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AFMASS CONFERENCE & EXPO 2017 SPECIAL EDITION

EXECUTIVE INTERVIEWS Binoy Zachariah

BIO FOODS Peter Ndegwa

GUINNESS NIGERIA Kimani Rugendo

KEVIAN KENYA

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24 Pages of AFMASS Conference & Expo 2017 Review, Pictorials and more

Bharat Shah

KENAFRIC INDUSTRIES Kirtesh Shah

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INDUSTRY CHAMPIONS 2017 VOLUME 5 • ISSUE 3 • NO. 24 • ISSN 2307-3535

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THE POWER SAVER Leonardo: the OMAS roller mill that is changing milling

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CONTENTS www.foodbusinessafrica.com Volume 5 Issue 3, No.24 • ISSN 2307-3535

FOUNDER & PUBLISHER Francis Juma ADVERTISING & SUBSCRIPTION: Jonah Sambayi DESIGN & LAYOUT Cynthia Odero

EDITORIAL 5

Companies must be ready to face E-commerce disruption of food distribution and retail

FoodWorld Media P.O Box 1874-00621, Village Market, Nairobi Kenya Tel: +254 20 8155022, Cell: +254 725 343932 info@foodworldmedia.net www.foodworldmedia.net

RELATED PUBLICATIONS

INTERNATIONAL NEWS 8 9 13

Internet giant Amazon to buy Whole Foods Market Post Holdings acquires Weetabix with eye into the developing economies Coca-Cola India and partners to invest US$1.7 Billion in India’s agro chains

AFRICAN NEWS

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18 Akinwumi Adesina wins prestigious World Food Prize 19 East African Breweries Ltd to reopen brewery in western Kenya 20 Coca Cola South Africa to reduce sugar in its brands by 2018 SUPPLIER & INNOVATIONS NEWS 52

PureCircle produces new stevia extract with high degree of sugar-like taste

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Kerry acquires China’s ingredients company

EVENT REPORT 21

AFMASS Conference & Expo 2017 Report and Brochure

EXECUTIVE INTERVIEWS 37

Kirtesh Shah: Managing Director, Sigma Feeds Ltd

38

Bharat Shah: Vice-Chairman, Kenafric Industries Ltd

40

Binoy Zachariah: Founder, Bio Food Products Ltd

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Kimani Rugendo: Founder & CEO, Kevian Kenya Ltd

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Peter Ndegwa: Managing Director and CEO, Guinness Nigeria PLC

AFRICAN GRAINS MILLING & FEED 46

Mexico’s Bimbo Bakeries enters India as it focus on developing countries grows

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World maize dry milling market to be worth US$88 billion in 5 years

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Nigerian cassava starch firm to increase capacity as local demand rises

COVER PHOTO: SOME OF THE WINNERS OF THE INDUSTRY CHAMPIONS AWARD 2017 4

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www.industrybusinessafrica.com SUBSCRIPTION Email: info@foodworldmedia.net Food Business Africa (ISSN 2307-3535) is published 6 times a year by FoodWorld Media Ltd. The magazine is distributed for free to food, beverage, milling and foodservice companies and Government regulatory agencies in Africa. The magazine is available through subscription for the other stakeholders in the food chain, including suppliers to the sector. Postage is paid at Nairobi, Kenya. Send address changes to FoodWorld Media Ltd by phone or email. Copyright 2015. Reproduction of the whole or any part of the contents without written permission from the editor is prohibited. All information is published in good faith. While care is taken to prevent inaccuracies, the publishers accept no liability for any errors or omissions or for the consequences of any action taken on the basis of information published. FOODBUSINESSAFRICA.COM


EDITORIAL

Companies must be ready to face E-commerce disruption of food distribution and retail

THERE IS TREMENDOUS OPPORTUNITY AMONG NICHE CONSUMER SEGMENTS— ESPECIALLY IN THE HEALTHY EATING SPACE AND OTHER CATEGORIES THAT MAY BE MORE DIFFICULT TO FIND ON IN-STORE SHELVES.

The move was swift. The announcement caught everyone by surprise. And could probably change the way food is retailed in the years to come.

T

he June acquisition of leading natural and organic foods retailer Whole Foods Market by the leading e-commerce giant, Amazon heralded a new era in food retailing. E-retailing of food, being difficult commodities to move around, has been a grave yard for a growing list of entrepreneurs who have tried, and failed, to go big in this venture. Only less than 5% of food is traded online in around the World, but with projections to grow further in the coming years at 35% per year, faster than any other delivery option. The move, which opens the opportunity for Amazon to have over 460 physical stores, from where it can deliver not just produce but other thousands of its products, gives Amazon the best bet to break the jinx of those that have tried before it – and offers a glimpse of what the future of food retailing will be. The battle for the ‘last mile’, the distance between the retailer and the consumer’s home has just received new impetus with the entry of Amazon in this space. Problems abound in the food retailing space. Take the example of India. Despite being one of the world’s largest producers of cereals, fruits and vegetables, according to a study by the Indian Institute of Management, only 10% of the food goes through cold chain handling due to supply chain challenges. Amazon has been granted a licence to introduce food e-retailing in the country, seeking to grab and grow market share in the country, while also sorting out some of the inadequacies of the grocery value chain in the country, investing over US$500 million in the country to set up online and physical stores in the next five years. The company has also been in talks with the biggest food e-retailer, Big Basket, seeking to buy the leading brand outright to complement its Indian ambitions. Maybe these kinds of investments are what the doctor ordered for the food distribution and retailing industry, long starved of much needed investments by governments, be it in India, Africa or in the Americas. But what does these recent developments portend for the food industry? A lot, I may say. The food industry

must ready itself for a major disruption of its supply chains and markets as Millenials and Generation Z become major consumers and shoppers in the next few years. According to a 2015 study by Nielsen, the research company, the online grocery market is growing in Asia, Middle East and Africa. “Willingness to use digital retailing options in the future is highest in the developing markets in the Asia-Pacific (60% on average), Latin America (60%) and Africa/Middle East regions (59%), and trails in Europe (45%) and North America (52%),” the report titled The Future of Online Shopping & InStore Digital Technology reveals. “A few factors are at play. The region’s rapid urbanization and high population density make the home delivery model economically viable. In addition, booming smartphone ownership and usage have created huge mobile commerce opportunities,” the report continues. The food and beverage industry can rise to the occasion, fulfilling the rising need for nutritious products online, as opposed to regular products. “There is tremendous opportunity among niche consumer segments—especially in the healthy eating space and other categories that may be more difficult to find on in-store shelves. E-commerce is well suited to specialty retailing because it allows companies to offer greater product selection in a category than would typically be available in brick-and-mortar stores. Online retailers can do well by fulfilling unique customer needs, such as the desire for better-for-you foods. Nielsen research shows that today’s shoppers are seeking fresh, natural and minimally processed foods with beneficial ingredients that help fight disease and promote good health,” the report says. Have you laid down your digital and e-commerce strategies? We hope you do, before Amazon docks on your shores. Happy reading. Francis Juma


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GET READY TO SEND IN YOUR ENTRIES FOR 2018 AWARDS - GET RECOGNISED WHILE

CELEBRATING YOUR TEAM’S ACHIEVEMENTS

As a manager or investor in the region’s industry, you have in place a process and team that performs at the highest level of productivity. You have the right systems in place that ensure you meet your internal goals every day. But, how does your team compare to others from your sector or even the industry in the region? The Food Business Africa Excellence Awards celebrates the very best people and companies in Africa’s Food & Beverage and Milling & Feed industry and related academic and research institutions. Through this annual competitive award process, we seek to unearth the best people, initiatives, projects and companies in the region - that deserve to be celebrated. The winners of the awards not only get well-deserved publicity and bragging rights on our print, online and social platforms, but they also get to create a strong, cohesive team in their operations, making their teams to continue to aim for the sky, day after day, year after year. Nothing brings a team together than winning!! Entries open in November 2017. Keep informed on the awards website:

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AWARDS CATEGORIES CATEGORY

DESCRIPTION

ELIGIBILITY

INDIVIDUAL AWARDS - Celebrating individuals who have excelled and shown extraordinary leadership in the industry Industry Champion Award

Awarded to industry leaders who have over the year’s made valuable outstanding contribution to the industry as investors, directors and managers.

Manufacturers; Suppliers;

Person of the Year

Awarded to an individual who has in the last one year made significant contribution to his/her company or industry challenge, project or initiative in a unique way.

Manufacturers; Government, Academia & NGOs

Young Person of the Year

Awarded to an individual who has in the last one year made significant contribution to his/her company or industry challenge, project or initiative in a unique way. For those who have been in the industry for less than 5 years.

Manufacturers

Young Technologist of the Year

Awarded to a young researcher or student in a tertiary institution who has submitted a project with great impact for its innovation and potential impact on nutrition and industry in Africa.

Young researchers and students belears

Govt, Academia & NGOs

SECTOR-BASED AWARDS - Celebrating excellence and sector leaders in key sectors of the food, beverage, milling and feed industry Food Industry Manufacturer off the Year - given to the best company from the sectors below Dairy Manufacturerof the Year Milling Manufacturer of the Year Bakery Manufacturer of the Year Chilled & Fresh Processor of the Year Meat, Poultry & Fish Processor of the Year Beverages Manufacturer of the Year Sugar & Confectionery Manufacturer of thee Year Processed Foods Manufacturer of the Year Animal Feeds Manufacturer of the Year SME Company of the Year INDUSTRY INITIATIVES AWARD - Celebrating industry initiatives that bring new thinking to companies and industry in the region Most Outstanding Package Company of the Year Most Innovative Company of the Year Quality, Safety, Health & Environment Company of the Year Supply Chain Initiative Company of the Year Human Resources Initiative Company of the Year Sustainability Initiative Company of the Year Operational Excellence Company of the Year Marketing (including Social Media) Initiative Company of the Year PROJECT OF THE YEAR AWARDS - Celebrating new investments in the industry, highlighting key innovations and new technologies Dairy Industry Project of the Year Milling Industry Project of the Year Bakery Industry Project of the Year Chilled & Fresh Industry Project of the Year Meat, Poultry & Fish Industry Project of the Year Beverages Industry Project of the Year Sugar & Confectionery Industry Project of the Year Animal Feed Industry Project of the Year

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NEWS | INTERNATIONAL M&A

Internet giant Amazon bids for organic retailer Whole Foods Market Deal has potential to change food retail drastically and grow the Internet’s influence on the food industry

USA – The future of food and grocery retail is bound to change with the planned acquisition of Whole Foods Market, a leading retailer of organic food products in the US by Amazon, the leading internet giant that (famously) sells everything from A to Z. Under the agreement, Amazon plans to acquire Whole Foods Market for US$42 per share in an all-cash transaction valued that values the retailer at US$13.7 billion, including Whole Foods Market’s net debt. According to analysts, Amazon will seek to reduce costs by introducing high end technology, originally at the warehouses, to reduce labour, among other initiatives, as it seeks to grow the Whole Foods brand as online retail sales increase in the country. Though hailed as a clever move by Amazon, even as the Internet behemoth has struggled with its online food and grocery

retailer Amazon Fresh, providing it with more than 460 stores across the US, UK and Canada, worries linger about the effect of the deal on the entire food industry, where activist investors have over the last few years aggressively pushed listed companies to either grow fast, reduce costs or be sold to the likes of Amazon, who use technology to achieve the above goals. “This partnership presents an opportunity to maximize value for Whole Foods Market’s shareholders, while at the same time extending our mission and bringing the highest quality, experience, convenience and innovation to our customers,” said John Mackey, Whole Foods Market co-founder and CEO, who has been under the spotlight since Jana Partners, an activist investment house bought a significant stake in the company and asked for a number of key changes at

the company, failure to which they shall ask John to sell the company. “This is such a game changer. This is it. This is what everybody thought would happen. They will dominate food within the next two years. Amazon can use this (acquisition) to grow the footprint of Whole Foods to grow the stores to 1200. This is reordering because what Amazon can do is use to use this deal to do for food (which they have struggled with) what they did with other parts of retail, said Jim Cramer on CNBC. “This is a threat. Am taking down numbers for every body who sells food. Every body - because you can’t compete with Amazon. They will not let you compete,” he added. John Mackey will remain as CEO of Whole Foods Market, a company he cofounded in 1978 in Austin, Texas and which he has grown to be the largest seller of natural, organic products in the USA. Though low in comparison to other products, online sales of grocery products is expected to grow to a substantial 20% by 2015 by Nielsen, from below 5% at the best estimates, currently. It is this high growth potential that Amazon is seeking as it seeks to buy Whole Foods Market.

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TRADE

US halts importation of fresh Brazilian beef over safety concerns

USA – The US has suspended all imports of fresh beef from Brazil due to recurring concerns about the safety of the products 8

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destined for the American market, until the Brazilian Ministry of Agriculture takes corrective action to the satisfaction of the US Department of Agriculture (USDA). According to a statement by Secretary Sonny Perdue, since March, USDA’s Food Safety and Inspection Service (FSIS) has been inspecting 100% of all meat products arriving in the United States from Brazil. FSIS has refused entry to 11% of Brazilian fresh beef products, a rejection rate much higher than the one percent of shipments from the rest of the world. Since implementation of the increased

inspection, FSIS has refused entry to 106 lots (about 860,000 kg) of Brazilian beef products due to public health concerns, sanitary conditions, and animal health issues. The suspensions, coming even as the Brazilian government stopped meat exports from five meat facilities on their own, follows a number of high profile blows to the Brazilian meat industry, the largest exporter in the world. Other countries, including China and others in Europe have over the course of this year stopped meat imports from the country over the same matter. FOODBUSINESSAFRICA.COM


FOOD SECURITY

Flooding add to drought woes in Sri Lanka, hit food production SRI LANKA - Rice production is expected to drop in Sri Lanka by nearly 40 percent in 2017 according to the Food & Agriculture Organisation (FAO) as a severe drought followed by heavy rainfall in the country has hit large swaths of cropping areas, threatening the food security of about 900,000 people. According to a report published by the Food and Agriculture Organization of the United Nations (FAO) and the United Nations World Food Programme (WFP)’s joint Crop and Food Security Assessment

Mission, drought conditions in 2016 and early 2017 led to widespread crop failures, in particular for rice paddy - the country’s staple food. The report shows that total paddy production in 2017 is forecast at 2.7 million tonnes, almost 40 percent less than last year’s output and 35 percent lower than the average of the previous five years due to the drought, destroying other crops, including various pulses, chillies and onion. Subsequent heavy rainfalls in May exacerbated the situation, with floods

and landslides in the southwestern parts of the country causing deaths, large population displacements and damage to infrastructure. The situation may further deteriorate if the next cropping season fails. Due to a critical shortage of seeds and a lack of water for irrigation, the second 2017 paddy harvest - known as Yala, due to be harvested in August and September - is forecast at 1.2 million tonnes, 24 percent below last year’s level.

