently we are buying around 200 tonnes of maize a week.”

His farms already grow a wide range of fruit and vegetables—citrus, mango, plantain, cassava and yams—largely for the

Akate Farms

The farm grows a range of crops

farm’s own consumption. Not surprisingly, though, there is a big drive on now to increase the acreage being devoted to maize.

These days, Akate is a pillar of the community. Awarded many times for his contribution to the industry, not only is he regularly called upon for his views on the chicken rearing business but he is also doing his share for the less privileged members of society. Heavy machinery is often dispatched north to his homeland on road building duties or to drill boreholes.

He is also thought to be the only person in Ghana to single-handedly sponsor the building of a mosque, and a big one at that.

The structure at Bugubelle in his home state is 500 square metres with 70 roof

The farm is home to half a million chickens

supporting pillars and can accommodate about 5,000 people at a time during prayers.

Akate has come a long way in a short time—an achievement he puts down to his commitment and total involvement. “I try to be as transparent as possible,” he says.

“People know that they can rely on what I say because I stick to my word.”

So when Akate says that within five years he wants to double the chicken flock to one million and have a 3,000-strong herd of cattle, we should probably believe him.

For more information about Akate Farms visit: www.akatefarms.com

Be food & drink | 51

Against a backdrop of increasing competition from cheap imports and rising transport costs, Astral Foods’ CEO Chris Schutte explains how South Africa’s leading integrated poultry producer is going from strength to strength written by: andrew pelis research by: Jeff Abbott

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Astral Foods Ltd

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Meadow Feeds Randfontein

Astral Foods Ltd

T

he story of Astral Foods’ consistent year-on-year growth traces back to its beginnings in 2001 when conglomerate Tiger Brands decided to unbundle its agricultural arm.

Astral’s current CEO Chris Schutte had already been with the poultry arm of Tiger Brands for some 18 years when the decision was taken to create the new business, and after moving to Astral in 2002 has now been in the poultry industry for close to 30 years. The infrastructural, cultural and operational expertise to ensure Astral Foods was an instant success was in place from the beginning, and Astral listed on the Johannesburg Stock Exchange during April 2001.

“April 2011 saw the 10th anniversary of our listing and we are currently trading at a healthy R125 price as one of the top 100 companies on the Stock Exchange,” Schutte states. “When Tiger Brands unbundled the 25 business units there were already measures in place to ensure we operated efficiently and to high quality standards from day one.”

Headquartered in Doringkloof, Centurion, the company operates a decentralised business with three main divisions producing chicks, manufacturing feed and slaughtering poultry. While similar South African companies may specialise in one area, Schutte says that Astral Foods is the largest fully integrated poultry producer in the country, boasting seven local feed mills and four abattoirs capable of slaughtering 4.3 million broilers every week.

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industrial products and services.

Montagu Office Park Building Number 2 Corner Cedar Road & Cedar Lakes Boulevard Broadacres Gauteng, South Africa Tel: (+2711) 745-9600

Cargill

Founded in 1865, our company employs 142,000 people in 66 countries.

We help customers succeed through collaboration and innovation, and are committed to sharing our global knowledge and experience to help meet economic, environmental and social challenges. We originate, process and distribute grain, oilseeds and other commodities to makers of food and animal nutrition products. We also provide crop and livestock producers with farm services and products.

www.cargill.co.za

Cargill offers supply chain solutions and risk management services to the Southern African agricultural markets.

Our customers include producers in all of the major grain and oilseed producing regions and also the end consumers of raw materials. Cargill delivers to the main participants in the animal feed industry as well as to white maize and wheat millers and oilseed crushers.

It is Cargill’s philosophy to create distinctive value through building long term strategic partnerships with its customers. Cargill is proud to be the supplier of South African maize to

Astral Foods and wishes them every success in our future growth together.

T +27 11 745 9600 www.cargill.co.za

Cargill is an international producer and marketer of food, agricultural, financial and industrial products and services.

Montagu Office Park Building Number 2 Corner Cedar Road & Cedar Lakes Boulevard Broadacres Gauteng, South Africa Tel: (+2711) 745-9600

www.cargill.co.za

Founded in 1865, our company employs 142,000 people in 66 countries.

We help customers succeed through collaboration and innovation, and are committed to sharing our global knowledge and experience to help meet economic, environmental and social challenges. We originate, process and distribute grain, oilseeds and other commodities to makers of food and animal nutrition products. We also provide crop and livestock producers with farm services and products.

Astral Foods Ltd

Bird at Natchix

Most of the poultry is The business has had to adjust to changing produced for South Africa’s transportation dynamics in leading supermarkets with further supplies to South Africa: rail transport, wholesalers; and Astral is now which once accounted for making its first enquiries into up to 85 per cent of Astral Foods’ logistics provision, entering the quick service Astral Foods’ investment has greatly reduced as a restaurant market. in acquisitions and result of increased mining, “At any time we have as automation over the making agricultural use of many as 34 million chickens last decade on the floor and we sell 1.3 the rail roads a lower priority. million tonnes of feed per “This was always one annum both to our own internal operations of our strong points but we now rely on and externally to the open market,” road systems, which accounts for 85 per explains Schutte. “So we are involved in cent of our transportation but which is the industry from breeding through to three times more expensive,” Schutte the marketing of chickens but we are also reveals. “As a consequence, our base costs heavily into nutrition.” for the raw materials we use in our feed

R500 million

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Breed of Choice The Ross 308 has a strong partner and distributor, Ross Poultry Breeders, a division of Astral Operations Ltd in South Africa - together they are continuing to grow and lead in the market.

The Ross 308 breeder offers the best balance of important genetic traits and increased broiler performance improvements each year. The Ross 308 breeder is owned by Aviagen who invest 10% annual gross revenue in the breeding program and continued product development to ensure performance efficiencies and bird health improvements are available to all customers. Ross 308 is the breed of choice.