BIOTECH

Brazil approves world’s first commercial GM sugarcane BRAZIL – Brazil, a leader in the planting of genetically engineered crops has approved the world’s first genetically modified sugarcane for commercial purposes, reports Agro Pages. The new variety, called CTC 20 Bt, has resistance to the sugarcane borer (Diatraea saccharalis), the main plague that threatens sugar cane and is responsible for losses of R$5 billion (US$1.5 billiob) annually. The GM sugar cane, developed by CTC Centro de Tecnologia Canavieira SA and approved by the National Technical Commission of Biosafety (CTNBio)

sugarcane is considered safe for environmental aspects, as well as for human and animal health by the bio safety agency. “The approval of the Bt cane by CTNBio is a great conquest of CTC and the national sugar/energy sector. Besides economic gains, the producer will be able to simplify logistics and improve the environmental management of its operations,” highlighted Gustavo Leite, president of CTC. “The procedure of propagation is similar to the introduction of a conventional variety like the cane of the first years being used for the expansion of the planted area and the

non-approval of the sugarcane and ethanol production. This procedure is aligned with the chronogram of obtaining international approvals for sugar produced in the GMO cane,” Leite explained. “In the next few years, we plan to expand the portfolio of varieties resistant to borer, adapted to each of the producing regions in Brazil. Besides, CTC also plans to develop resistant varieties to other insects, as well as those tolerant to herbicides,” he concluded.

M&A

Post Holdings acquires Weetabix with eye into the developing economies

USA – Leading US-based breakfast cereals company Post Holdings, a, today has acquired Weetabix Limited from Shanghai based state owned enterprise Bright Food Group to grow its influence beyond the stagnating breakfast cereals market. Weetabix, leading United Kingdom (“UK”) based packaged food company that primarily produces ready-to-eat cereal products spanning branded and private

label was founded in 1932, but with an established and extensive international presence, with operations in Africa through two joint ventures in Kenya and South Africa and a distribution export business to over 90 countries. “We have long admired Weetabix as a leader in cereal and believe it will be a fantastic strategic fit within Post. Combining together two category leaders continues our strategy of strengthening our portfolio in stable categories and diversifying into new markets, bringing much-loved brands to significantly more customers globally. We are excited about the growth opportunities that this acquisition brings.” said Rob Vitale, Post’s President and CEO.

The US$1.9 billion deal is the second change of ownership at Weetabix in the last few years, after the company was originally sold to Bright Food Group, China’s leading food company, and an investment fund. The new owners’ key focus market with the acquisition, China, failed to catch on with the ready to eat cold cereals products, preferring rice based hot beverages. The company bought the company for US$1.5 billion. However, Post has agreed in principle to establish a joint venture with Bright Food Group and the investment fund to manage the Weetabix China operations, where sales have been growing since the Bright Food Group’s acquisition.

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KENYA NUTRITION, HEALTH & WELLNESS EXHIBITION NAIROBI EDITION NOVEMBER 4-5, 2017 THE HUB MALL, KAREN, NAIROBI, KENYA www.wellness.foodworldmedia.net


What’s on show at Kenya Nutrition, Health & Wellness Exhibitions? • Food and beverage products • Specialty food products - organic, Fair trade, and other certified products; • Home care products, water treatment solutions and equipment; • Baby food, baby care and pregnancy care products and solutions; • Weight management products and solutions; • Suppliers and distributors of supplements, essential vitamins and minerals, essential oils and fine ingredients; • Nutrition, health and wellness technologies and innovations, including software and hardware; • Exercise and gym equipment and services; • Cooking and kitchen care equipment and solutions; • Sleep and relaxation supplies, equipment and solutions; • Body care products and services - oral, hair, skin, face and other body products and solutions

Exhibition plus seminar focused on nutrition, health and wellness The Kenya Nutrition, Health & Nutrition expo is a family-focused weekend platform to showcase, demonstrate and discuss with consumers the unique features and benefits of your products and services. Space booking has commenced!!

BOOK YOUR BOOTH TODAY!! FoodWorld Media Ltd P.O. Box 1874-00621 Village Market, Nairobi, Kenya Tel: +254 20 8155022; +254 725 343932 info@foodworldmedia.net Please log onto the event website for more information: www.wellness.foodworldmedia.net


NEWS | INTERNATIONAL SUSTAINABILITY

Danone launches new company signature with focus on environment FRANCE - Danone, the leading food and beverage company, has launched a new company signature that will act as a ‘catalyst’ that connects the health of the people in the world and that of planet, with a call to all those involved in the food value chain to join the movement. “One Planet. One Health’ is a call to all consumers and everyone who has a stake in food to join the Alimentation Revolution: a movement aimed at nurturing the adoption of healthier and more sustainable eating and drinking habits,” says the company. “At Danone, we believe that each time we eat and drink, we can vote for the world we want. That’s the heart of the Alimentation Revolution a movement, which calls for the adoption of healthier and more sustainable ways of designing, producing and marketing food “We are convinced that embracing this movement is the best way to ensure long-term business success. We see our commitment to a radical transformation of our activities to be more local,

environmentally-friendly, inclusive and transparent as a fundamental requirement to achieve our objective of profitable, strong and sustainable growth. “Recognizing our responsibility as a global food company, and knowing that we are not perfect and that there is still a lot of work to be done, we call on partners across the agriculture and food ecosystems to join us in our efforts for a healthy future. We equally want to invite consumers to be mindful of their consumption decisions,” says Emmanuel Faber, the CEO of Danone. The company will seek to drive the Alimentation Revolution together with its consumers, customers and other stakeholders to deliver on this ambitious goal through the new signature, adds Faber. “The Alimentation Revolution is inspired by people who care about where their food comes from, how it was grown, how it arrived in their hands and how it impacts their health and the health of the planet. Global food and retail companies can play an important role in this revolution through

a transformation of their business models, moving away from standardized food systems to new models based on local diets and leveraging on local sourcing models,” says the company. Danone’s new signature comes in the wake of renewed commitments from global food and beverage companies and suppliers to reduce their environmental impacts on the planet in the face of the US pulling out of the internationally accepted climate change agreement. Danone’s new company identity will be rolled out as of 7 July 2017 and will begin to be endorsed by the company’s brands from 2018.

FOOD SAFETY

EU, China sign a food safety partnership to harmonise standards, fight fraud

EU – The European Union and China have signed a four-year partnership framework that is aimed at improving food safety and deter food fraud within the EU and China. Set to run from Sept 2017 to August 2021, the project is coordinated by the Queen’s University Belfast, Ireland. 33 key research organisations, government and industry players will participate from China, and Europe, with 18 of the players from the EU, including industry leaders including Nestle and Danone. 12

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According to the EU, the overall goal of project, dubbed EU-China-Safe, is to develop and implement a shared vision of best practice within the EU and China that will enhance food safety, deter food fraud, restore consumer trust, deliver mutual recognition of data and standards and support the flow of agri-food trade between the two trading blocks to promote economic growth. The project will focus on the most commonly reported foods linked to chemical

and microbiological contamination and fraud - dairy products and infant formula, processed meat, vegetables, wine, honey and spices. EU-China-Safe will build the core components needed for a joint EU-China food safety control system comprising: control management, food legislation, food inspection, food control laboratories, and food safety and quality information, education and communication. The projects will define a common framework for harmonization and visualization of data that will enable convergence of standards and practices. Knowledge transfer, training actions and innovative traceability tools will improve collaboration, synergies and trust between a wide range of EU and China actors, while strengthening the most vulnerable supply chains. Further, new or improved detection capabilities for chemical/microbiological hazards and food fraud will be implemented in a harmonised way across the EU-China network. The project will also seek to predict and prevent future trade barriers caused by food safety and fraud issues and in the process address consumer expectations and facilitate an expansion of EU- China trade, notes the EU. FOODBUSINESSAFRICA.COM


INVESTMENT

Coca-Cola India and partners to invest US$1.7 Billion in India’s agro chains INDIA – The Coca-Cola Company, its bottling partners and fruit suppliers and processors in India will contribute more than US$1.7 billion to the country’s agri ecosystem over the next five years, benefitting more than 200,000 fruit farmers, according to ET Retail. Close to US$800 million will fund procurement of processed fruit pulp and fruit concentrate for Coca-Cola India’s growing portfolio of juice and juice drinks and sparkling drinks with juice ingredients. The investment is part of Coca-Cola India’s efforts to create a “circular economy” of sustainable agriculture by using a variety of Indian fruits in its beverages. The company is expanding its juice portfolio with the launch of Minute Maid Pulpy Mosambi, which is produced using Indian Mosambi fruit sourced from Jalna in Maharashtra. The new product, which contains Mosambi juice and additional pulp, will be available across the country in 250ml, 400-ml and 1-liter bottles.

Meanwhile, Hindustan Coca-Cola Beverages, will partner with 13 independent bottlers and fruit processing companies to invest approximately US$900 million in manufacturing lines, the juice bottling infrastructure and fruit processing plants to support the company’s fast-growing still beverage portfolio. “We have already

expanded our Minute Maid juice range from one variant in 2007 to 11 in 2017, and if we are to realize our portfolio ambitions of being a total beverage company, we must invest in the agri ecosystem,” said T Krishnakumar, president, Coca-Cola India and Southwest Asia.

PEOPLE

World population projected to reach 9.8 billion by 2050 – UN

The number of old people to more than double, Africa included, placing burden on heaalth systems; Nigeria to be No.3 by 2050 even assuming that fertility levels will The number of people in least developed continue to decline. economies is expected to almost double to The World Population Prospects: 1.9 billion, putting a strain on governments The 2017 Revision, published by the UN in implementing the 2030 Agenda for Department of Economic and Social Affairs, Sustainable Development that seek to end notes that India is set to overtake China poverty and hunger, among other ills. by 2014, rising from the current China 1.3 Compared to 2017, the number of billion people compared to China’s current persons aged 60 or above is expected to 1.4 billion inhabitants, taking the mantle of more than double by 2050 and to more the most populated country in the world. than triple by 2100, rising from 962 million Nigeria, currently the world’s 7th largest, globally in 2017 to 2.1 billion in 2050 and 3.1 is projected to surpass that of the United billion in 2100. States and become the third largest country Africa, which has the youngest age in the world shortly before 2050. distribution of any region, is projected to However, most of the global increase experience a rapid ageing of its population. between now and 2050 will be attributed Although the African population will remain to a small number of countries, with half of relatively young for several more decades, the world’s population growth concentrated the percentage of its population aged 60 or in just nine countries: India, Nigeria, the over is expected to rise from 5% in 2017 to Democratic Republic of the Congo, Pakistan, around 9% in 2050, and then to nearly 20% Ethiopia, the United Republic of Tanzania, by the end of the century, notes the UN. the United States of America, Uganda WORLD - The world population is expected and Indonesia, in order of their expected ADVERTISE WITH US to rise from 7.6 billion currently, to reach 8.6 contribution to total growth. billion in 2030, 9.8 billion in 2050 and 11.2 Africa will continue to experience high billion in 2100, according to a new United rates of population growth, where the Nations report. populations of 26 African countries are With roughly 83 million people being projected to expand to at least double their added to the world’s population every current size, despite a reduction of total year, the UN says that the upward trend fertility that has fallen from 5.1 births per in population size is expected to continue, woman in 2000-2005 to 4.7 in 2010-2015.

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NEWS | INTERNATIONAL INTERNATIONAL BRIEFS REGULATION

EU rules against using dairy names to label plant based alternative products

RESEARCH

Organic products ‘driving growth’ in Chinese infant formula – study CHINA - New research from Mintel shows signs of promise in China’s infant milk formula category, with volumes being driven by its emerging middle class and the decision to phase out the country’s socalled ‘one-child policy’. Mintel has predicted that infant formula volumes will grow by 5.4% between 2016 and 2021, with organic options set to be one of the fastest-growing areas. It’s now estimated that 75% of Chinese mothers feed their babies organic infant formula, as the quality of products and the amount that parents will spend on their children’s nutrition continue to be key determinants in consumer purchasing behaviour. According to the study, younger mothers in particular are interested in organic formula options, Mintel said, with 79% of mothers aged 25-

34 using products of this kind. China’s new middle class also prefers organic infant formula products, with nearly 90% saying that they use these products – a significantly higher proportion than consumers overall (72%). Mintel research found that half of mothers choose organic infant formula because they are willing to pay more for their baby’s food. This is also the main driver for them to choose niche products, such as goat milk infant formula. Food safety remains a key motivator for Chinese consumers, especially when it comes to their children, especially on the back of the melanine in baby food incident that led to a plunge in consumer confidence in locally produced products, with the consumers preferring imported bay formula.

TRENDS

EU – The European Commission has ruled out the labelling of plant-based milk alternatives with common names used in the identity and labelling of regular dairy products, dealing a potential blow to the rising industry in the Continent. According to a European Court of Justice ruling, purely plant-based products cannot, in principle, be marketed with designations such as ‘milk’, ‘cream’, ‘butter’, ‘cheese’ or ‘yoghurt’, which are reserved by EU law for animal products. It also struck out designations accompanied by clarifying or descriptive terms indicating the plant origin of the product concerned. The Court observed that, in principle, for the purposes of the marketing and advertising in a court case, the relevant legislation reserves the term ‘milk’ only for milk of animal origin. It also observed that the addition of descriptive or explanatory terms cannot completely exclude the likelihood of confusion on the part of consumers. The court case comes after many years of arguments by the dairy industry’s warning that the use of such terms to describe plant based products not only mislead consumers who cannot make informed decisions between milk and its unique profile and is a threat to the dairy industry at large. 14

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Global plant-based milk market to soar, hit US$16 billion in 2018 USA - The global market for dairy alternative drinks is expected to more than double to US$16.3 billion in 2018, from US$7.4 billion recorded in 2010, as consumer acceptance and critical investments by leading dairy companies open up opportunities in the category. According to new research by Innova, dairy alternative drinks accounted for 7% of global dairy launches in 2016, up from 6% in 2015. However, actual global launch numbers more than doubled over a five-year period. Further, dairy alternative launches grew at a CAGR of 20% over the 2012-2016 period. Meat substitutes had a CAGR of 14% over this period, while the use of vegan positioning in global food and beverage launches tripled from 2012 to 2016, notes Innova. “The dairy alternatives market has seen rising levels of interest in recent years, spurred mainly by consumers increasingly looking for lactose-free, dairy-free and plant-based/vegan options as healthy lifestyle choices, rather than regarding them as simply for those with allergies or intolerances,” says Lu Ann Williams, Director of Innovation at Innova Market Insights. “The category has been further boosted by the growing availability and promotion of plant-based options to traditional dairy lines, particularly beverages, but also cultured products such

as yogurt, frozen desserts and ice cream, creamers and cheese.” Just over half of these launches were positioned as lactose free, nearly 40% as vegan and just under a quarter as GMOfree. The recent acquisition of WhiteWave by leading dairy company Danone in 2016, has opened the category to further growth prospects, presenting Danone with the opportunity to further develop its interests in this dynamic market in both North America and Europe. In China, which has the fastest growth in the category, with a CAGR of 18.7% forecast between 2010 and 2018, reaching a market value of US$6.7 billion, Want Want, one of Greater China’s leading food processing companies, recently announced its expansion into soy and other plant-based beverages. “In the move to offer something new, we are also starting to see an increasing variety of non-soy plant-based alternatives, including cereals such as rice, oats and barley, and nuts – such as almonds, hazelnuts, cashews, walnuts and macadamias – as well as more unusual options such as hemp and flaxseed,” notes Williams.

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APRIL 25-27, 2018 NAIROBI, KENYA

THIS CONFERENCE IS PART OF

The African Food & Beverage Tech Conference is the go-to educational platform to discover the latest post-harvest, processing, packaging and food safety technologies and regulatory matters in the dairy, beverages, horticulture, processed food and food service with a focus on Africa’s industry. But there is more in store for you, with an expo where you also get to meet leading regional and international suppliers so you can implement your ideas immediately. SIgn up today!!