An Aviagen Brand

www.aviagen.com

Show the world what your company has to offer with our tailored packages

Seen www.bus-ex.com

Astral Foods Ltd have gone up significantly Ross 308 and we have had to look at The Ross 308 has a unique selection programme where our business units employing the multiple environments of first class are located. This has meant pedigree facilities together with more challenging, moving closer to grain and industry-like conditions to identify the most efficient and maize production. robust families as the source for future commercial stock.

“At the same time our These selection conditions together with the introduction of new technology in lifetime feed conversion monitoring, energy costs have been rising also a first in the industry, is providing the data to ensure by an average of 25 per cent the current Ross 308 product performance is increasing each year over the last four at a faster rate than the competition and keeping the years,” he continues. “The product at the forefront of the industry. combination of these two www.aviagen.com challenges puts pressure on the poultry industry here in South Africa and creates a tougher environment for us to compete with cheap imports from countries like Brazil.”

Schutte says that whilst the efficiency of South African poultry producers compares favourably with other areas of the world, rising production costs are making the industry less competitive and susceptible to the threat of cheaper imported meat that may not be subjected to such stringent quality checks.

“White meat such as chicken breasts is always sold at a premium price but some countries will sell their less desirable portions (like chicken legs) into South Africa at cheaper prices than they can get Staff at Ross Poultry Breeders

“We are currently trading at a healthy R125 price as one of the top 100 companies on the Stock Exchange” Be food & drink | 59

Astral Foods Ltd at home,” Schutte explains. He says that decade with further spend likely in the near Astral Foods is trying to meet this problem future. “Some of the acquisitions we have head-on by opening channels of dialogue made have been opportunistic but we have with the government now that it has joined only ever made purchases out of free cash the South African Business Chamber. and have never borrowed to achieve,” Schutte “We hope over the next couple of years emphasises. “The strategy has been part of to see some improvements that will make our focus to add value within our markets us more competitive and has seen us diversify g loba l ly wh i le at into producing a local level we are now dairy feed as well as preparing for economic poultry feed in recent years. fitness for the next 10 years.” “ The c om bi n a t ion of organic growth and Part of that preparation acquisitions has seen a has seen Astral Foods 40 per cent increase in invest some R500 million in Projected monthly feed acquisitions and increased volume from the poultry output of new feed mill automation over the last side of the business. We

30,000 tonnes

Broiler breeders - parents

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are constantly looking at new business opportunities and sites that will increase our geographic reach,” he adds.

A recent investment in the company’s KwaZulu Natal poultry site will see production increase from 120,000 to 300,000 birds slaughtered each week and should be completed within two years.

Further spend on a modern feed mill in Standerton will increase productivity while reducing the number of necessary workers, Schutte says. “The site, when fully operational in February 2014, will produce 30,000 tonnes of feed a month requiring

approximately 60 people to run the factory over three shifts. Using new equipment and technology sourced from Europe (where we regularly purchase machinery), the new mill will consume up to 30 per cent less energy when compared to existing facilities.”

Astral Foods has already passed stringent quality assurance tests as it looks to supply the burgeoning retail fast food marketplace.

The growth of companies like KFC and McDonald’s in Southern Africa has not escaped notice in Doringkloof: “It is a market that has grown significantly and we have to take a serious look at it,” Schutte

“We are constantly looking at new business opportunities and sites that will increase our geographic reach”

Meadow trucks

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Astral Foods Ltd

View of Earlybird Farm

insists. “The contracts involved offer considerable stability as they come with cost-plus protection.”

Elsewhere the company has commenced poultry production in Mozambique and Zambia and is set to expand these operations while also looking at opportunities in Swaziland. “We aim to double our capacity in Zambia and we will also look to invest further in our existing plants in line with our gross domestic produce (GDP) growth,” Schutte adds.

Research into improved animal feed nutrition is another key area of development and Astral has agreements in place to work with international companies Provimi and Cargill as they explore new feed developments. “Feed is a key driver for our contract producers, in particular how well they manage the feed conversion into

meat,” Schutte states. “We work very closely with each farmer to ensure they meet our quality assurance expectations and ensure that they continue to invest in their assets to improve production.”

Schutte believes that recent trends have seen increased consumption of chicken with a rising middle class and consumers eating more chicken rather than staple food products, which bodes well for Astral Foods. “We have seen a 50 per cent increase in chicken consumption over the last decade and still believe that poultry is the best converter of raw materials into protein.”

For more information about Astral Foods Ltd visit: www.astralfoods.co.za

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Nestlé Greater China

Feeding health and happiness in China China espouses the concept of balance and in this it has a natural partner in Nestlé, a company that is finding its established philosophy of shared value and localisation appreciated in the world’s fastest changing society written by: John O’Hanlon research by: Jon Bradley Be food & drink | 65

Nestlé Greater China

I

t seems so recently that global interest in China was fixated on its manufacturing power —the realisation that it could produce, and indeed was already producing—everything that consuming nations needed at a fraction of the cost elsewhere. Now the focus has shifted to China as a consumer society. Despite the global turndown China continues to grow—and who wouldn’t want access to 1.2 billion consumers?

The retail sector is rapidly modernising to cope with societal changes, not least the growth in per capita income. Due to the rapid pace of urbanization in China, the annual disposable income per capita for urban households climbed tenfold from RMB 1,701 (about $268 at current rates) in 1991 to RMB 17,175 in 2009. The retail market is still highly fragmented but hypermarkets are developing fast, particularly in the sophisticated cities like Shanghai and Beijing where the dominant players are Walmart/TrustMart, Carrefour, Tesco and Taiwan’s RT-Mart. The competition between brands is intense, says Heiko Schipper, managing director of Nestlé Food & Beverage, Greater China Region. “The pressure on shelf space is intense. That will inevitably lead to some consolidation.

There’s a lot of pressure on food and beverage manufacturers to ensure their market position over the coming 10 years.”

And every manufacturer in the world wants a piece of this action. “I don’t know another market—I certainly have never worked in one—where you have

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inspired Your weekly digest of business news and views www.bus-ex.com

Nestlé Greater China all international players Bayerische Milchindustrie eG present as well as so many The Bayerische Milchindustrie eG (BMI) is a co-operative local players. Even in the enterprise owned by German dairies, operating four drying US, the largest market in plants backed up by further processing and marketing the world, many companies operations. It is a leading supplier of various types of are not there because they milk and whey powders. came too late or the cost of The main emphasis is on the production of whole milk and skimmed milk powder, spray dried, edible lactose, whey powder, entry is too high.” But all the whey derivates such as WPC, partly demineralised whey major American, European powder and other special compound products using milk and and Asian companies jostle whey ingredients. The BMI has developed special expertise in one another in China. The the field of organic powdered products such as sweet whey competitive intensity is powder, WPC, demineralised whey powder 90 per cent, lactose, unprecedented—and in the skimmed milk powder, whole milk powder and yoghurt powder. food and beverage sector, Kosher and halal products are also available. www.bmi-eg.com Nestlé is number five, behind four Chinese companies.

Unlike most of its competitors Nestlé is no newcomer to China, having entered the market in 1987 and starting production in its first factory in 1990, a dairy processing plant at Shuangcheng in Heilongjiang province, the heartland of China’s dairy industry (though in those days that industry was not highly organised). “We started under an agreement with the Chinese government to develop a sustainable dairy supply chain. Nestlé’s philosophy is to produce locally—we believe in the long term it is best to create as much

$540Million Contribution of milk business to Chinese economy in 2011 Tea mountain in Yunnan Province

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shared value as possible in the country.”

Before starting milk production Nestlé had to set up collection systems and a procedure to make sure the cows were being milked hygienically. “We set up collection points across the milk districts so the milk is chilled quickly: we started to train farmers to improve the quality and the yield per cow so it became more efficient for them,” explains Schipper. “We are manufacturers but we started on the raw materials, the supply chain.” The percentage of milk and other ingredients sourced locally rapidly increased until today, 90 per cent of everything Nestlé sells in China is sourced locally—and that, he stresses, means the entire value chain, not just assembly.

There are now three milk processing plants, including one at Hulunbeier in Inner Mongolia and another at Laixi in Shandong province. In 2011 through taxes, payments to local farmers and the like, the milk business alone contributed around $540 million to the Chinese economy, a powerful vindication of the local sourcing principle.

This is a young market, and one that is ripe for development. Milk may be the universal food for infants, but as soon as the child starts to be weaned, local preferences emerge. You can’t sell Western infant food

to Chinese mothers, says Schipper, and of course, China is no more a single market than Europe. Much less so: “There is more difference between northern and southern Chinese cuisine than between Spain and Sweden.” And even a seemingly fundamental product like coffee needs to be customised for what is after all a tea-drinking culture.

Coffee is catching on, but unlike European customers who typically use coffee as a ‘wake-up’ stimulant, Chinese

“We believe in the long term it is best to create as much shared value as possible in the country” 70 | Be food & drink

Nestlé Greater China

Nescafé product on production line

consumers favour a lighter, here, giving Nestlé plenty less bitter and more gentle of scope to achieve its goal cup of coffee. So that is what of growing its business in this one commodity at a Nestlé gives them—Nescafé rate of more than (or Bird’s Nest Coffee as it is Farmers in Shuangcheng called in the China market, 20 per cent per annum. province If competition represents the only place in the world where the Nestlé brand is the first big challenge ‘translated’) is the number for Schipper, the second one instant coffee throughout this market, is people. “In one respect,” he says, but that is because it was tailor-made for the “Nestlé is old-fashioned—we believe market in Nestlé’s R&D centres in Shanghai in developing talent from within the and Beijing. The company proposes to double organisation. So training is not so much its investment in the Chinese coffee market an HR issue as a management issue.” And over the coming three years and is building this does not just mean training the direct a third RMB 600 million ($95 million) coffee employees—skills levels need to be raised factory in Laixi to supplement the existing right through the supply chain. plants in Dongguan and Shanghai. The As we already noted, Nestlé started by coffee market is still comparatively small setting up a workable supply chain: now

11,000

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the task is to catalyse a step change in the farming industry as a whole—not so much a revolution, he says, as a fast evolution.

“The industry needs to increase the size of dairy farming units—but to manage a large farm takes a very different skill set from managing a small one. Large is good only if you are professional—otherwise it can be a disaster.” In April, once the winter freeze is over, work will begin on building a dairy

farming institute in Shuangcheng.

The investments to modernize the milk district in Shuangcheng are very significant—RMB 2.5 billion, or about $400 million, shared by local farmer entrepreneurs, the government and Nestlé.

“Our vision is to bring world class dairy farming knowledge to the region. There are 11,000 farmers in the province so for those with ambition to grow this is a fantastic

“There is more difference between northern and southern Chinese cuisine than between Spain and Sweden”

Heiko Schipper, managing director of Nestlé Food & Beverage, Greater China Region

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Nestlé Greater China

Consumers at a local supermarket in Shandong Province

opportunity.” Farmers will get free training and access to capital, and though they will run some business risk, they will have a secure supply contract, subject to quality.

It is another example of the shared value concept, he says. The provincial government provides the land and infrastructure: for the farmers, it provides an opportunity to become entrepreneurs in their traditional occupation at a time when the attractions of industrial expansion are taking many people away from the land.