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NEWS | INTERNATIONAL STRATEGY

Nestle to redefine focus as activist investor asks global major for change of strategy Food giant to review, maybe sell, its US candy business as it removes artificial ingredients from its Maggi product line USA – The world’s biggest food and beverage company Nestle has committed to put its focus on coffee, infant nutrition, water and petcare as an activist investor with a significant stake pushes the company to deliver more to its shareholders. Responding to a letter sent to its shareholders by Third Point hedge fund, owned by activist investor Daniel Loeb, which had asked the company to sell its entire stake in personal care major L’Oreal, as well as increase its profitability goals and sell non-essential business units, Nestle has also announced that it will buy back shares worth US$21 billion by the year 2020. Third Point recently bought a significant 1% worth of shares (valued at US$ 3.5 billion) in the company. “As a result of this review, Nestlé determined that capital spending will be focused particularly on advancing highgrowth food and beverage categories such as coffee, petcare, infant nutrition and bottled water, as well as expanding its presence in high-growth geographic markets. In line with the company’s nutrition, health and wellness strategy, it will also pursue growth opportunities in consumer healthcare,” the company said in a statement. “Nestlé will also continue to assess opportunities for margin improvement through targeted efficiency programs that do not undermine the company’s performance in attractive long-term growth categories,” it added. Meanwhile, the company is considering the sale of its US confectionery business which makes such candy brands including Butterfinger, BabyRuth, 100Grand, which had sales of around CHF 900 million (US$

925 million) in 2016. The announcement was made before the hedge fund started pushing Nestle to divest some of its operations. According to the company, the planned review of the candy business in the US is in no way a sign of the company slowing down on growth in the US, the company’s largest market, where it delivered sales of CHF 26.7 billion (US$ 27.5 billion) in 2016. The company employs over 51,000 people in more than 120 locations across the US, including 77 factories and 10 research centres. Meanwhile, to meet growing need for clean label products, the company’s iconic Maggi brand portfolio is set for a renewal with the use of ‘simple, recognisable ingredients that people are familiar with, like those they might find in their kitchen cupboard,’ says the company. “The goal is to transform the Maggi

range globally by 2020, removing ingredients that consumers do not easily recognise and adding more of those that they do, including vegetables and original flavours from vegetables, herbs and spices, grains and other nutrient-rich ingredients,” the company explains. Part of the new Maggi ‘Simply Good’ initiative to inspire and offer tastier and healthier choices, Nestle will also continue to lower salt in the Maggi range, with an average sodium reduction of 10% between now and 2020. The initiative will also increase the servings of fortified Maggi servings from 110 billion in 2015 to 120 billion by 2020. According to the company, the Simply Good initiative has already kicked off in Central and West Africa, where Nestlé is also highlighting nutritional challenges by engaging with government authorities, civil society and consumers.

SUSTAINABILITY

Unilever announces new waste recycling technology it seeks to share with industry UK – Industry giant Unilever has announced the creation of a pilot plant for a new radical recycling process that could address the billions of plastic sachets produced by a wide range of industries. Dubbed the CreaSolv technology, Unilever has been working with the Fraunhofer Institute for Process Engineering and Packaging IVV in Germany from 2011, with the aim of recycling high-value polymers from used and dirty, multi-layer sachets, so they can be used again to make safe, non-food packaging. The results of the use of the technology, found to be viable and valuable to the environment, has 16

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enabled the company to open a pilot plant in Indonesia where it will trial the use of the technology on a commercial scale. The company is willing to share the

breakthrough technology with other industry players, inviting them to help the company scale up the technology and in building a recycling infrastructure for sachet collection that supports the process. “Since the problem is a shared one, we think the solution should be shared too. We want to make the technology we have developed open source, so that others, including our competitors, can use it. Unilever cannot solve the issue of plastic waste on our own – but along with others – we can build a system that will help in reducing the plastic waste that blights our shared landscapes and oceans,” says the company. FOODBUSINESSAFRICA.COM


NEWS | AFRICAN INVESTMENT

Danone invests US$25 million in new lines at Fan Milk Ghana GHANA – French dairy group Danone and its investment partner Abraaj Group has expanded their investments in Ghana’s leading dairy company Fan Milk to meet new market demand for its products in the regional West African market, as the company launched new ambient drinking yoghurt, FanMaxx. The factory extension investment worth US$ 25 million added three new production lines to Fan Milk (Ghana) Ltd’s factory in Accra, Ghana. According to the companies, the investment is proof of Danone and Abraaj’s commitment to local manufacturing and to continue growing the Fan Milk brand in the region for the long

term, with the new production lines creating 200 jobs. This factory extension will also sustain the production of FanMaxx, a new ambient drinkable yogurt introduced in June this year, and is the first of its kind in West Africa, according to Danone. The product can be consumed chilled or ambient and has a long shelf life of 4 months that is particularly suited to the African markets where the cold chain is not always available. It is affordable and convenient and is available in 330ml bottles in more than 5,500 outlets in Accra, Tema and Kasoa by end 2017. Fan Milk is one of the oldest brands in Ghana. It was founded in 1962 and enjoys

outstanding brand recognition in its market. It operates in Ghana, Côte d’Ivoire, Ghana, Burkina Faso, Togo, Benin and Nigeria, which together gather more than 250 million potential consumers. Danone and Abraaj jointly invested in Fan Milk in 2013. Danone became a majority shareholder in Fan Milk in 2016.

AGRIBUSINESS

FrieslandCampina WAMCO Nigeria opens new milk collection centre NIGERIA - FrieslandCampina WAMCO Nigeria PLC has commissioned a fifth milk collection facility for its Dairy Development Programme (DDP) in Saki, Oyo State, Nigeria. “Since 2011, FrieslandCampina WAMCO has been investing in the DDP and has established the country’s largest milk

collection network. Today, the company collects milk from about 1700 farmers in over 70 communities in Oyo State, who as a result receive good remuneration directly from the company,” said Corporate Affairs Director, Mrs. Ore Famurewa. The programme aims to strengthen the Dairy Transformation Agenda of

government by demonstrating proof-ofscale in Nigeria’s processor-led initiatives for dairy development as modelled by FrieslandCampina WAMCO’s Dairy Development Programme (DDP). The Saki Milk Collection Center is the fifth milk collection center and has a capacity to hold about 12,000 litres daily.

PEOPLE

Adesina wins prestigious US$250,000 World Food Prize

NIGERIA – Dr. Akinwumi Adesina, President of the African Development Bank, has been named the winner this year’s ‘Nobel Prize’ of the food and agro industry, the World Food Prize. The prestigious US$ 250,000 prize is given annually to a person who has worked to advance human development by “improving the quality, quantity or availability of food in the world.” Since it’s founding in 1986, the 18

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Prize has honoured 45 individuals for their outstanding contributions to food security around the world. According to the nominating committee, Dr. Adesina, the immediate past Minister of Agriculture in Nigeria, has been nominated for his leading role over the past two decades in significantly expanding food production in Nigeria, introducing initiatives to exponentially increase the availability of credit for smallholder farmers across the African continent and for galvanizing the political will to transform African agriculture. “The selection of President Akinwumi Adesina as the 2017 World Food Prize Laureate reflects both his breakthrough achievements as Minister of Agriculture of Nigeria and his critical role in the development of the Alliance for a Green Revolution in Africa (AGRA). It also gives further impetus to his profound vision for enhancing nutrition, uplifting smallholder farmers, and inspiring the next generation of Africans as they confront the challenges of the 21st century,” said Ambassador Kenneth Quinn, President of the World Food Prize Foundation, in making public President Adesina’s name.

Mr. Quinn said Mr. Adesina has helped galvanize support to transform agriculture on the continent through his various initiatives, which increased farmers’ yield and incomes. “All of his policies were very farmer friendly, and he became known as the ‘Farmer’s Minister’”. The committee was also “taken” by Adesina’s own life that began with him growing up in a poor village, and how education “allowed him to lift himself up,” Mr. Quinn said. “I see a future where agriculture is treated as a business, not as a way of life; I see a continent in the next ten years that will be able to feed itself; I see a continent that will be able to transform its rural economy from zones of misery to zones of economic prosperity; I see a continent that is able to end malnutrition,” said Adesina, as he accepted the nomination. As president of the AfDB, Dr Adesina has streamlined the work of the organisation to meet one of its key pillars: Feed Africa that seeks to end hunger and rural poverty on the continent in the next decade. FOODBUSINESSAFRICA.COM


INVESTMENT

East African Breweries Ltd to reopen brewery in western Kenya, to brew Senator KENYA – East Africa’s largest brewing concern, East African Breweries Limited (EABL), has announced plans to resume its brewing operations in western Kenya, returning to Kisumu city where it closed operations in the year 2002. The KSh15 billion (US$150 million) investment in a new brewery, the single largest in decades in the brewing industry in Kenya, according to EABL, is expected to “open a significant socio-economic lifeline for the Nyanza region and Kenya at large, creating over 100,000 direct and indirect jobs to support its expansive value chain.” The new brewery, earmarked for production of its low cost Senator Keg lager, is projected to start operating in 2019, according to the company. “This multi-billion-shilling commitment by the EABL underlines the strong confidence driving local and global investors in Kenya with significant multiplier effects to the Kenyan economy in future,” said the company in a statement. The investment will potentially double the demand for sorghum and millet in Kenya and recruit over 15,000 farmers who will be recruited to grow the two commodities for use in brewing the brand, said Kenya’s President Uhuru Kenyatta, at the announcement ceremony at the State House, Nairobi. Present at the announcement were Diageo Africa President John O’Keeffe,

EABL Group Managing Director, Andrew Cowan and Kenya Breweries Ltd Managing Director, Jane Karuku. Investment in Senator Keg, the low cost lager beer that continues to drive the

growth of the brewer’s business in Kenya - where swings in regulatory policy has affected the company’s mainstream and premium products – shows the renewed commitment of the brewery in the country, and is indicative that the brewer has turned the corner in its performance and is now willing to be more aggressive in its strategy in Kenya. “The re-opening will help plug fresh demand for Senator, a hugely successful beer product launched in 2004, targeted at the low-end of the market. EABL has developed a robust value chain supporting Senator’s production, and the latest investment will expand the number of contracted farmers from the current 30,000 to 45,000,” says the company. EABL has seen the share of its business attributed to Kenya rise significantly from 61% as at the end of financial year 2015 to the end of 2016, from 61% to 74% due to stagnant market share in Uganda and Tanzania, and the collapse of its export business into South Sudan due to internal strife. The investment in Kisumu, in western Kenya, which the company opened in 1984 only to close in the mid 2002, fits into its renewed focus on Kenya – as it seeks to defend its stranglehold on the country’s beer industry from imported beer from the region and abroad.

SUSTAINABILITY

Mondelēz to fight deforestation in West Africa in new drive Cocoa Life signs agreements with Côte d’Ivoire and Ghana to reduce deforestation in cocoa production

COTE D’IVOIRE - Mondelēz International, the food company famous for its chocolate, gums and other food products, has signed a Memorandum of Understanding with Côte FOODBUSINESSAFRICA.COM

d’Ivoire’s Ministry of Environment as part of the country’s REDD+ program to support its goal to reach zero deforestation in the country’s cocoa value chain. Cocoa Life, the company’s sustainable sourcing program, will collaborate with governments in West Africa to reduce deforestation in the cocoa supply chain, including Ghana “Mondelēz International, through its Cocoa Life program, is leading the cocoa industry to engage on an approach to reduce deforestation in the cocoa supply chain in Côte d’Ivoire,” said Jean Paul Aka, Head of National REDD+ Strategy and Private Sector Commitment. Cocoa Life and Côte d’Ivoire’s Ministry of Environment will create a forest protection map, land use plan and tracking system to identify deforestation risks and opportunities to restore forest cover in the

Nawa region, which borders the precious Tai National Park. Additionally, Cocoa Life will promote good agricultural practices to enable farmers to improve productivity, adopt agro-forestry systems and free up land for other crops or reforestation. “Cocoa farmers and community leaders in West Africa tell us climate change is already impacting their farms,” said Chris McGrath, Chief Well-being, Sustainability and Public Affairs Officer at Mondelēz International. “With our investment in Cocoa Life, we have the capacity and the partnerships to help farmers become more resilient by adopting climate-smart solutions and protecting forests. These new agreements will amplify our existing work to protect the precious environment in cocoagrowing regions.”

FOOD BUSINESS AFRICA | MAY/JUN 2017

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NEWS | AFRICAN WELLNESS

Coca Cola South Africa to reduce sugar in its brands by 2018 SOUTH AFRICA - Coca-Cola Beverages South Africa (CCBSA) plans to drive down the average unit sugar content across its portfolio of products by 22-24% by the end of 2018, says Velaphi Ratshefol, the Managing Director of the company. According to a press release in the Business Report, the company will achieve this through switching consumers from regular to zero sugar versions of its brands while also reviewing all of its recipes and formulas for its regular products and reducing their sugar content in the recipes, where it makes sense to do so. While debate around the tax sugarsweetened beverages continues, the company’s focus has been on driving reduced consumption of sugar through a three pronged strategy: increasing the marketing and variety of Diet, Light and Zero sugar alternatives to popular brands; introducing smaller pack sizes to encourage portion control; and reformulating the recipes of certain brands by reducing the

sugar content, explains the company. When it comes to obesity, a tax on sugarsweetened beverages (SSBs) is unlikely to be the most effective way to change behavior, insists CCBSA. Instead, a portfolio of interventions and holistic strategy are needed to encourage the reduction of sugar consumption. According to the MD, reformulation efforts have seen sugar reductions across key brands with the goal to reduce the

overall sugar content across its portfolio of beverages over time. The company’s efforts at portion control have already made a lot of headway, with the goal of offering consumers smaller pack sizes. It has already completed the discontinuation the 2.5 litre size Coke, while decreasing the 2.25 litre to 2 litre for 2 Coke and core flavours, as well as the 500ml bottle (to 440ml) and the 330ml (to 300ml). It is also expanding the production of the 1.5 litre as an alternative to the 2 litre bottle. CCBSA believes that the lack of a nationally led campaign to change healthrelated behaviour through education and information has made the industry’s efforts to introduce nutrition labelling and factbased Guideline Daily Amount (GDA) not make sense to the consumer, and continues with its call to the government of South Africa to work with the company and the industry to educate and inform consumers on healthy living.

STRATEGY

Tiger Brands to be cautious on its approach to rest of Africa SOUTH AFRICA – Leading South African diversified industry conglomerate Tiger Brands is refining its rest of Africa strategy, and will adopt a more focused approach when entering new territories, reports BDLive. The company, which has been one of the most aggressive South African companies to enter Africa post-apartheid, is returning its focus on its home country, after painful episodes that made the giant dispose of its operation in East Africa (Kenya and

Ethiopia) and in Nigeria. Speaking on Thursday, said, historically, the pursuit of geographic diversification had led to a loss of focus and thinly spread resources. “The intention is to reverse this cycle of underperformance by creating fuel for growth through focusing the portfolio and distorting investment where appropriate. Defining the core is therefore critical to building portfolio strength and performance,” said the company’s new CEO

Lawrence MacDougall Mac Dougall stressed that Africa and emerging markets remained a key part of Tiger Brands growth strategy but that a new refined approach would be taken with regards to these territories. “Looking ahead, we will prioritise core category opportunities based on market attractiveness, strategic fit and our right to win. Similarly, the role of associates will be reviewed continuously,” he said.

INVESTMENT

Bidco unveils expansion plan, to grow turnover to US$1 billion by 2021 KENYA - Consumer goods manufacturer Bidco Africa has unveiled a growth plan to more than double its local annual turnover from US$400 million to US$1 billion by 2021, reports Daily Nation. Revealing the ambitious five-year plan, Group Chairman Vimal Shah said the target would be achieved through an ongoing massive expansion. He said the company would set up new factories at its modern industrial park in Ruiru, near Nairobi, Kenya that will host 10 factories, which shall manufacture some of the company’s known brands, new food and beverages production line and other personal hygiene products. The new products are expected to hit local markets by end of 2017. 20

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“We are entering a high growth phase with the construction of the industrial park in Ruiru. The facility will house 10 new factories four of which will be commissioned by the end of the year in the first phase representing an initial investment of US$ 50 million. The second phase will see the remaining six factories set up in a period of four years at an additional investment of US$150 million,” revealed Vimal. On the management side, the company is currently in the process of transitioning its management from a family owned-and-run entity into a family-owned, professionallymanaged enterprise, with a new CEO Thiagarajan Ramamurthy taking over from Vimal, who has taken the chairman role

from the founder of the company, BD Shah. Further, the company has released a code of ethics that will help it sustain its growth and leadership in manufacturing of fast moving consumer products locally and abroad. According to the CEO the code of ethics are meant to guide the company’s staff and stakeholders on how to deal with each other as they go about their daily activities. “Institutionalising our code of ethics is part of the ambitious growth journey that we have embarked on. They are our guide into creating a world class culture for Bidco, we have the will and scale to achieve it,” he said.

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AFRICA MANUFACTURING & SAFETY SUMMIT (AFMASS) CONFERENCES & EXPOS PROCESSING + PACKAGING + SAFETY

APRIL 25-27, 2018 NAIROBI, KENYA FOOD & BEVERAGE

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AFMASS 2017 | EVENT REPORT

The 2017 edition of Africa Manufacturing & Safety Summit (AFMASS) Conference & Expo broke all the records and set the stage to make this event sub-Saharan Africa’s leading networking, trading and learning forum for the food, beverage, agro, milling, feed, hospitality and foodservice industry.

AFMASS IS ‘MADEIN-AFRICAFOR-AFRICAFOR-AFRICA’SINDUSTRY’. IT PROVIDES A PLATFORM FOR ALL STAKEHOLDERS TO INTERACT AND LEARN THE LATEST INNOVATIONS THAT CAN BE ADAPTED TO AFRICA’S GROWING INDUSTRY

Key Statistics • More than 100% increase in delegate and visitor numbers - more than 800 industry leaders attended the event • Seven leading global brands (Buhler, CocaCola, Tetra Pak, Nestle, DSM, BASF, DNV GL) supported the event through premium and session sponsorships • More than triple growth in exhibition space and number of exhibitors to 32 local, regional and international brands representing 14 countries from Africa, Asia, Europe and Americas. • Two conference streams: one covering food and beverage and the other, grains, milling and feed.

Held at the business-friendly Visa Oshwal Centre in Westlands, Nairobi Kenya on April 25-27, 2017, AFMASS Conference & Expo 2017 welcomed 810 delegates and visitors (395 in 2015). The delegates and vistors were eager to learn about the latest processing, packaging and food safety technologies; buy latest innovations from leading regional and international suppliers; and network with industry peers, Government agency regulators and other stakeholders. Francis Juma, the Founder of FoodWorld Media, the organisers of the event is glad that the industry is increasingly getting to understand and appreciate the event. “The idea behind AFMASS is fairly simple and straight forward: To make AFMASS the most important event in Africa’s food and agro sector. An event that is ‘made-in-Africa-for-Africa-forAfrica’s-industry’ that takes into consideration the Continent’s unique challenges, and that seeks to provide a platform for all the stakeholders to

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network, trade and learn the latest innovations that can be adapted to Africa’s growing industry.” “As publishers of the industry publication, Food Business Africa, we are in a unique position of being at the forefront of understanding the opportunities, challenges, regulations and trends in Africa’s industry. These topical issues get to be discussed and presented at AFMASS every year, adding to the coverage we already have over these issues in the magazine. This has made the industry to find AFMASS to be their best platform to network, learn and trade in Africa,” he added. With more than 30 countries represented at AFMASS 2017 and more than 100% growth in sponsors, exhibitors, delegates and visitors at this industry event, the organisers are confident that AFMASS is on the route to being the industry’s leading trade show and conference for the industry in Africa. Fast growth, more support from partners “The 2017 edition of AFMASS broke all previous records for this young industry event. With a total of seven (7) industry-leading companies sponsoring AFMASS 2017, the event took on a new dimension in 2017,” said Juma.

Coca-Cola, Buhler, Nestle, DSM, BASF, Tetra Pak and DNV GL were the premium sponsors of AFMASS 2017, while Kericho Gold tea sponsored the tea sessions and Texplast Industries sponsored the conference bags. A total of 32 leading international regional and local companies from USA, Africa, Asia and Europe showcased their products and services with the goal of reaching out to the key decision makers in Africa’s industry.

FOODBUSINESSAFRICA.COM


Binoy Zachariah, Founder of Bio Food Products leads a panel discussion on Investments in Africa’s food and beverage industry attended by (from left) Gavin Bell (a consultant for the franchising & HORECA), Amir Parpia (Finance Director, Alpha Fine Foods) and Yosuke Kotsuji (Senior Investment Officer, IFC).

On the exhibition floor, a number of equipment manufacturers, packaging providers, ingredients and chemical suppliers, food safety, post-harvest and hospitality & foodservice and food companies showcased their products and services from over 14 countries around the World. Sponsors and exhibitors were especially happy with the high calibre of delegates and visitors to the event, considering that more than 70% were key decision makers in their companies and organisations. What was new at AFMASS 2017? The 2017 edition of AFMASS Conference & Expo had a number of new additions, chief of which included:

New, better, secure venue The event was hosted at the bigger, more secure and easily accessible Oshwal Centre, which is located at the premier Westlands District in Nairobi. With the event moving to a new venue, the numbers increased significantly. The first AFGRAINS Conference The first one-day African Grains, Milling & Feed Tech Conference was held at the 2017 edition of AFMASS, giving the grains industry the only regular technical FOODBUSINESSAFRICA.COM

conference in Africa - which will continue to be part of the conferences at AFMASS into the future. Food Business Africa Industry Excellence Awards The 2017 edition of the event also had a new additional high-impact side-event, the Food Business Africa Industry Excellence Awards ceremony that was held at the Southern Sun Mayfair Hotel in Westlands, Nairobi on April 26, 2017. During this Awards ceremony, a number of long term industry investors, managers and researchers were given the Industry Champion Award, the industry’s lifetime achievement award. The Awards ceremony took place during the Official Dinner ceremony that was sponsored by Nestle. The Food Business Africa Industry Excellence Awards ceremony are set to be part of AFMASS Conferences & Expos going forward. Live conference sessions streaming The event also debuted online conference session coverage during the last day of the event, providing those who could not make it to the conference with a great

opportunity to watch proceedings from around the World. AFMASS 2018 – Two Countries, One Continent AFMASS 2018 is set to be even bigger and better than that of the 2017 edition.

With a new edition in Lusaka Zambia to add to the Nairobi, Kenya edition, AFMASS Conferences & Expos are expected to break new ground for the industry in Africa with an expanded Awards ceremony, factory visits and more. See you in Lusaka and Nairobi in 2018. Francis Juma FoodWorld Media

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INDUSTRY AWARD CHAMPIONS

Industry Game Changers Honoured The Industry Champions Award is the highest category at the annual Food Business Africa Industry Excellence Awards ceremony. The awards, powered by Food Business Africa magazine, are equivalent to the Lifetime Achievement awards are given to those who have made the greatest contribution to the growth of the industry in Africa.

L-R - Kirtesh Shah, CEO Sigma Feeds; Bimal Shah, CEO, Broadways Group; Dr. Florence Wambugu of Africa Harvest; Martin Schlauri MD of Buhler’s Africa Milling School; BD Shah, Founder of Bidco Africa; Nick Hutchinson; CEO of Unga Group; and Binoy Zachariah, Founder of Bio Food Products

A

cross Africa, the food industry is on an upward trend, buoyed by rising investments, innovation and hard work by all concerned – from investors, managers, suppliers, governments and other stakeholders who keep on oiling the wheel of progress forward. And with this growth, there can be no disputing the fact that some people have led the way in opening this path of progress, with profound effects on the broader industry and the economy at large. Be they founders, directors, managers or researchers or public sector individuals, the food and related industry in the region has gained immensely from these individuals’ commitment, sacrifice and devotion to the cause and growth of their companies and the industry at large. It is these individuals that we seek to celebrate every year through the Industry Champions Award, which is similar to a Lifetime Achievement Award, at the Food Business Africa Industry Excellence Awards ceremony. This year, we had the honour of bestowing the Industry Champions Award to a number of veterans in the industry, academia and the NGO world, who have over the years changed the profile of the food industry value chain, at the first ever industry awards ceremony in the region. The profile of these leaders, which is reflective of the industry, is a clear indicator that Africa has reached a point of ‘looking up to its own people as industry leaders”, as Kimani Rugendo, one of the recipients of the award, told us as he receiving his award. 30

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In the manufacturing category, we had the honour of bestowing the award on several founders who have made their mark in the industry by starting their businesses from scratch or are directors in companies that have made their mark on the industry. These include BD Shah, the founder of Bidco Africa – the diversified food company; Kimani Rugendo of Kevian Kenya Ltd – the beverages and food company; Chris Kirubi, Chairman of Centum Investments – with investments in the beverage manufacturing and retail; Muhoho Kenyatta, Executive Chairman of Brookside Dairy – the biggest dairy company in the region; and Hirtesh Shah, CEO of Sigma Feeds – the animal feeds company. Others are Tabitha Karanja, CEO of Keroche Breweries – the only major local brewery in Kenya; Bharat Patel, CEO of Vegpro – the horticulture exporting company; and Binoy Zachariah, Founder of Bio Food Products – the specialist dairy company; Bimal Shah, CEO of Broadways Group – the bakery and milling group and Bharat Shah, Vice Chairman of Kenafric Industries – the food and confectionery giant; and Nick Hutchinson, the CEO of milling company Unga Group. These industry leaders, who represent the broader food and feed industry, including the bakery, dairy, milling, animal feed, beverage, horticulture and confectionery sectors are not only leaders in their companies and organisations, but the industry at large and continue to be involved in the day-to-day

issues affecting the industry at local, regional and international level. Their companies have also provided vital employment to a large number of talented individuals who will surely keep Africa’s food industry flag rising past the times they will be involved in the industry. The other set of winners have made their mark in the academia and NGO world, either through research or working at high levels with organisation that have improved the capacity of the Continent to feed itself, as its population grows and climate change takes its toll. These leaders, all women, include Prof. Ruth Oniang’o, a long time Professor of Nutrition and at Director Nestle SA; Anne Mbaabu, the Director, Market Access Program at AGRA and Dr. Florence Wambugu, the CEO of Africa Harvest. Abdul Farah, CEO of Chemicals & Solvents and Lau Larsen, CEO of Promaco represent supplier organisations that have over the years supported a young industry to grow, when supplies to the industry including chemicals, ingredients and equipment were difficult to find in the region. Without the tenacity and vision of these early investors in the supply of key inputs into the food industry, the industry could have struggled to be. The organisers of the Food Business Africa Industry Excellence Awards, FoodWorld Media, is proud of these individuals’ contributions to the industry and the broader economy in the region. By bestowing these awards to each of the recipients, we hope we can ensure that their contributions can never be forgotten for years to come. FOODBUSINESSAFRICA.COM


FOOD BUSINESS AFRICA INDUSTRY EXCELLENCE AWARDS | WINNERS

Bimal Shah, CEO, Broadways Group receives his award from Marta Rutynowska, Regional Sales Director, Bosch Packaging

Nick Hutchinson, CEO, Unga Group receives his award by Julia Otaya, Regulatory & Scientific Affairs, Coca-Cola Central, Eastern & West Africa

Binoy Zachariah, Founder of Bio Foods is proud to recieve his award from Peter Wathigo, Market Developmet Manager, DSM Nutritionals Products

Stanley Wafula receives the award on behalf of his CEO, Lau Larsen of Promaco, from Erick Nkanata, Business Development Manager, DNV GL

Kirtesh Shah, CEO of Sigma Feeds is given his award by Charity Magwenzi, R&D Manager, Capwell Industries

Dr. Florence Wambugu, Founder and CEO Africa Harvest receives the award from Sarang Sirdeshpande of Forbes Marshall

BD Shah, the Founder of Bidco Africa is glad to receive his award from Shaheeen Lilani, Director at Norda Industries

Lawrence Njenga, Head of Communications at Keroche Breweries receives the award on behalf of Tabitha Karanja, CEO, from TRM, CEO Bidco Africa

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INDUSTRY AWARD CHAMPIONS & AFMASS DINNER SPONSORED BY NESTLE

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INDUSTRY AWARD CHAMPIONS | PROFILES Brimji Depar (BD) Shah – Founder, Bidco Africa BD Shah has guided the region’s diversified consumer goods manufacturer to be the leader in many product categories together with his two sons, Vimal and Tarun Shah, with the company’s products available in 17 countries. Bidco started by setting up a garment manufacturing company in Nyeri town in Kenya’s Central Province, before moving into Thika town originally to set up a soap plant, which later moved into fats and oils refining in 1991. Bidco aggressively grew, acquiring Elianto and Kimbo brands from Unga Group and Unilever respectively in 1998 and 2002.

The company, which has manufacturing operations in Kenya, Uganda and Tanzania, rebranded as Bidco Africa in 2015. With over 65 years experience, BD Shah still has abundant passion for the industry. However, the company has entered a transformative stage, when recently BD Shah relinquished his Chairman role to his son, Vimal Shah. The company has a new CEO, Thiagarajan Ramamurthy (TRM), the first non-family CEO, as Bidco Africa plans for future growth into Africa. Bidco Africa is currently in the process of expanding into the beverages sector.

Chris Kirubi - Chairman, Centum Investments Chris Kirubi is the single largest shareholder in Centum Investments, a diversified investments group within an array of industries including agribusiness and consumer goods manufacturing and retail. Through Centum Investments, Chris is an influential investor in a number of companies: Nairobi Bottlers and Almasi Beverages, number one and two Coca-Cola bottlers in Kenya; NAS Servair, the travel catering

business that serves major airlines from Kenya and King Beverage Ltd, a distributor of Carlsberg beer in the country. The company recently sold its stake in alcohol producer Kenya Wine Agencies Ltd. In the agribusiness sector, the company’s Greenblade Growers Ltd is an up and coming producer, packer and exporter of fresh produce and herbs into the European market; while in the retail sector, the company’s latest investment in the Two Rivers Mall, will change the face of food retail in the region in many ways.

Bimal Shah - CEO, Broadways Group Bimal Shah undertook a Diploma in Baking at the National Bakery School in London and was awarded a Distinction in 1979, finishing as the top student in the whole of the UK. After completing his Diploma, Bimal returned to Kenya and became fully integrated in the family business, which had just started a fully automated bread plant under Broadway Bakery, which has grown from strength to strength with constant expansions in bread production. In 1983, the family started

operating their own wheat mill to safeguard the supply of wheat flour to the bakery under Bakex Millers Limited. The company is currently in the middle of an expansion project for its wheat milling operation. Bimal is are recipient of the Head of State Commendation by H.E. President Mwai Kibaki in 2004, current Treasurer of Kenya Association of Manufacturers, Thika Chapter and was part of the Jewels of Gujarat – Leading Global Gujarati Personalities – publication in 2015.