Nestlé’s global vision is to be the leading nutritional health and wellness food and beverage company, and its aim for China is no different. The expansion in coffee and the dairy institute mean there is no lack of major projects for 2012, which will also

see the business settle down two major joint ventures entered in 2011: with the leading confectionery brand Hs Fu Chi and the health beverage manufacturer Yinlu, which has brought Nestlé into important new categories.

Schipper’s energy and enthusiasm are matched only by the potential of the China food and beverage market. What differentiates Nestlé is simple, he contends— it is having the whole spectrum of products for health and enjoyment, and for every stage of life from pre-birth to old age.

For more information about Nestlé Greater China visit: www.nestle.com

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Taste Holdings

A matter of taste Taste Holdings manages franchises, developing efficient and customerfocused brands tailored towards South Africa’s discerning diners and consumers of jewellery

written by: John O’Hanlon research by: Vincent Kielty

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A

chacun son goût, or so they say—to each his own taste.

Taste has a dual meaning in both French and English: it refers either to the relish of food or to the sense of style possessed by the discerning. As such it is a neat name for the JSX-listed company that has its origins back in 2000 with the founding of the well known Scooters Pizza, a brand that really took off in South Africa where it is now the second largest pizza delivery chain, with 131 outlets. The other kind of taste is central to the jewellery trade, separating beauty from bling: the group’s jewellery division is focused on the 29-year-old NWJ chain of stores that now has 87 locations and is the fastest growing jewellery business in southern Africa.

Even before Carlo Gonzaga and his father Luigi started Taste Holdings they were both experienced franchisees in the food sector, owning four franchises in the Durban area.

Law graduate Carlo was chairman of the Franchisee Council for three years and during this time won Marketer of the Year, and the Franchisee of the Year awards twice.

Now CEO of Taste Holdings, he understands this business from the bottom up.

Taste has wasted little time over its short history. It was always the plan to grow aggressively, both organically and by acquisition, says Carlo Gonzaga, and the track record so far is remarkable. In April 2005 it acquired Maxi’s, a chain of breakfast and lunch restaurants that has now grown to 72 outlets. In 2010 it added St Elmo’s, another pizza brand but aimed at a different market

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Taste Holdings

Scooters Pizza store

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from Scooters. Concentrated in the Western Cape, St Elmo’s Woodfired Pizza is a sitdown, casual dining proposition as opposed to the home delivery model represented by Scooters. There are no international brands to contend with in the South African pizza market: the market is entirely dominated by native brands and among these Scooters and St Elmo’s are entirely complementary: you can have them both side-by-side in a small town, according to Gonzaga.

The group has delivered growth every year since its foundation—11 full years of expansion, with annual revenues increasing to R752 million in 2011. “Taste has expanded through a combination of acquisitions and organic growth,” says Gonzaga, “but the key factor can be summed up in two words: vertical integration.”

Taking control of the supply chain, as far as practicable, from manufacturing through distribution through to customer service can drastically reduce the cost of these operations and synergies between the businesses can be exploited.

Take the jewellery division: NWJ is the third largest jewellery chain in South Africa, and the only one with a claim to be vertically integrated. From its Durban factory and distribution facility, employing in all about 180 people, NWJ internally sources some 40 per cent of the product it sells, giving it an

advantage in flexibility and competitive lead times. All products are procured and styled in-house and distributed to the franchisees and managed stores on the company’s own fleet of vehicles. “We are going to continue to focus on vertical integration in the medium term,” promises Gonzaga. “One important reason for that is to make the businesses simpler to run from the franchisees’ perspective: having one supplier coming to your back door is a lot more attractive

“We are going to continue to focus on vertical integration in the medium term” 78 | Be food & drink

Taste Holdings

Staff at Buon Gusto central kitchen facility in Cullinan

and easier to manage than the jewellery side of our having to deal with 20!” business we often find that While every single the stores we own do better one of the food division’s than the franchised ones.” businesses is franchised, In a high value business like the jewellery trade, a 23 per cent of the jewellery stores are directly owned greater level of capital needs Taste Holdings’ annual and operated by Taste to be tied up in stock. This revenues, 2011 Holdings. “Franchisees can put excessive strain on usually do a much better a franchisee, he says, and job of running service is better handled at group businesses than retail owners,” he level, with a strong balance sheet. But even says. Food outlets are the ultimate in jewellery, circumstances alter cases: while service business. However in the right he foresees that a core group of company circumstances it is better to run a retail stores will be retained in the future, the business as a managed store under hybrid model will always work well. In the corporate ownership, he believes. “On last analysis, a franchisee usually looks

R752 Million

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NWJ jewellery

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after the customer better than a manager, Gonzaga believes.

In the financial year ending in 2011, jewellery revenues increased by 4.5 per cent to R243 million; NWJ won the Daily News Readers’ Choice Best Place to Buy Jewellery Award; and it added 10 new outlets.

The growth in jewellery sales could be called robust under the economic circumstances, but it is modest when compared with the 11 per cent group turnover increase over the same period to R750 million. By 2014, though, the board has set itself the task of doubling these earnings.

In the face of continued uncertainty in the jewellery market this will have to come mainly from food sales—and these will be helped by the St Elmo’s acquisition, whose full-year earnings will only begin to show from 2012. But its main boost comes from another acquisition.

From February 1, Taste Holdings became the owner of 220 fish and chips outlets. Fish is the fourth largest fast food category in Africa and expanding rapidly. It has grown considerably over the last five years, during which time The Fish & Chip Co has become an established brand, with strong marketing ties to the South African football fan base through an association with Bafana Bafana player Siphiwe Tshabalala. It is arguably the largest chain by number of outlets and the market leader in the takeaway fish category.