Kimani Rugendo – Managing Director, Kevian Kenya Ltd Kimani Rugendo tried his hands in politics before venturing full-time into his company, Kevian Kenya Ltd, the makers of Pick n’ Peel juices, Afia fruit dink and Mt. Kenyan drinking water, that he says was the first brand of bottled water in Kenya. Kevian has grown from its humble beginnings at the Ngon’g Road, Nairobi, Kenya factory to a two-plant company, with

the second plant located in Thika town some 40 km from Nairobi, opened in 2005. The company’s products are found in most of the Eastern and Central African countries. Kimani has not completely forgotten his advocacy roots though, as he is the current Chairman of the Association of Kenya Suppliers, an advocacy body that has been involved in getting the voice of manufacturers heard by the government and major retailers, as the retailers struggle to meet their obligations to suppliers in Kenya and beyond.

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INDUSTRY AWARD CHAMPIONS | PROFILES

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Nicholas Hutchinson – Group Managing Director, Unga Group Nick Hutchinson joined the Unga Group as the Group Managing Director of Unga Holdings Limited in September 2000, when Seaboard Corporation took a minority interest in the company. Trained at the University of London and with many years of business management experience in East Africa, Europe, North America and South Asia, Nick has been instrumental in the reorganisation of Unga Holdings into a focused human and animal nutrition and animal health company. He has been an important influencer and trainer of a huge number of millers and other professionals in the milling sector, many of who are managers and investors in the wider

food and feed industry in the region and beyond. Under his leadership, Unga Group has diversified and grown its business into Uganda and Tanzania where it processes human and animal nutrition products. It has also recently taken a controlling interest in leading specialty bakery products producer, Ennsvalley Bakeries. The company has also introduced a range of packaged grains to meet rising consumer demand. Nick is the current Chairman of the Cereal Millers Association, the advocacy body that lobbies for the interest of the milling sector in Kenya. He has been in the limelight in the last few months as Kenya has faced challenges with maize flour availablibity due to drought.

Muhoho Kenyatta – Executive Chairman, Brookside Dairy Muhoho Kenyatta started Brookside Dairy in a farm not far from Nairobi city in 1993. The dairy has since grown to be the biggest dairy in the region producing a range of dairy products including milk, yoghurt, cream and butter for local and regional markets. Celebrating its 25th year this year, Brookside has grown under the leadership of Muhoho to straddle the dairy sector in the region, with operations in Uganda after buying out Sameer Agriculture & Livestock dairy in 2015. The company’s products are

however available beyond the two countries, including Tanzania and other countries in Africa. The dairy giant has strong regional ambitions in several countries. Brookside Dairy is currently 40% owned by Danone, the world’s leading food and beverage company, and has plans to grow into the regional dairy market with a focus on Eastern and Central Africa. Danone’s influence is already evident, with the dairy zeroing in on its yoghurt business, one of Danone’s key focus products, with the dairy introducing a new yoghurt brand Fruitness and new packaging for its Delamere brand.

Prof. Ruth Oniang’o – Professor of Nutrition & Director, Nestle SA A career nutritionist, Professor Ruth Oniang’o has been instrumental in the training and mentoring of more than a generation of scientists and researchers in food and nutrition science and practice, having taught at the Jomo Kenyatta University of Agriculture & Technology ( JKUAT) and Kenyatta University. Ruth is presently an Adjunct Professor at the Friedman School of Nutrition

Science & Policy, Tufts University, Boston, USA and Chair of the Sasakawa Africa Association (and organization started to address sustainable agriculture with an aim of boosting food security in Africa) and Founder and Editor of the African Journal of Food, Agriculture Nutrition and Development and Rural Outreach Programme, an NGO. Ruth is currently the only African Director at Nestle SA, the world’s largest food and beverage company.

Anne Mbaabu – Head of Markets & Harvest Management, AGRA Anne Mbaabu has extensive experience in the private sector food manufacturing and marketing companies, having served as the former CEO at Proctor & Allan, the breakfast cereals processor. Anne was the first Executive Director of the East Africa Grain Council (EAGC), a member-based organization of stakeholders in the grain trade with the aim to establish a structured grain trading system in Eastern & Central Africa that ultimately improves the status of farmers, suppliers,

processors, traders and consumers. Anne has also served as a senior consultant for UNIDO in Tanzania; managed Unga Group’s animal feeds business as well as being the Group Business Development Manager. Previously, Anne served for about 16 years at CPC International, leaving as the Operations Manager. At AGRA, Anne’s role has included establishing or improving value and supply chains, agricultural productivity, and agribusinesses and managing post-harvest loss.

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FOOD BUSINESS AFRICA INDUSTRY EXCELLENCE AWARDS | WINNERS Bharat Shah – Vice Chairman, Kenafric Industries Bharat Shah has guided Kenafric Industries from its days as a footwear producer to the region’s leading manufacturer of confectionery, snacks, ready-to-drink juices and culinary products. With over 25 years at the helm of the company, Bharat has guided the family owned business into new ventures, including entry into the confectionery business, where Kenafric Industries is the undisputed leader with regional influence and distribution. The

company acquired the previously foreignowned CGB Foods, makers of OYO culinary products to diversify its portfolio of products. The company in early 2017 sold a 40% stake of the food and confectionery products to two strategic investors to enable the company grows its focus into the broader regional market. Bharat is currently a Director at the Kenya Association of Manufacturers, where he advocates for the interests of the manufacturing sector, including the food industry.

Kirtesh Shah – CEO, Sigma Feeds Kirtesh started Sigma Feeds as a small animal feeds company before the animal feed sector was a vital industry in Kenya and has grown the company to be one of the most critical players in the industry that has gained increasing importance due to the increasing demand for milk, fish, poultry and pet food. Sigma Feeds, which has a new factory on the outskirts of Nairobi, has worked closely

with farmers through various cooperatives, farmers groups, associations and the government to promote increased production and food security in the country in Kenya over the years under the direction of Kirtesh. The company also runs a demonstration dairy farm, where farmers are trained on good practices. Kirtesh is a recipient of the Head of State Commendation from the Government of Kenya.

Binoy Zachariah – Founder, Bio Food Products Binoy Zachariah is a trained miller who ventured into dairy processing some 27 years agro, establishing Bio Food Products, the region’s specialist dairy manufacturer famous for its Bio stirred fruit yoghurt products. Binoy started out in the milling industry as the Production Manager at the Milling Corporation of Kenya in 1979 before moving on to Unga Millers as the Group Technical Advisor in 1981 till 1990, when he founded Bio Food Products. He is also the Technical

Director at Bio Consult, which installs milling machines in the region and is a representative of several companies within the Stern-Wywiol Gruppe of Germany for the sale of enzymes, flour improvers and vitamin premixes for the flour milling, dairy, sugar production and food sectors. From humble beginnings, Bio Food Products has grown to be the producer of high value fruit yoghurts, cream, drink yoghurt, fresh milk, honey and eggless mayonnaise. Binoy sold a majority stake in Bio Foods to

Tabitha Karanja – CEO, Keroche Breweries Tabitha Karanja started Keroche Industries in 1997 originally to produce spirits and fortified wines before venturing into the beer industry. Her beer venture, Keroche Breweries, was the first locally owned major brewery in Kenya, with the latest investment being a 100 millionlitre brewing capacity expansion project that has given the brewer the muscle to compete in the highly capital intensive industry. Tabitha has been recognized for her contribution to the cause of local industrialization both in Kenya and abroad by various organisations and the Kenyan government. These include the Moran of the

Burning Spear in 2009 and the CNBC Africa Businesswoman of the Year. Mrs Karanja in her speeches repeatedly avers, “Africa is rising. We can all do it. We must be brave enough to get out of our comfort zones, take risks, think big, be innovative and remain focused on the big picture.” In 2014, Tabitha launched the Keroche Foundation, which addresses the knowledge and experience gap that confronts young Kenyan entrepreneurs. The Foundation’s Academy connects top accomplished Kenyan entrepreneurs with young mentees who are inspired, connected and guided towards overcoming personal and business challenges that plague young businesses.

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INDUSTRY AWARD CHAMPIONS | PROFILES Dr. Florence Wambugu – CEO, Africa Harvest Foundation International Dr. Florence Muringi Wambugu is the Founder, Director and the CEO of Africa Harvest Biotech, with with offices in Nairobi, Kenya, Johannesburg, South Africa, and Washington, D.C, USA. Dr. Wambugu is a renowned agricultural plant pathologist with specialization in virology and genetic engineering, with over 30 years experience in agricultural crop research. She has made significant contributions in research, development and improved production in maize, pyrethrum, banana, sweet potato and forestry in Kenya, with the biotech Tissue Culture Banana Project, which

has positively impacted thousands of smallscale farmers in Kenya and Eastern Africa, being one of her stand out projects. She is a strong believer in the power of biotechnology and has participated in many international forums in support of biotechnology in Africa to increase food production. Currently, she is serving as a Council Member of the Japan Science and Technology in Society (STS) Forum, a Steering Committee Member of the European Action on Global Life Sciences (EAGLES) and a Science Board member of Bill and Melinda Gates Foundation Grand Challenge in Global Health.

Lau Larsen – Founder & MD, Promaco Lau owns and leads two companies that deal directly with the food industry in the region: Promaco and Prolab Promaco represents a number of international brands as distributor of dairy ingredients and processing equipment including cultures, flavours and colours, storage and processing systems. Prolab, a specialist laboratory, offers laboratory testing

services for the food and agro industry. Lau, who worked for many years in a variety of positions for a Denmark-based multinational company, initially based in Kenya with stints in Tanzania and Asia, has been a critical contributor to the growth of the food industry in the region, where the company also has offices in Uganda, Tanzania and Rwanda.

Abdul Farrah – CEO, Chemicals & Solvents Abdul Farrah was the founder of Chemicals & Solvents, a supplier of ingredients into the food, pharmaceutical cosmetics and other industries. Founded in 1989 by Farrah, the company has been active in supplying the industry in broader Eastern Africa as a representative

for a number of international firms, providing small, medium and large corporates with internationally-sourced, locally-available ingredients that have been critical in growing the industry. Chemicals and Solvents was acquired by Dutch ingredients distribution company IMCD, with plans to improve its footprint into sub-Saharan Africa.

Bharat Patel – Founder, VP Group Bharat Patel started Vegpro in 1980. The company that has since rebranded to VP Group has eight divisions, one of which, VP Food is the largest producer and exporter of fresh produce from Kenya. VP Food has six farms in Kenya and manages over 1700 smallholder farmers in the country, growing and packing a wide variety of vegetables, mainly to the European market. With expanded operations into Ethiopia and

Ghana, VP Group continues to impact the broader industry in Africa, beyond the food industry into horticulture and other sectors Mr. Patel’s contribution to the growth of the horticulture industry in Kenya and increasingly, Africa has been a key driver to the economic importance of the food and horticulture industry in Kenya and the region.

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INDUSTRY AWARD WINNERS | INTERVIEWS

Kirtesh Shah

Managing Director, Sigma Feeds Ltd product lines targeting the animal feed industry - we started with poultry, dairy, pigs, pet food, rabbit feed and now we are going into aquaculture feed. Very soon we will be launching ready to eat pet food.

Please give a brief history of Sigma Feeds Sigma Feeds started in 1984 with a small feed mill producing 500 kg per hour at Ideal Farm in Karen, Nairobi Kenya. As the demand of the animal feeds increased, we began increasing our investments in tandem with rising demand. In 1987, we put up a 5 tonnes per hour feed mill producing extruded soya and micronized soya as our initial innovation supplying mainly to the biscuits industry. In early 1990, we set up our first pellets plant mostly used for making dairy and broiler feeds, to provide farmers with pellets, which reduces the consumption by chicken by 20 per cent. In our latest venture, the introduction of the Economic Stimulus Programme by the Government of Kenya a few years back that focused on aquaculture in the country created market feeds targeting the aquaculture industry. We therefore launched our 4 tonnes per hour aquaculture extruded fed plant in 2016. We have further boosted our public private partnership with the government when we recently launched the tilapia and cut fish research project in partnership with Kenya Marine Research Institute. What are some challenges of being a start-up did you face at the start? Yes, capital was a big problem at the initial stages and banks were not willing to help. We had to deliberately put money aside for expansion purposes as the business grew and made profits. Our suppliers of raw materials were of great support by supplying us on credit of up to 30 days. It is notable at the moment that the FOODBUSINESSAFRICA.COM

government is focusing on the agriculture sector. I frankly commend the effort of the government in reducing interest rates for businesses like ours. Over the years technology has evolved in the agricultural sector, has it been easy to get equipment through or get the right technology you really want to use? Availability of the right technology was a big challenge, but through reading books and making visits to countries in Europe and America, we were able to bridge the technology gap. With the high cost of almost everything ranging from electricity to costs of raw materials, finding the right technology is key to reducing costs of production. In the past, equipment used to come with very big motors, but now with new technology, our cost of power has reduced by almost 50 per cent. What has been the secret behind the success of Sigma Feeds? Quality! Quality! Quality! If you make something good that makes your clients happy and profitable too, they will always come back and give you referrals. Quality and consistency is therefore the key factors to succeed in the industry. Another reason we have been successful is the fact that we have been focused on the animal feed industry for more than 30 years. Not many entrepreneurs can remain focused on one sector of the industry for such a long tine – very soon you find them branching into areas that they have no idea about. However, even as we have remained focused, we have also diversified into several

How do you think Public Private Partnerships need to be structured around the agribusiness sector to boost productivity? When we do these partnerships together, a lot of costs are reduced and there is room to explore and expand with the synergy created. The private sector has invested heavily in modern technology with high production capability. Communities around the sector also need to be brought on board and projects initiated to benefit all the people in the industry. Public private partnerships, like the one we are working on with the Kenya Marine Research Institute, hence create synergy and eliminate duplication of roles. How important are these kind of awards to an entrepreneur like yourself? If I can improve someone’s life, I can be very fulfilled. The awards are recognition of hard work, which motivates me to continue improving people’s lives. I have worked for nearly 35 years in partnership with the Agricultural Society of Kenya receiving the Long Service Award presented by the President of Kenya Mwai Kibaki some years back. During the 50th Madaraka Day celebrations in 2013, I received the Head of State Commendation from President Uhuru Kenyatta. Your organisation have also awarded me the Industry Champions Award in recognition of my contribution in the diary and feed industry. All these recognitions are a great motivation to continue improving lives. I am very pleased. As the founder and CEO of Sigma Feeds, how have you succeeded in business in your locality? I have created a good name with the neighbours where I work and by putting up a school in the area, working with the church organizations and creating jobs for the locals. I also prioritize the wellbeing of my employees. We also have a 100 dairy farm that provides the neighbouring community with employment opportunities FBA

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INDUSTRY AWARD WINNERS | INTERVIEWS

Bharat Shah

Vice-Chairman, Kenafric Industries Ltd running a business: the challenges, obstacles, financial difficulties and many other logistical nightmares. But you learn as the business goes through these challenges and as the business grows. When you have perseverance, a clear goal and a dream, you will put the dream to reality. Our real focus was after 2000. From inception up to 2000 we were learning the grips of expanding and making our products. The big game changer was when our export markets started growing between 2000 and 2005. From 2005 to 2014 was a good period for us, when we really established the business and built our capacity and market reach. We are now in a stabilizing phase. We have had one or two failures and are now recouping from these failures. Soon we are launching a biscuit line, which will be our new edition and you will be hearing good news in time to come.