The purchase price of R66 million included all assets of The Fish & Chip Co including stock, trade debtors, the distribution centre and any payments made in advance to secure new stores still to be

Taste Holdings

NWJ Sterling gents’ watches

opened. It is an excellent fit within the group, since it is 100 per cent franchised and because the concept works just as well in the low-income townships as in the middle class and tourist locations. The pattern of spending may differ, with more people spending less per head or fewer spending more depending on income, but the level of takings per location is comparable across the board. Additionally more than half the existing franchisees have more than one store—it has become a great catalyst for

entrepreneurship at a local level.

If the company has a unique selling point, it is low prices combined with high quality, and its insistence on sustainable sourcing of fish. The problem for fish restaurants has often been one of consistency. That is why the fish, mainly hake, is all from sustainable stock. The principal supplier of fish is Sea Harvest, which is certified by the Marine Stewardship Council (MSC), the world’s leading certification and ecolabelling programme for sustainable

“One thing that absolutely drives our business is having good solid brands” Be food & drink | 81

seafood. The raw material is supplied graded to size and it couldn’t be fresher because it is caught, de-skinned, de-boned and individually quick-frozen at sea on Sea Harvest’s factory ship the Harvest Lindiwe.

The involvement of Tshabalala is a bonus: the much loved footballer and role model for the youth of South Africa, who scored the first goal of the 2010 World Cup, is an ambassador for the company—and his

involvement has brought in other soccer players who want to invest in a good and socially responsible business.

The takeover will bring in additional sales in excess of R300 million, and Gonzaga sees a massive potential in the brand. “One thing that absolutely drives our business is having good solid brands. Whatever the efficiencies you may be able to achieve through vertical integration, at the end of the day it is all

“The Fish & Chip Co is the largest business of its kind in the country and a market leader. Its growth potential is huge”

Fish And Chips outlet at Alberton City Shopping Centre

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Taste Holdings

Fish And Chips outlet interior

about selling people something they really want—whether it is pizza, a cappuccino or fish and chips.” In a business that stands or falls by creating and managing brands, Taste Holdings’ latest acquisition ticks all the boxes, he adds. “The Fish & Chip Co is the largest business of its kind in the country and a market leader. Its growth potential is huge: we see it growing from 220 outlets to somewhere between 400 to 600 outlets in the coming five years.”

Many future stores, whether belonging to The Fish & Chip Co or Taste Holdings’ other brands, will be beyond the borders of South Africa. Gonzaga has set his sights firmly on expansion into Africa, though he appreciates the difficulty of reaching out

into new territories with unfamiliar ways of doing business and challenges relating to infrastructure, lines of distribution, currency exchange and the like. Nevertheless, he hopes to be established in two new African countries—not including Namibia and Zimbabwe, where Taste Holdings already has a presence—by the end of 2012.

Every acquisition is accompanied by integration costs, and The Fish & Chip Co will be no exception. But these are quickly offset by the savings inherent in vertical integration and taking control of the value chain, he says. There are more ‘moving parts’ in the food supply chain than in non-perishable stock like jewellery, and there will no doubt be some

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Fish And Chips outlet at Broadacres Shopping Centre, Fourways

Taste Holdings ways in which the requirements of the fish and pizza businesses can be synergised.

Currently there are four separate offices and manufacturing locations for pizza premixes in Johannesburg, and an office and training centre in Cape Town—as well as a factory that produces mixes, spices and toppings. The only major operation still outsourced by the group is packaging.

Some rationa lisation of the manufacturing and distribution facilities can be expected, he says; meanwhile, the group is targeting its carbon footprint and aiming to reduce its energy consumption by 20 per cent by changing to energyefficient lighting, signage, air conditioning and cookers. The more the number of franchises in the group increases, the greater the opportunity for offsetting the anticipated rise in energy costs.

Taste has a fantastic track record to date, but just look at some of the targets it has set itself in the near term: “Last year, we said we wanted to double our earnings in three years. One year in, I think we will get to that target. The main objective in 2012/2013 is to engage with some of the growing African markets; at the same time, I expect to open 100 Fish & Chip Co outlets and I do believe we will make another acquisition in that period. We have substantial opportunities to grow the business: we have a good model and it is scalable.�

For more information about Taste Holdings visit: www.tasteholdings.co.za

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Kenya Meat Commission

A prime cut Kenya Meat Commission is determined to resume its leading position in East Africa as a producer of top quality meat cuts and processed products

written by: julia smith research by: Abi Abagun

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C

attle-farming has been a staple the Kenyan government recognised its element of the Kenyan economy potential to contribute to the nation’s for decades. The livestock sub- economic development. The site belonging sector accounts for about 10 to KMC, which had previously been closed per cent of the agricultural for a number of years following earlier gross domestic product (GDP) and employs privatisation initiatives, already had largeover 50 per cent of the agricultural labour scale facilities in place that simply required force. It makes both a direct and indirect upgrading. With the capacity to slaughter contribution to food security and the 1,000 head of large stock per day as well as sustainable development of the country, 1,500 smaller animals, this is far in excess contributing to household income at many of any other slaughterhouse in the country. levels through the sale of livestock and Moreover, in its earlier days, KMC had livestock products. It also established a clear leadership provides raw materials role in the region and a and by-products for agroreputation for excellence, industries, in addition to which, despite years of generating foreign earnings closure, the government felt through exports. could be recaptured.

Year KMC re-opened Although much of the It was decided that for business when the country’s herd, which a reinvigorated KMC Kenyan government recognised its potential numbers in the region of could play a key role in to contribute to the 15 million, remains in the complementing government nation’s economic hands of pastoralists and efforts to revive the livestock development subsistence farmers, the sector and turn Kenya into domestic market is booming a major exporter of highand becoming increasingly professional in quality beef and other livestock products. character. Urbanisation and the healthy Targeted livestock development is underway appetite of the growing middle class is giving throughout Kenya based on a series of rise to a new wave of commercialisation as strategically placed zones, which have been standards and expectations steadily rise. certified as disease-free and are subject to However, Kenyan meat is not only prized the strictest control of animal movements. at home. It has a fine reputation for taste Meanwhile, the Ministry of Agriculture and succulence which extends far beyond is engaged in an extensive programme to the country’s borders, with animal cuts and build skills and knowledge in animal health, related products traditionally sold as far production and the quality assurance of afield as the Middle East. value-added animal products.

Kenya Meat Commission (KMC) KMC has a mandate to purchase cattle re-opened for business in 2006 when and small stock and to acquire, establish and

2006

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Kenya Meat Commission

Partial list of instruments stocked and supplied on order: • Process control instruments; testing and calibration instruments; HVAC solutions; pressure/temperature transmitters; level instruments; gas detection analysis equipment; tank gauging equipment; electrical measuring equipment; timers, sensors and controllers; hand-held equipment to measure humidity airflow, velocity, sound and lighting; data loggers; flow meters for steam, water and oil; combustion management equipment; flue gas analysers; ultrasound flow meters; tube fitting equipments; needle valves and accessories.

Instrumentation Engineers (EA) Ltd enjoys the full support of suppliers both locally and internationally who have made it possible for us to stock a variety of spare parts for: • Steam Boiler; Rotary cup burners and pressure jet burners of all makes.

Partial list of spares for the above equipment: • RTD assembly; industrial heaters; thermocouples; oil fuel pumps; mechanical seals; flexible couplings; pump couplings; flexible oil pipes; quick release couplings; sequence controllers; ignition transformers; photocells; diffuser plates; thermostats; hot oil filters; solenoids; electrodes; damper motors; HP pumps; mechanical seals; Mobrey floats and switches; fusible plugs; boiler glass tubes; asbestos tapes and ropes.

Instrumentation Engineers (EA) Ltd has at its disposal a competent team of specialized engineers and technicians equipped with all the relevant skills to execute any project within the East Africa region.

We undertake turnkey projects for the design, supply, installation, erection, commissioning and after sales service of Instrumentation and Automation of your plant, steam boiler, Air Compressors and its accessories. This includes detailed engineering, civil construction, and fabrication assembly on-site.

Engineers (EA) Limited P.O. Box, 18986-00500, 1st Floor ABC Bank Building, Dar Es Salaam Road, Industrial Area, Nairobi, Kenya Tel: +254-20-2108606 Mobile: +254 731384111 Email: info@instrumentation-engineers.com

Kenya Meat Commission

Carcasses are held for five to seven days to give the most tender and juicy meat cuts

operate abattoirs, meat works, cold storage canned products and other value-added concerns and refrigeration works. The products. The focus on quality—competitors operational focus is on animal slaughter, are major meat exporters such as Brazil and the processing of by-products, preparing Australia—has enabled KMC to penetrate hides and chilling, freezing, canning and a diverse range of markets which already storing beef, mutton, poultry and other takes in several destinations in the Middle meat products. The chilling facilities have East including the United Arab Emirates, a capacity to hold 1,750 carcasses operating Kuwait, Qatar and Saudi Arabia. In North at temperatures of between zero to 2°C and Africa, a foothold has been established the carcasses are held at these temperatures in Sudan and Egypt and closer to home, for five to seven days to give the most tender KMC serves markets across East and and juicy meat cuts.

Central Africa.

Although most output KMC now operates the is destined for domestic single largest and most technica lly adva nced consumption, approximately export abattoir in the 1,000 tonnes of fresh and East, Central and Horn of frozen goat, lamb and beef is Approximate amount exported each year. Export Africa and the management in tonnes of fresh and consignments cover the team are proud of the frozen goat, lamb and whole spectrum of entire exceptional attention to beef exported each year carcasses, primary cuts, detail in ensuring that all

1,000

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“KMC is now determined to increase further its export market and sees scope for many more products� products are prepared in accordance with the highest international standards.

All livestock are inspected on arrival by veterinary officers and repeated inspections are carried out prior to slaughter, a process which adheres to strict halal guidelines.

Animals are bled along the conveyor for approximately seven minutes before carcasses are eviscerated and then split, washed, weighed and graded. A fullyequipped in-house laboratory ensures stringent quality monitoring standards are

92 | Be food & drink

kept and samples of all final products are analysed for compliance before dispatch.

This takes place through carefully selected logistics partners with a proven capability to maintain the vital cold chain during transit.

Both domestic and export markets offer a clear opportunity to gain further market share and the main challenge confronted

by KMC is how to win back its former market leadership position. ISO 22000:2005 certification is seen as fundamental in gaining customer confidence. This is already

Kenya Meat Commission

KMC buys livestock from individual livestock owners, traders, ranchers and organized livestock trading groups

in place and is seen as a vital cornerstone in the battle to regain market leadership.

“This ISO certification will give the Commission a competitive edge that will ensure greater market reach both locally and internationally,” stated Dr Mohamed Abdi Kuti, minister for Livestock Development, adding that it would augment KMC’s role in providing a market to the livestock industry which will give a major boost to the economic dynamics of the country’s pastoral communities.

Looking to the future, KMC is now determined to increase further its export market and sees scope for many more products, particularly in the value-added category: a team of food scientists and technicians are at work on an innovative range

of processed chicken and camel products. A number of opportunities have been identified for canned corned beef and production is expected to increase dramatically in 2012 when a new one-acre beef chilling facility will also become operational.

Most importantly of all, KMC’s achievements are radiating out to the wider Kenyan economy. Government officials have repeatedly praised the operational efficiency of the plant and are delighted at the contribution it is making towards Kenya’s development efforts.