Please share with us a bit of where Kenafric Industries is coming from and where it is going as a business First, I really appreciate your giving us the award and the plans you have with this initiative. It is a brilliant idea of giving industry leaders the recognition that will motivate them and others to join the industry and create more jobs into the economy. Coming to Kenafric Industries, we started in 1988 Kenafrica Footwear. In 1991, we changed the company name to Kenafric Industries where we started confectionery line. The confectionery line started with hardbody candies in 1991. We added bubble gum in 1993 and kept on expanding our operations. In 2000 our exports was 0 per cent and by 2005 we had 60% exports due to the EEPO scheme which is now called duty remission scheme under the East African Community (EAC). The EEPO scheme really encouraged exports riding on our company’s focus on quality competitiveness, good attractive packaging, marketing, good sustainable supply chain and other various factors. We then started our chewing gum line and our chocolate line much more recently. The chocolate line has, however not done well. Thereafter we bought out Oyo Mchuzi 38

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mix a company that was making savoury food products from the multinational CGB Foods. Our footwear trading was expanding all those years. Our confectionary business became one of the leading confectionery companies in Eastern and Central Africa In 2010, we introduced a stationery business line to expand our portfolio of products and this year, we have separation out one of our business units, separating out the confectionery and foods business, where we have some brought in two equity partners to work with us to grow in the East African region, after we are confident that we have adequate stability to grow into the region. Please expand on the new partnership In the current structure, the confectionery and food business, including the OYO Mchuzi Mix line, are under one company, where we have partnered with two equity fund companies: Amethis Finance from France and Metier from South Africa. Having faced the challenges of being small at the start in 1988, at what point did you feel that the business was finally on the path to success? Every business has its learning experiences, including failures. That is the beauty of

The company has been much of a family business, of course just recently getting out the food side into equity partnerships. How critical has been the family for the growth of the company? For entrepreneurs, the family is vital for success. As a family you use the resources available within the family hence avoiding a lot of costs in the business. In case of an opportunity or challenge, you can also meet and take a quick decision based on available facts without wasting much time. Once you are involved as a family, all those involved get to know the nuts and bolts of the trade and of the industry. For business to succeed, it is important that the entrepreneurs know the business well, so that when professionals are finally brought to the business, the owners can guide the new managers on the right way to manage the business. Family businesses are therefore very important. The family has been the pillar of our success and in today’s world the family is still the pillars of the small and medium sized business sector and even some very large corporations are still family owned. A number of family owned companies are of course continuing to go public or have external managers join them at some point. The journey is a learning curve likened to going from nursery to university, where at the university level you start thinking differently

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FOOD BUSINESS AFRICA INDUSTRY EXCELLENCE AWARDS | WINNERS Going forward, are you planning to establish factories in the region or just growing your exports from Kenya? With our new partners, Amethis Finance and Merier, we all have a similar vision. Where we can establish an economic sense out of Kenya for a project, we will establish new plants in those countries. Where we can’t, we will continue to do marketing, subject to cost. Africa unfortunately has very high transport costs plus logistical and infrastructure challenges. A container comes all the way from India at US$800 whereas from Mombasa to Nairobi is about the same amount. This is one of the biggest problems in our pursuit for regional growth.

For business to succeed, it is important that the entrepreneurs know the business well, so that when professionals are finally brought to the business, the owners can guide the new managers on the right way to manage the business. Bharat Shah, Vice-Chairman, Kenafric Industries Ltd

If Africa grows its infrastructure like the recently unveiled Standard Gauge Railway (SGR) in Kenya, we will all enjoy the fruits of the growth to make us competitive in the region and beyond. The world is competitive: you are fighting against the world, not against your neighbour. Remaining competitiveness is key for the growth of Africa’s industry. If you look at success stories of countries such as Japan, UK, China, India, Vietnam, Malaysia, and Bangladesh among others, they all have a manufacturing base from where they grew their economies. That is where jobs are created. We are blessed with agriculture in this region. Therefore, manufacturing in agriculture with value addition can be a big plus. Governments need to focus on certain things. Job creation is number one priority because jobs will actually spur economic growth of the country. We now have oil in the region, which in the next few years will help the region reduce foreign exchange demand. We also have young, brainy university graduates who need to be harnessed. The world is changing very first. We could do without a landline FOODBUSINESSAFRICA.COM

a few years ago. Today, without a mobile phone, it is becoming a nightmare. What is going to happen in the next 25 years? We are seeing the Internet of Things – how can we contribute? You have talked about chocolate being a challenging part for your company, why has this been so? There are three things I think. The first one is culture. I understand from talking to a number of people that African men don’t like eating chocolate in front of any one you can correct me if am wrong! Secondly, eating of chocolate culture has not developed here. And the third cause is that chocolate is not a cheap product. I do believe that we were 10 years or 15 years ahead of time, even though we did a lot of research. Research, where a concentrated group of people is used, may not deliver every time. Chocolate culture may come after few 15-20 years. I mean, just like fast food, we never ate fast food - all these things are changing rapidly. As a member of the Kenya Association of Manufacturers (KAM), do you feel the industry still stands together in lobbying and engaging the Government and how would you like it to be in the future? I must say the government has been very receptive to KAM because our advocacy proposals also go with solutions - we just don’t go to the government with problems. We have a good secretariat with good volunteers who have helped us a lot in dealing with the government. It has also impacted in our results. We have been very successful in getting a lot of results through persuasion, discussions and consultations, by setting our priorities and demonstrating why any policy changes are important for business. We must appreciate the technocrats in the government including the members of parliament who have been listening and who do take our views seriously. At the personal level, what has been some of your success pillars that you can share with young people getting into the industry? The first pillar is to set the goal. Number two is to plan how to achieve the goal. And the third one is hard work. There is no success without hard work. I will also add that one of the pillars of success is failure. The word FAIL means First Attempt In Learning. In failing, we learn a great deal, and the

experience of failure can be the best teacher. I can’t forget Focus! Focus! Focus! And finally, seek mentors. A lot of companies are opening up in the region. Has that impacted your regional market share? Not really. Of course we want to see the East African Community region get industrialized. Yes, competition is there. Industries are coming up in these neighbouring countries and in the region but remember that the markets are also expanding. We are also members of COMESA. In a few years, the EAC, COMESA and SADC will be one free trade area - that is a 600 million people market. In the next 10 years the whole ball game will change. As a country, as a sector and as a company we have to decide where we are strong at and concentrate on and not be jack-of-all-trades. We only need to focus on the region to make it a friendlier business environment for movement of goods and services. A lot of progress has happened and it being a journey, it is ok to have some ups and downs before success is achieved. What is your parting shot? Life is Exp + Exp + Exp. Yesterday was Experience. Today is Experiment. Tomorrow will be Expectations. Life is all about creating yourself and finding yourself. This is the message for the young generation. Expectations are there. You will learn through experience. There are experiments you are to do and tomorrow you will be talking as I am talking today FBA

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FOOD BUSINESS AFRICA INDUSTRY EXCELLENCE AWARDS | WINNERS

Binoy Zachariah

Founder, Bio Food Products Ltd is still with me in the company today that we can now start doing a decent product. Our big breakthrough came in 2 years later when Nairobi Airport Service (NAS) said they would want to try our yoghurt and they began putting it on their flights at some point. This is when I saw some light at the end of the tunnel and it started getting interesting.

How did you come up with the concept of Bio Foods and what was in your mind then? I started Bio Foods about 25 years ago. You won’t believe, it but the idea was born when I was flying in the plane over Switzerland. I am actually a grain-milling engineer by profession. While I was working for Unga Group as the Group Technical Advisor, there came a time I felt I needed new challenges. During those days we had a lot of problems in Kenya in the sense that access to foreign exchange was a problem, getting licences was a big challenge and there were a lot of goods in the market which were not readily available like they are today. Having lived in Germany for a long time, I was very fond of yoghurt - but that was a dormant idea within me. While flying over the Swiss Alps, I was looking at the snow below me and somehow yoghurt and milk came into my mind. “Why not produce a stirred fruit yoghurt in Kenya?” I asked myself. And that is how the idea was born. It sounds very simple but as I went on, I started drawing plans for it with limited or almost no financial support. What challenges did you face when starting the company? The biggest challenge, which I did not recognize, was that I was so naïve. Naïve to think that it would be quite easy to produce yoghurt out of milk like we do it back home. Naivety was therefore my first challenge. Going into a more realistic situation in Kenya at the time, I did not have the technical knowhow about making yoghurt. 40

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I had to do a lot of reading and with my own imagination I started putting some very basic machines together - fabricating them locally. The only thing I decided to import was a packaging line and two container loads of colourful cups. When I say colourful at the time it was a three-colour print. Packaging sells! I got that from Switzerland along with the machine, packing line and the aluminium foil lids because nothing of that was being done here locally. And I got started with no money in the pocket. We started with just three guys in our chicken farm in Lang’ata area of Nairobi. Everything was restricted at the time, so was my knowledge about yoghurt making. Even getting import license for the container we imported was a huge challenge. When did you think your idea was bankable or when did things seem to be working? Was there ever been an easy time really? I don’t know. Right up to last year, times have always been challenging but they have always been fun. For the first 4 years we were just playing around. Playing around with introducing bacteria into the milk, trying to convert it to yoghurt, seeing how viscosity and other things kept changing, without really knowing what was going wrong. I started realising that I knew very little about this whole story. So I brought in an expert from Netherlands who helped us for about three months before things began making sense. About 4 years later when I got a gist of it, I told my Production Manager, who

Bio Food’s strategy has been to be remain focused on a small, niche market segment. What made you focus on this kind of strategy, instead of growing into a big player with many products? I would say it is my character itself. I have always believed in perfection. If you do something, do it right with no compromises. I believe this to such an extent that I am a pain on the backside for a lot of people who know me. There are so much of substandard products in the market. At the time we started the company, people would call any kind of fermented milk as yoghurt. I said no! We want decent stirred fruit Yoghurt without compromise. It is therefore always the policy, my policy and that of the company to produce only the best for a niche market and not compete with products. How have you managed to pass this kind of thought process to your team? As we started settling down with a decent product, the team had to expand. Teaching the staff to think like me has perhaps been one of the biggest challenges because it is a totally different shift of mindset. It was also different to the culture at the time when people were used to a lot of different ways of working. This has always been an on-going challenge right up to today. As you know, you can never stop improving. We are always evolving as human beings and we are always influenced by external factors. Every single day we are all the time teaching, training and bettering the team. I am proud to say that I have been commended a lot of time by various visitors from both within Kenya and outside. After spending a day here, they have said that I got a remarkable team, besides the product. I hence think we have done something right. I am also proud to say that especially in production, almost everybody who joined us is still with us today with special mention of our Production Manager who was my first employee. FOODBUSINESSAFRICA.COM


How have you managed to retain your employees for such a long time? The answer is very simple. Treat them with humility and respect. Teach them. Pay them fairly and give them a very good working environment, which I believe we have. Another major factor has been that every time when the company has struggled to survive, I would set an example. They have seen throughout that I am not the kind of boss who would be driving to work in a Mercedes while they are living in misery. I would always be the first to sacrifice more than everyone else. To give you a small example, I was the last person to give myself a company car when the company could afford company cars. How do you now feel as you step back from the helm of the company? I stepped back in the sense that I sold a majority stake in the company. I am still here though. Looking back at all those years, I think I served my purpose, which was not making money. It was more to create a respectable brand. We have a super brand today, which is highly respected and known for quality. We are the Davids fighting the Goliaths who have become very aware of our presence. That was my major aim, purpose; I have achieved it and thanks to the new shareholders who have taken over the company, they can ride on that success. What kind of changes and trends in the dairy industry in the region do you probably see in the next 10 years? Dairy industry in Kenya is in relative terms very large. I believe Kenya has the highest production of milk per capital on the African Continent. The yield of milk per cow is however far less than half of that of Europe. That in it self shows that there is plenty of opportunity to improve. In terms of production and products in the market, I am proud to state that we are perhaps the only company in the market, which can assure the end consumers that they are consuming a product free from preservatives, antibiotics and Aflatoxins. This is an area that requires a lot of improvements nationwide. With the growing population and the growing middle class, there is a lot of opportunity for innovation, growth volume wise and improvement quality wise. I therefore think it is very promising. What advice would you give somebody wanting to get into the dairy sector? First and foremost, don’t do the mistake that I did - getting into it when you are not being a dairy person, because then you go through a very steep and expensive learning curve. If you have money to invest, ensure you are a dairy person - dairy technologist. That helps a lot. And secondly, don’t do it if you want to make quick money. There is no quick money in diary. Do it if you are passionate about milk or cows or food in general. But if you are not passionate, forget it. How important was your technical training in your kind of success bearing in mind that engineers think differently? Sure. We engineers make things happen. That is what engineering is all about. I definitely think it was an advantage. But as I always tell people I interview, the first thing I look at in a person whom I am taking on or wanting to take on is less what he is qualified in but more I try to feel out whether he has got common sense. And I think I have a lot of common sense, which has helped me more than my technical background FBA FOODBUSINESSAFRICA.COM

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INDUSTRY AWARD WINNERS | INTERVIEWS

Kimani Rugendo

Founder & CEO, Kevian Kenya Ltd every supplier. We are however looking into ways and means of finding a solution for the retailers that will provide a win-win outcome for all concerned. Through the Association of Kenya Suppliers we have now brought the landlords, the banks and other suppliers on board and to look into ways of restructuring the debts. I can proudly say that we have successfully managed to come up with a solution for Uchumi - a strategic equity partner has been found to take over a stake in the retailer, ensuring that it will be up and running in a short while. Briefly tell us about Kevian Kenya Ltd Kevian Kenya Limited was founded about 22 years ago initially to produce bottled water. We started bottling Mt. Kenyan drinking water with very little sales then because people did not know why they should buy bottled water. As time went by, we realized that we had very good portable water. That is how we came up with Pick n’ Peel and Afya juice brands. Our business model is founded on smallscale farmers. We have continued working with these farmers and found out that there was other produce that had been going to waste and therefore came up with sauces, ketchups as well as soup products. We have also successfully produced avocado oil. What challenges did you face when starting out? The biggest challenge for any manufacturer then and even for us was raising capital, because nobody believed that we would get to where we are now. The interest rate at the time was very high between 28%-32%. With this high rate you eventually would find that you are actually working for the bank! As time went by, we were able to prove ourselves and managed to convince a German Bank called DEG, which gave us capital to boost our business. That is how we were able to buy our state-of-the-art equipment both for extraction and for filling juices. Local banks have also supported us. At what point did you think that you have gone through the very turbulent times and things were getting a bit better? Well. Things have never been very good. Business is full of challenges. You find like now the supermarkets are having a downturn and are not paying suppliers 42

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entirely or meeting their promised payment dates. However, perseverance is the name of the game, How critical is your Thika factory? The Thika Factory is where we do extraction of fruits to convert to concentrates. In that factory we do 200 tonnes of fruit every day when the fruit is in season. We contract small-scale farmers by use of mobile phones or through farmer groups countrywide to give them delivery and payment programs. In addition to crushing of fruits, we also fill juices for exports both in tetra packs and PET bottles from there. Sauces and ketchups are too produced at the Thika Factory plus the extraction of avocado oil. The Ngong Road factory does filling of water, as well as filling of juices in PET and tetra packs. How wide is the market for your products? Our markets go as far as South Sudan, Uganda, Rwanda, Burundi, DRC, of course Kenya, Tanzania and going down to Zambia. Which export markets are critical for you in future? Zambia is a very good potential market for us. In fact, it is one of the markets we are considering in our expansion program – plus Uganda. We would like to expand and also go into processing of fruits in these two countries. What is happening in the sector? To be very honest, what happened is that the retailers decided to expand using suppliers’ credit and refused to go to the bank to borrow money for their uncontrolled expansion program. It is now beginning to bite. As you can see, they are also in trouble with the landlords and with almost

Should the government consider bailing out Nakumatt and other retailers? There are two ways to look at that. In the case of Government, they are shareholders in Uchumi. Therefore, for sure it is something that they should look at sympathetically. But Nakumatt is a family business. Nevertheless, the government has not shied away from helping Nakumatt. We have been using the Ministry of Industry as a base to look for a solution, because suppliers have already paid statutory like taxes and levies, but we have not been paid by the retailers who sell on cash. The big question is: Where did the retailers take the money? Well, that being water under the bridge, we state that as we look for where they have taken the money we also look for ways for them to remain afloat. We are therefore now negotiating with the government to come up with a retail trade regulator. With a regulator in place, we will then be able to call on the regulator and ask it to come up with a solution before we get to situations that are facing us now. What really motivates you at a personal level to remain at the helm of your company? This country requires role models. We have to come up and set an example. For a long time we have been looking up to people who don’t look like us to create employment for our people, while we ourselves have been born and given the powers to create opportunities. I am challenging fellow Kenyans to create opportunities for our young people as much as we have done. We have shown that it is possible, it is doable and for sure if we all did that, we will be able to create employment and bring confidence to our people FBA FOODBUSINESSAFRICA.COM


FOOD BUSINESS AFRICA INDUSTRY EXCELLENCE AWARDS | WINNER

Buhler’s African Milling School wins Project of the Year award

Martin Schlauri, the Managing Director of African Milling School receives the award from Mercy Chatyoka, the Quality, Safety, Health & Environment Manager, National Foods, Zimbabwe at the award ceremony and dinner.