For more information about Kenya Meat Commission visit: www.kenyameat.co.ke

Be food & drink | 93

Simply a better brew Namibia Breweries Ltd (NBL) offers more than a winning portfolio of some of the region’s best-selling beers

written by: Jayne Alverca research by: Paul Bradley

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Namibia Breweries Ltd

Namibia Breweries Ltd

N

amibia Breweries Ltd (NBL) of 700 employees who make the company’s competes in a fiercely operations possible. The company is also competitive market stalked by emerging as a pioneer in corporate social global heavyweights. Ongoing responsibility in Africa with a number of consolidation in the industry ground-breaking environmental and social has resulted in it becoming one of the few programmes. remaining independently owned breweries Shilongo explains that as one of in Southern Africa; yet despite its relatively Namibia’s leading corporate entities, the small size and the economic turmoil of the company is determined to foster a sense of global downturn, contracts manager Gideon environmental responsibility in the wider Shilongo points to the company’s exceptional community. “Our commitment extends track record for profitability. “Over the last far beyond legal compliance. Namibia is a four years we have achieved double-digit developing country and we see it as our duty growth every year and although the last to set an example in how its fragile resources financial year has been very can be conserved,” he says. difficult, we were proud to “One of our most successful initiatives has announce an increase in the operating profit of 24 per been as a founding member cent and earnings per share of the Recycle Namibia of 32 per cent,” he states.

Forum in 2011 which has Increase in profit from inspired national interest The strategy that has 2010 to 2011 achieved this sort of in recycling to a new level, consistent growth is centred especially among young people. The Schools’ on integrity. Firstly, NBL sells only the finest quality beers which are Recycling Competition we have sponsored brewed according to the Reinheitsgebot since 2007 has seen the number of entries purity law (a German law on beer brewing grow every year and with the Forum, we methods dating back to 1516). These may believe we can encourage many more have been drawn up almost five centuries schools in the country to recycle their ago, but the German standard for brewing waste.” has never been bettered.

Last year, NBL also supported local Then there is a philosophy of doing recycling company Rent-A-Drum with the good business. This means working to launch of its ‘Clear Bag’ system in Windhoek the highest standards of governance and in October 2010. This initiative marks building a reputation for trust and integrity Namibia’s first-ever effort aimed directly at at every level—whether it be with business the recycling of household waste.

During the past year, N$263 million has partners, customers, consumers and perhaps most importantly of all, the team been spent on replacing outdated brewing

24%

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and packaging equipment to improve efficiency and reduce the company’s energy and water usage. Almost all packaging is now derived from recycled sources. “We benchmark our environmental activities against international standards and we have a strong relationship with universities and polytechnics in Namibia who send in their students to study at first-hand what best practice means on the ground,” he says.

At present, imported raw materials have a major role to play in brewing, but the company is supporting efforts to grow barley in Namibia which will see future sourcing of a key resource take place much closer to home. Although the project is still at an embryonic stage, the results to date are highly promising. “The details of the feasibility studies are still being worked on, but over the next year we will be able to

“Namibia is a developing country and we see it as our duty to set an example in how its fragile resources can be conserved”

NBL is one of the few remaining independently owned breweries in Southern Africa

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Namibia Breweries Ltd

NBL sells only the finest quality beers, brewed according to the Reinheitsgebot purity law

make a fuller assessment of the commercial viability of what we hope will be a very exciting project which offers the chance to diversify Namibia’s economic base,” he says.

In the company’s home Namibian market, overall domestic volumes grew by seven per cent over the past year with particularly strong sales results for Tafel Lager and Windhoek Draught. Tafel Lager is brewed in accordance with the German Purity Law of 1516 using only malted barley, hops and water. Windhoek Draught is a premium quality, natural beer brewed using only the finest imported ingredients and drinkers across the region are widely showing their appreciation.

Such is the focus on quality that apprentice brewers each attend a six-month vocational training course in Germany as part of the company’s Apprentice Brewers training programme and sit the internationally recognised brewers’ exams conducted by the German Chamber of Industry and Commerce. The result is Namibian-trained, German-qualified and internationallyaccredited brewers who understand what gives good beer its soul.

However, Shilongo explains that Namibians do not have an extensive thirst to slake. The current production capacity of around 2.4 million hectolitres of beer would all but drown the local populace. “In our

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NBL began a joint venture with Diageo and Heineken in 2008

Namibia Breweries Ltd home market, you have to bear in mind that we operate within the context of a small economy and a population of just two million people. We have an 80 per cent market share at home, but that has to be seen against the five per cent market share we have in the rest of the SADC region where we see huge potential,” he says.

For a small player, the key to unlocking this potential is via a joint venture with two of the industry´s biggest names.

Collaboration began in 2004 and in 2008 culminated in a joint venture with Diageo and Heineken, DHN Drinks (Pty) Ltd, to sell a combined portfolio in more than 20 countries. “This joint venture has added a significant new dimension to our business,” he continues. “We are not just one small player trying to be everywhere and we are able to leverage many synergies in distribution and marketing with Heineken and Diageo. We have access to a very good distribution infrastructure and they have been able to extend their portfolio. It is a very successful tie-up with two global players which enables us to take on South Africa’s mighty brewing industry.”

The joint venture has seen ongoing penetration of the South African market. It is NBL’s biggest export market and absorbs 55 per cent of output. But the good news is not restricted to South Africa. Sales have

The last few years have seen double digit growth

remained buoyant in Botswana despite a massive increase in import duties and a strong foothold is now established in Cameroon, Ghana and Uganda.

Windhoek, the flagship brand is also selling well in the UK, renowned as a nation of discerning beer drinkers.

Namibia’s home-grown brewers are proving their worth on a global stage and Shilongo is convinced that an ever wider audience will learn to appreciate not just the flavour of the product, but also the values it represents.

For more information about Namibia Breweries Ltd visit: www.nambrew.com

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TPC Limited

Sweet agent of change Robert Baissac, CEO of TPC Limited, one of Tanzania’s largest enterprises in the sugar sector, talks about the unique potential of the industry to support East Africa’s development goals written by: jayne alverca research by: Abi Abagun

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Sugar is a staple output of Tanzania’s agricultural sector

TPC Limited

S

ugar is a staple output of Tanzania’s agricultural sector and has a key role in supporting the country’s economic development. Nestling in the alluvial valleys below Mount Kilimanjaro is the 16,000 hectare estate of TPC Limited, which produces almost one third of Tanzania’s total sugar output.

CEO Robert Baissac has made optimising sugar production the foundation of a long and successful career. In 2000, he re-joined the Mauritius-based CIEL Group as chief executive officer of the company’s sugar operations in Tanzania when a 75 per cent stake was acquired from the Tanzanian government.

The estate he manages currently produces 800,000 tons of cane per annum.

This is processed on-site to produce 375 tonnes of sugar per day, or 85,000 tonnes per year. This year, domestic demand is extremely buoyant and one of the biggest challenges is keeping pace with demand, which is fuelled by a tendency for traders to illegally export domestic production to the neighbouring countries of Kenya and Uganda where it commands higher prices.

At present, there is such a critical sugar shortage in the country that the government has called on local and international firms to help import 100,000 tonnes of sugar to meet the deficit predicted for next year.

Since Baissac became CEO, production at the estate has increased almost three-fold and virtually all of the increase has been driven by increased yields, rather than by expanding the area of land under cultivation.

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TPC Limited “We are situated in a very Bytes Systems Integration highly populated region Bytes Systems Integration has extensive experience and which is also very arid. The expertise in the design, implementation and operational availability of arable land management of customised IT solutions through the on the estate is also limited integration of hardware and software systems from global by the high levels of salinity technology leaders. Our mission is to deliver sustainable across almost half of the value to all our stakeholders, through the convergence of the best IT innovations, systems and people. total area. All of this means www.adaptitsolutions.co.za there is simply no scope for expansion into new areas,” he explains.

“Since privatisation, the emphasis has been on increased productivity per hectare, or what we term a vertical increase, which we have achieved in a number of ways,” he continues. “In the first instance, we now make use of new improved varieties of sugar cane with a higher yield, whereas prior to privatisation only old varieties of cane were used. One of our first actions on taking over the estate was to seek out agreements with research institutions across the world to identify the best producing varieties suitable for cultivation here.

“We also converted the old irrigation system to a new aerial system and we introduced drip-feed irrigation to some areas because it is the most efficient in terms of

“We now make use of new improved varieties of sugar cane with a higher yield”

TPC mature cane

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TPC Limited water usage. Lastly, we have undertaken many field trials Premium Agro Chem Ltd is one of the leading fertilizer to optimise fertilisation distributors in Tanzania and is proud to be affiliated with of the crop including the the highly esteemed TPC Sugar Company as one of their methods we use to apply it.” fertilizer suppliers.

TPC Limited is the www.premiumagro.co.tz biggest company and the largest employer in the Kilimanjaro region and Baissac is keen to leverage the company’s position to support wider development goals in the region. “There are many ways in which our revenue is recycled into the local economy, beyond the obvious injection of taxes,” he states. “Firstly, through the salaries of the 2,000 people we employ and through our purchases of materials and services. We buy locally wherever we can, but this is not possible if we require high-technology items. Similarly, fertilisers and herbicides have to be imported because Tanzania has a limited chemical industry.”

Sugar estates, he believes, are a wonderful vehicle ideally suited for development activity in Africa. “Land and water are the essential requirements, but there is no need for a complicated infrastructure so independent implementation is possible. It is an ideal way to generate employment and in turn improve living conditions for rural

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Be food & drink | 109

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people who would otherwise migrate to the already over-congested urban centres.

“We also contribute positively to the environment,” he continues. “Sugar cane plantations are inherently eco-friendly because they positively impact on CO2 levels in the atmosphere. Moreover, all the energy for our processes, including irrigation and domestic consumption, is derived on-site from the combustion of bagasse, a sugar cane by-product, to create a clean, renewable energy source.”

He explains that not all estates can meet their own energy requirements and still produce a surplus, but TPC is able to supply all the villages on the estate as well as those on the perimeter and still has a little excess to offer to the national grid.

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TPC Limited

Sugar cane field under land preparation at TPC

TPC sugar factory

As well as providing a vital energy source which would not otherwise be available, the company also supports the local community in micro-business development through partnerships with NGOs and has initiated many education and infrastructure improvements.

However, Baissac believes that the real potential for the business as a dynamic agent of change has barely been tapped

yet. Well-managed sugar production produces revenues that can be recycled as additional investment in the region in many innovative ways. “For example, the arid part of this estate has the potential to become a conservation area with tourist potential which could provide another great stimulus to the local economy. We have already put rangers in place to protect the non-arable part of the estate and when

“We want this estate to be a leading example of how the sugar industry can contribute to Africa’s development” Be food & drink | 111

Sugarcane field

TPC Limited

85,000 Tonnes of processed sugar produced per year

we obtain the necessary licences we hope to re-introduce animal species completely destroyed through poaching and regenerate the original flora of the area to totally return it to its natural state. It would be a very positive impact on the ecology of the area,” he states.

Other projects to produce additional wealth and diversify the economic base of the area include future plans for a distillery to make use of another by-product, which is molasses. There are also plans for a poultry project. The synergies here would give high-quality fertiliser for the sugar cane while providing another income-generating stream for local people. Affordable protein would also contribute to better nutrition.

“We cannot do everything at once, but we have many similar projects which we look forward to introducing over the next few years. We want this estate to be a leading example of how the sugar industry can contribute to Africa’s development,” he concludes.

For more information about TPC Limited visit: www.cielgroup.com

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