KENYA – The African Milling School, Buhler’s training school for the milling and related industry, has won a coveted award at the recently held Food Business Africa Industry Excellence Awards ceremony. The training school won the highly regarded Project of the Year awards at the awards ceremony that was graced by some of the top business leaders from the industry in the region and beyond. The Project of the Year award is given for either green-field or brownfield projects; major expansion or renovation of existing facilities; or major line or plant automation or incorporation of new technologies. The Award is focused on highlighting some of the new projects and investments in the region - and is especially targeted at industry-changing projects that change the direction of a specific company, sector or the entire industry. “What stands out at African Milling School is the high level of investment and adoption of new technologies from Buhler and the outstanding dedication of the team FOODBUSINESSAFRICA.COM

at the school. These attributes make the African Milling School to be one of the most critical investments in the industry in Africa over the last few years,” said Francis Juma, the Founder of FoodWorld Media, the organisers of the Awards ceremony. “The effect of the Milling School on the milling, feed and related industries in Africa will be hard to measure, but am sure that it will and is already having a profound effect on building the technical and managerial skills of people in the industry beyond Kenya and Eastern Africa, to Africa as a whole,” Juma added. The training school had its first batch of trainees graduating in late 2016 after going through a two-year apprentice program. The first group came from nine different African countries and joined the program in early 2015. The second group of students is now going through the programme. “Our main goal is to be a power to the customer, to be close to our customers, to assist in the needs of daily operations. And the basic need is always skills. So our main

goal and mission is to pass skills to local people, to train them and to get the best for their company,” says Martin Schlauri, the Managing Director of the African Milling School. Martin received the award bestowed upon the School at the inaugural Awards ceremony that was held on the evening of April 26, 2017 in Nairobi, Kenya. Martin and the other winners were handed their awards at a glittering dinner and awards ceremony held at Southern Sun Mayfair Hotel in Nairobi, Kenya. The celebration-themed Awards ceremony took place together with the Official Dinner at the AFMASS Conference & Expo, which was sponsored by Nestlé. AFMASS Conference & Expo, which is the region’s leading food & beverages, milling & feed and hospitality & foodservice conference and expo, took place at Visa Oshwal Centre in Nairobi on April 25-27, 2017 FBA

AFMASS 2017 REPORT | MAY/JUN 2017

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APRIL 25-27, 2018 NAIROBI, KENYA

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Welcome to Africa’s only technical and commercial conference dedicated to the latest technologies in post-harvest, processing, packaging and food safety; and commodity markets for the region’s grains, milling, baking and animal feed industry. Sign up to today for educational sessions, field visits and while meeting and networking with industry leaders, Goverment regulators and suppliers.

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Mexico’s Bimbo Bakeries enters India Zambia begins export of maize into Eastern Africa Dangote to invest US$1bn in Nigerian rice

VOLUME 2• ISSUE 2 • NO. 4 FOODBUSINESSAFRICA.COM

A FOODWORLD MEDIA PUBLICATION

MILLING & FEED AFRICA | MAY/JUN 2017

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NEWS | INTERNATIONAL PEOPLE

AgriProtein bolsters team, moves HQ to London UK – Leading waste-to-nutrient company Agriprotein is moving its global headquarters to the United Kingdom (UK) despite the Brexit as it seeks to tap into new regulations on the use of insect proteins in feed in the European Union, which came to force beginning July 2017. The company has moved its global headquarters to London, UK and also appointed two new members to its global leadership team to drive its international business expansion. Mark Williams has joined as Group COO and Alan Corr as

Group CFO. “With the tide of European regulation starting to move in favour of insect protein for animal feed, we felt the time had come to set up our head office in Europe. We opted for London because of its unrivalled position as a global financial centre and access to international markets. Brexit is no barrier for our technology,” said Jason Drew, CEO of AgriProtein. Founded in Cape Town, South Africa, Agriprotein plans to build a network of 100 insect protein factories by 2024 and 200 by

2027 to meet the rising needs of the US$100 billion aqua feed market around the World. As COO of AgriProtein, Mark will drive the global roll-out of new factory projects, hiring senior talent and engaging with financial markets as the company continues to grow, while Corr’s task will be to develop the Group’s corporate and financial structures across a wide range of jurisdictions while maintaining a high standard of corporate governance, according to Jason.

INVESTMENT

Bühler builds innovation campus in Uzwil, Switzerland

SWITZERLAND – Swiss technology leader Bühler has revealed plans to build an innovation campus in Uzwil, Switzerland to accelerate the delivery of the company’s ‘vision of innovations for a better world and to bring the benefits of the digital age to our customers.’ The CHF 50 million (US$ 52 million) will

commence in be end of 2017, with completion expected to be in the beginning of 2019. The investment includes a collaborative center and upgrading of technology labs. “We aim to drive business growth through innovations that contribute to a better future for many more generations to come”, says Stefan Scheiber, CEO of Bühler.

“Sustainability is at the core of our innovation and our actions, and with this investment we will strengthen our business focus on delivering sustainable solutions”, says Ian Roberts, Chief Technology Officer of Bühler. “The disruptive changes in business and technology represented by digitalization, the challenges of sustainability, and the need for clean mobility are now transforming the industries Bühler supports. To seize the opportunities of this transformation, the company will establish the finest innovation campus in its industry, welcoming the full ecosystem of partners, be they customers, start-ups, academics, apprentices, suppliers, the young or the experienced, to deliver a continuous output of differentiated and innovative products and services,” says the company.

M&A

Mexican top baker enters India as it focus on developing countries grows Indian move follows recent acquisition in Morocco and renewed focus on China and Middle East INDIA - Grupo Bimbo, the leading bakery group from Mexico, has taken a 65% shareholding in Ready Roti India Private Limited in India announces as it aims at expanding its tentacles into the subcontinent, which is expected to have the largest population by 2050, surpassing China. Ready Roti, founded in 1993, is the baking leader in New Delhi and its surrounding areas. The producer of packaged bread, pizza bases, and sweet and savory buns, with leading brands including Harvest Gold and Harvest Selects becomes the first investment by a global major in India’s fast growing bakery industry, that is dominated by Britannia and Modern Foods. According to ValueNotes Database, the bread industry 46

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in India is expected to grow 10% per annum till 2020 to 53 billion rupees (US$ 820 million) Ready Roti generated annual sales of approximately US$ 48 million, with four plants and more than 500 associates. “With this joint venture, the company is entering a new market, strengthening our presence in emerging markets and expanding our operations to 24 countries on four continents, in line with our vision,” stated Daniel Servitje, President and CEO of Grupo Bimbo. Ready Roti will become a part of the Organization Europe, Asia and Africa (EAA). Grupo Bimbo has turned its focus on the developing world, announcing that it

will increase its focus on China through acquisitions and into the Middle East and Africa. Early this year, it bought out Group Adghal, a producer and distributor of baked goods in Morocco. “With this acquisition we are making strides to enter the African continent. As with other acquisitions, we are initially focusing on learning the culture and the business, and sharing best practices with Grupo Bimbo’s diverse operations”, stated the President and CEO of Grupo Bimbo. The company has three production plants, more than 200 associates, and a portfolio comprised mainly of two product categories: sweet baked goods and cakes.

FOODBUSINESSAFRICA.COM


TRENDS

Maize dry milling market to be worth US$88 billion in 5 years Use of maize in ethanol production continues to dwarf its use in human and feed applications WORLD – The global dry milling market for corn (maize) is estimated to reach US$ 88.61 billion in 2022 from US$ 67.73 billion in 2017 according to new research by consultancy company MarketsandMarkets. According to the new report titled “Dry milling market for corn by end product (ethanol, DDGS, corn grits, cornmeal, and corn flour), application (fuel, food, and feed), source (yellow corn and white corn), and region - Global forecast to 2022”, the sector is expected to grow at a CAGR of 5.5% driven by the demand for a variety of corn dry-milled products from the food industry and also owing to factors such as the use of corn as one of the main ingredients in feed, and the increasing demand for corn ethanol as biofuel. The ethanol segment is projected to grow at the highest CAGR over the next

five years, continuing its domination of the sector in 2016. The report says that ethanol production has drastically displaced corn supply for food and livestock feed applications in the developed countries across the world, due to massive production of corn in countries such as the US, and its clean profile and low cost octane booster. In the US, Brazil, China, and other key producers of ethanol, an increasing production of renewable ethanol has been observed and linked to declining imports of petroleum. Yellow corn segment accounted for largest market share over white variety in 2016 driven by high demand for a clean and renewable corn-based ethanol due to its abundant production and nutrient profile that complement its usage for ethanol production of corn-dry-milling

process. Yellow corn also contributes the bulk of the total global corn production and international trade, according to the report. Regionally, Asia-Pacific is projected to grow at the highest CAGR from 2017 to 2022 due to the large number of countries with an abundance of corn production for use in rising demand for food, feed, and biofuel products. According to MarketsandMarkets, companies in this region are focusing on producing quality products by using improved and environmentally friendly raw materials, combined with innovative technical abilities to satisfy the needs and demands of customers. Several joint ventures, acquisitions, and collaborations are taking place between the global key players, which are expected to change the dynamics of the Asia-Pacific corn market.

INVESTMENT

IFC partners rice trader to boost capacity in its supply chain CAMBODIA - IFC, a member of the World Bank Group, and AMRU Rice, a leading rice export company in Cambodia have launched a joint advisory project in the country that will enable IFC to support the company over a three-year period to implement the developed Sustainable Rice Platform (SRP) standards and practices in its supply chain. In this program, IFC will train and coach at least 2,000 contracted farmers in AMRU’s supply chain in Kampong Cham Province to equip them to implement the SRP standards and practices, hence meeting the requirements of international buyers and respond to global market trends of sourcing rice products in a more sustainable manner. “IFC brings in significant global experience of delivering knowledge and

expertise in agriculture to help businesses grow sustainably and improve farmers’ livelihoods,” says Song Saran, AMRU Rice’s CEO. “Adding SRP rice fits our strategy of expanding its niche market with higher value and sustainable products. Thanks to IFC’s great support over the past years, we are delighted to work with IFC to achieve the next milestone”. The program builds on the success of IFC’s work in the rice sector, where the IFC and the World Bank are implementing a four-year project with local agricultural exporters to improve the competitiveness, build an enabling environment for the agribusiness sector, and facilitate more and higher value agricultural exports. The IFC, in partnership with the European Union and other donors, has been

supporting the Cambodian government since 2010 by working with its clients and industry associations to create industry standards, improve export procedures, promote private sector participation in the seed industry, and enhance efficiency of rice millers and re-processors. “Over the past seven years, IFC has intervened on key levels such as farming, milling and exporting to promote Cambodia’s place on the global rice market map. IFC’s support has brought about a transformational change in the country’s rice sector, increasing its export volume from less than 100,000 tons in 2010 to more than 500,000 tons in 2016,” said Kyle Kelhofer, IFC Country Manager for Vietnam, Cambodia, and Laos.

INVESTMENT

ADM to construct new flour mill in Illinois, USA USA - Archer Daniels Midland Company (ADM) has announced that it is constructing a new wheat flour mill in Illinois to enable the company to continue to meet growing demand for flour throughout the Midwest of the USA. The high-capacity, modern facility located in Mendota, Illinois in will have a daily milling capacity of 1,524 tonnes, and the ability to grind soft and hard FOODBUSINESSAFRICA.COM

wheat varieties in order to serve a wide variety of customer needs. It is targeted to begin operations in mid-2019. When fully operational, the company intends to end production at its current wheat mill in Chicago. “ADM’s new facility in Mendota will help us provide additional capabilities to meet ongoing demand growth in the Midwest, where we are seeing bakers

expand their production capabilities,” said Mark Kolkhorst, president, ADM Milling. “In addition, our new mill will enable us to drive efficiencies, thanks to the use of new technologies and equipment, and the ability to leverage capabilities of ADM’s existing grain facility in Mendota. We are pleased to expand our presence in Mendota and continue investing in Illinois.” MILLING & FEED AFRICA | MAY/JUN 2017

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NEWS | AFRICAN AGRIBUSINESS

Dangote to invest US$1bn in Nigerian rice production

NIGERIA - Dangote Group is making a fiveyear investment of at least US$1bn to grow and process rice in seven Nigerian states, bringing sub-Saharan Africa’s biggest importer of the grain closer to its goal of self-sufficiency. Dangote Rice, a unit of the Lagos-based

company, plans to increase cultivation of paddy, or raw rice, to 150 000 hectares and harvest an annual 1.7 million metric tons by 2019. Most of the output will be grown by medium and smallholder farmers through an “outgrower scheme” that would see Dangote Rice providing equipment and

training, project director Robert Coleman told ThisDay. Nigeria, the continent’s most populous country with 180 million people, imports about 2.1 million tons of rice yearly according to data from the US Department of Agriculture. The company, which is investing in the northern states of Jigawa, Kano, Zamfara, Niger, Sokoto, Kogi and Adamawa, is also planning to build mills to transform the paddy into an estimated annual 1 million tons of high-quality parboiled rice by 2019. A first set of imported mills is expected to be delivered by early December and be functional by July 2018. Nigeria spent more than 1 trillion naira (US$2.7 billion) importing food in 2015, according to the National Bureau of Statistics.The country, which vies with Angola as the continent’s largest oil producer, is turning to farming as dwindling oil income has driven the economy in 2016 to its first full-year contraction in a quarter century.

TRADE

Africa needs to strengthen food trade linkages – ZAMACE

ZAMBIA – Zambia Agricultural Commodity Exchange (ZAMACE) says there is need to strengthen food trade linkages between surplus and deficit countries if Africa is to address food shortages through intraregional trade facilitation, reports Daily Mail ZAMACE executive director Jacob Mwale has also called for a clear policy direction from governments in the region to enable grain trade in the region, calling for 48

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removal of taxation on policy exports. “There is need for policy consistency in the agriculture market as opposed to a situation where today you have a ban and tomorrow it’s lifted. The assurance by Government will boost confidence to market players and promote trade,” he said. Mwale said most countries in the southern region have maize this year and the demand is coming from East Africa. “At the moment, the demand for maize

is from East Africa, namely Kenya, Rwanda, Burundi and Tanzania. In southern Africa, Zimbabwe has sufficient maize but they may need something from Zambia later in the season. Zambia is expected to record sufficient tradable surplus this year following a record crop production of 3.6 million metric tonnes of maize,” he said. “Most African countries are not foodself-sufficient, thus imports are essential to feed their ever-growing populations. Nevertheless, the intra-regional trade is very low in Africa, and this is attributed to the complexity of trading and logistics with neighbouring countries,” he added. He said there is need for Zambia and other surplus countries to utilise the marketing opportunities prevailing in East Africa, where there is a shortage of food grains. “In Zambia, projections are that a bumper harvest will be recorded in maize production. This shows that there is need to promote intra-African trade in agricultural commodities. The Malabo Declaration clearly articulates the need to promote agricultural productivity and intra-regional trade. Therefore, we need to seek sustainable ways to address the food shortages through regional trade facilitation,” Mwale stressed. FOODBUSINESSAFRICA.COM


TRADE

Zambia begins export of US$100m maize into East Africa region SADC region to register record maize harvest with opportunities for export to region and beyond Sihlobo, a senior agricultural economist at ZAMBIA – Zambia has signed grain export Hub. trade deals for 400,000 metric tonnes The maize, which will serve up to the Agricultural Business Chamber (Agbiz). worth US$100 million with Eastern Africa 1.3 million families in the East African He estimates that the country will export Grain Council (EAGC) to cushion maize Community region, come as the region has 2.2 million tonnes. “We seem to have regained our status deficits its member countries are grappling grappled with low production that has led to with, after the removal of an export ban price controls in Kenya, and inflation in both as a net exporter of maize starting from May this year,” said Sihlobo. But South Africa is imposed by the authorities. Rwanda and Uganda. “The buyers and traders have signed Meanwhile, the SADC region is expected not the only country that is expected to reap trade deals in terms of contracts amounting to register record. In South Africa, forced an improved harvest. “Zimbabwe only managed to produce to 382,640 metric tonnes valued at US$100 to import maize over the 2015 and 2016 million for export of grain commodities,” said periods, the Crop Estimates Committee 500000 tons last year and now is expected Zambia Commodity Exchange (ZAMACE) (CEC) has predicted that the country will to produce 1.8 million tons. Zambia will executive director Jacob Mwale. harvest a record 15.6 million tonnes of maize record 3.6 million tons and Malawi will see its harvest improving by 36 percent to 3.2 The deal, signed after negotiations and 1.34 million tonnes of soya this year. between Zambian traders and East African With South Africa’s annual maize million tons,” said Sihlobo. The expected buyers was negotiated by the EAGC, consumption estimated at 10.5 million tons, improvement was a result of the improved ZAMACE and the United States Agency for the country has a surplus estimated at 5.13 rainfall in the entire region. International Development (USAID) East million tonnes, making the company a net and Southern Africa Trade and Investment exporter of maize this year, says Wandile MARKETS

Cassava starch firm to increase capacity as local demand rises NIGERIA - Psaltry International Company Limited, an investor in the Nigerian cassava industry, has said that the country has started benefiting from its investment, earning US$4 million in the financial year ended 2016, and is looking at expanding capacity, reports Best Naira News. The company stated that Nigerian Breweries Plc is the biggest buyer of its cassava starch, followed by Nestle Nigeria Plc and Yale Foods in Ibadan.

“We started production in 2013. You could imagine the amount of foreign exchange that only this company is saving Nigeria in import substitution every year, it’s quite huge – US$4 million dollars in 2016. “When the price of dollar went up there was rush for our products. In fact, I don’t know where to start and end because those who were not buying from us before and who were importing could not import anymore,” said Oluyemisi Iranloye, the

company’s Managing Director. “Today, we have big clientele, even May & Baker, Unilever and some packaging companies are coming to us. So, we are trying to build capacity to meet their demands. We have two lines producing 2030 metric tonnes per day, that is a total of 50 tonnes or two trailer loads every day. The annual capacity is 10,000 metric tonnes but we are doing 6,000 metric tonnes now.”

INVESTMENT

DSM opens Rwanda’s nutrition products factory

RWANDA – DSM, the leading ingredients supplier, has opened its first investment in Africa, as it seeks to fight malnutrition directly in the Continent. FOODBUSINESSAFRICA.COM

The investment in Rwanda’s Africa Improved Foods, where Royal DSM has partnered with FMO, the Dutch development bank, CDC Group PLC, the UK government’s development finance institution and the International Finance Corporation, the investment arm of The World Bank, has capacity to produce 45,000 tonnes per year. The government of Rwanda is also involved in the project, which used to be owned and operated by the Ministry of Agriculture. Africa Improved Foods (AIF) produces a range of nutritious porridge flours to help prevent malnutrition in Rwanda and the surrounding countries, with some of the brands available on the shelves already in Rwanda and Uganda. The facility also produces highly nutritious blended flours for the Government of Rwanda and the World Food Programme (WFP).

“With this state of the art facility, we produce nutritious products intended to address malnutrition among vulnerable population segments such as pregnant and breast-feeding mothers, older infants and young children more especially in the first 1,000 days of their lives,” says Prosper Ndayiragije, the Country Director of AIF Rwanda. According to Ndayiragije, the plant intends to reach more than one million people this year, creating over 300 direct jobs and working with over 9,000local farmers in the process. NOTE: The July/August issue of this magazine will have a full-length feature of the Africa Improved Foods. If you would like to be involves, please contact us on info@ foodworldmedia.net

MILLING & FEED AFRICA | MAY/JUN 2017

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EXECUTIVE INTERVIEW

Peter Ndegwa, Managing Director and Chief Executive Officer of Guinness Nigeria PLC. The beer industry in Nigeria continues to struggle in the face of the economic downturn in Nigeria. The CEO spoke to ThisDay newspaper about the prospects and challenges of the industry in the country. introduced Origin Zero and we’ve also started to see Dubic Malt growing and also for Malta Guinness, we’ve introduced Herbs Light, which is identifying an opportunity where consumers are looking for lower sugar. We have expanded our participation into spirits; we have acquired distribution rights from Diageo for international premium spirit such as Journey Walker and Smirnoff. Today, spirits contribute about 14% of our total business. Not only are we importing spirits from Scotland, we have set up local production facility within our Benin plant in Edo State to produce locally. So, we have started producing Smirnoff and Gordon’s Spark; local versions of great quality international brands, bringing affordable brands. We have Smirnoff X1 and X1 chocolate. We have Gordon’s Moringa, which is Gordon’s with infusion of moringa. We’ve also acquired distribution rights for United Spirits Limited (USL), which is the largest Indian spirits business. Brands such as McDowell’s are now produced locally in Benin. As part of responding to the economy, we have significantly increased our local content. Two years ago, we were sourcing 40% locally, today we are sourcing 70% and our intention is to increase it to 80% in the next two years. It’s no longer news that the country has been in recession since 2016. As a consumer goods company, how has this situation affected your business? There’s no question that the state of the economy has affected our business and indeed it has affected many categories. You see significant down trading of a lot of categories. In our own category, alcohol, you see a lot of consumers going for lower priced brands. It has been happening in our sector, especially beer and spirit, but has accelerated in the past two years. Consumers are looking for quality but at a better price. More recently, we have seen affordable beer and spirit being the largest part of the market. Three years ago, the affordable category was about 30% of beer and today it’s closer to 60%. And I would say the same with the spirits category, which is even bigger, more than three quarter of the category. The second aspect that has affected our business is the cost of doing business. That has impacted our margins. As devaluation and lack of liquidity has come through, that has meant accessing 50

MAY/JUN 2017 | FOOD BUSINESS AFRICA

the input sourced locally as those imported are more expensive. Like the saying goes, in every situation there would always be opportunities. For the manufacturing sector, has there been any opportunity for growth during this recession? Sure, there are opportunities for growth. Our business in Guinness Nigeria has been primarily premium beer. We’ve been known for great brands such as Guinness Stout and Malta Guinness and wonderful innovation such as Orijin, which took the market by storm. As the economy has been challenged, we have seen that as an opportunity to offer a broader portfolio to consumers. So, innovation has been the big area of focus for us. You’ve seen innovation in beer, spirits and also soft drinks. We launched innovation in all the three areas. And you see that a lot of these innovations are brands that are affordable. In beer, we have seen growth of beer such as Satzenbrau; in soft drinks, we’ve

Guinness Stout has always been top demand in the market. How have you been able to position the brand to key into the post-recession possibilities by taking advantage of the growth opportunities likely to be witnessed in the months ahead? Guinness itself has been a household name in Nigeria. So we will always invest in Guinness to make it relevant to consumers. You would have seen that despite the fact that we have recession, we’ve continued to invest in Guinness. Guinness sponsors the viewership of English premiership through the DSTV contract to consumers and we know that Nigerians and Africans generally love football. The second one is the new innovation called Guinness African Special, which is slightly lower alcohol, less bitterness and at an attractive price of N200. It has been in the market for about a year and we are driving it. The Guinness brand continues with resilience and innovation of extensions that are relevant to consumers. We also understand FOODBUSINESSAFRICA.COM


ABOUT PETER NDEGWA Peter Ndegwa joined East African Breweries Ltd (EABL) as Strategy Director before moving on to lead Sales and Finance functions in EABL. He was appointed the Managing Director/ CEO, Guinness Nigeria Plc in August 2015 after spending four years as Managing Director/CEO of Guinness Ghana.

that consumers are looking for more choice that’s why we’ve launched these other brands. Is it possible to have an idea of how much you want to invest in producing locally? Our investment in Benin last year was £12 million, about N6billion. That’s the initial investment of starting to produce spirits in this market; we believe that there is a bigger market for spirits and we would continue to invest. In the past five years, in beer and soft drinks, we have invested €200 million within our plants in Lagos, Benin and Aba. We have also started to work with our partner in cassava farming in the middle belt and east and sorghum farming in the north (of the country). What is the guarantee that the spirit produced locally would compete favourably with what people get outside the country, in terms of quality? Guinness has been known for quality in its 66 years of doing business in this market. We are part of an international business that adheres to high quality standard for beer. We are just expanding that to include spirits. And Diageo, our parent company is known for spirits. So producing locally does not mean compromising quality at all. We have been producing Guinness for a very long time. What we are saying now is we are producing different brands but it’s the same business. We’ve set up state-of-art production facilities that produce spirits just like we have FOODBUSINESSAFRICA.COM

for beer. We understand quality in production and marketing. So what we produce will be the same quality you get anywhere else. What is your installed capacity? In beer, it’s about 7.5 million hectolitres (750 million litres) per year. What’s your assessment of meeting this capacity? We have some excess capacity in beer so we have headroom to grow beer. We don’t have enough capacity in spirits and that was why we installed the new facilities. What is your approach in consumer engagement now? Our consumers are our biggest stakeholders. We have to remain relevant to them whether the economy is going well or not. At times like this, we believe we have to give our consumers more choice and that’s why we have launched more brands. We have launched more brands in the last two years than we did five years before. And we have to communicate these brands, so we have been spending more in brand building in the past two years than in the past. We grow the cost of promotion and advertisements and reduce the cost of production with local sourcing of materials. Orijin was a game changer when it was introduced, but competitors also came up with brands to compete with it. How is Origin Bitters doing in the market now?

Orijin is one of the disruptive innovations that brought consumption of bitters and herbs to consumers in a contemporary and easy-going way. We always know that when we introduce a brand like that, competition will come. So we always have to be ahead. That was why we introduced Orijin Zero. We have three offerings: Orijin Bitters, Orijin Ready to Drink and Orijin Zero. Orijin Bitters is still in growth. Orijin is still a very strong brand. Guinness Nigeria recorded huge loss last year, which we learnt was the first in 30 years. How do you intent to reverse this trend? Our shareholders have known us as a company that delivers returns paying great dividends over time. As the economy has been challenged, we saw the impact of currency affecting our business. That was one of the reasons we recorded that kind of performance last year. Going forward, we are confident about our strategy, which is to broaden our portfolio so that we can have even up to double-digit growth. We believe this business will get back to profitability. Also, we are in a period where the cost profile of the country is high. So, as we go into next year, we expect inflation to be lower. One of the other aspects that we spoke to investors about is the cost of sorghum. As a result of drought in the country, the harvest was not as good therefore the amount of sorghum available wasn’t adequate for our operations. That has now come through because the current harvest is much better FBA This article first appeared on ThisDay newspaper. Want to share your views with the industry? Please contact us on info@foodworldmedia.net FOOD BUSINESS AFRICA | MAY/JUN 2017

51


NEWS | SUPPLIER & INNOVATIONS INNOVATION

PureCircle produces new stevia extract with high degree of sugar-like taste

MALAYSIA – Stevia producer PureCircle has announced the successful production of the first stevia leaf extract from its new, breakthrough, proprietary stevia leaf –

StarLeaf stevia. According to the company, StarLeaf stevia contains over 20 times more sugarlike steviol glycoside content compared to standard stevia leaf varieties. The extract from this non-GMO proprietary leaf variety provides beverage and food developers a plant-based, zero-calorie sweetener to produce finished products with more upfront sweetness, no bitter linger and a sugar-like taste. Following the successful production, the company has expanded this variety

to commercial scale and will plant it in thousands of hectares, and is one result of the company’s long term investment of US$100 million in its PureCircle Stevia Agronomy Program, announced last year. “The steviol glycosides in StarLeaf stevia are the most sought because they taste so similar to sugar. We are proud to be the first in the industry to naturally increase the supply of these steviol glycosides in this way,” said James Foxton, Vice President of Agricultural Operations.

APPLICATIONS

DuPont Nutrition & Health debuts stabilizer for dairy-free drinks DENMARK – DuPont Nutrition & Health has made it easier for beverage manufacturers to meet the rising demand for dairy free drinks with the introduction of a single ingredient that gives a refreshing texture and a clean label to these products. “The main driver is the demand for dairy-free drinks for lactose-intolerant

consumers. According to the latest market intelligence, close to 25% of European consumers are reducing or avoiding dairy products in their diet for health reasons,” says Jean-Baptiste Dufeu, DuPont global product manager. The gelling ingredient, Grindsted Gellan MAS 100 – or gellan gum – is a label-friendly

stabilizer for use in non-dairy beverages made with pulses, grains, nuts and plantderived protein, enabling manufacturers to obtain all the functionality they need without mixing in other additives. Previously produced by DuPont for ingredient systems, it is now available as a single ingredient for the first time.

M&A

Kerry acquires China’s ingredients company CHINA - Kerry Group PLC of Ireland, has successfully acquired 100% of Tianning Flavour & Fragrance (Jiangsu) Co., Ltd (“Tianning Flavours”), a leading producer of food ingredients headquartered in Jurong, Jiangsu Province, China. The acquisition significantly increases Kerry’s presence in the supply chain serving

major food and beverage manufacturers throughout China, according to BDA, the advicer of Kerry in the transaction. Terms of the transaction were not disclosed. Tianning Flavours is one of China’s premier players in the food ingredients sector. Since it’s founding in 2005, it has supplied both domestic and international

food and beverage customers with a range of innovative and high-quality flavours and fragrances. The company has also established a nationwide sales network, with branch offices in key locations including Shanghai, Guangzhou, Wuhan, Zhengzhou, and Shenyang.

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