Food Business AFRICA’S NO.1 FOOD, BEVERAGE & MILLING INDUSTRY MAGAZINE
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YEAR 8 | NO. 41 | MAY/JUNE 2020
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The Art of European Meat
artofmeat.eu Picture this: Quality Meat from the heart of Europe − bringing together Craftsmanship, Food Safety and Tailor-Made Service. That is what the Belgian meat suppliers proudly present to you. As one of Europe’s leading meat producers and exporters, they have turned their expertise into an art form. Up to you to savor it.
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Since 2015, AFMASS Food Expos have been defining the future of the food, beverage and milling industry in Kenya and Eastern Africa. With a new name and look, AFMASS Food Expo Kenya edition is taking on a new mandate and a broader scope - to become Eastern Africa’s best platform where food, beverage and milling companies; retailers, importers, exporters; and hospitality companies can meet directly with their consumers, side-by-side with suppliers of processing, milling, packaging, ingredients and laboratory solutions to the region. Join us as at a bigger, better AFMASS Food Expo Kenya edition to discover the latest technologies, new product innovations, market trends and more at the region's most defining event. Contact us today on how your company can participate or visit the website for more info
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CONTENTS ON THE COVER
Food Business
COUNTRY FOCUS: GRAINS INDUSTRY IN ZAMBIA
COVER STORY - DORMANS COFFEE LTD
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AFRICA’S NO.1 FOOD, BEVERAGE & MILLING INDUSTRY MAGAZINE
Dormans Coffee Ltd is celebrating 70 years of operations. We profile the company's past and recent investments as they move to a new location near Nairobi. MY FACTORY • MY STORY
ROZY RANA -
DORMANS COFFEE NEW PLANT, 70 YEARS OF GREAT COFFEE
WWW.FOODBUSINESSAFRICA.COM
COUNTRY FOCUS
GRAINS INDUSTRY IN ZAMBIA
ZAMBIA’S GRAINS, MILLING & FEED INDUSTRYON THE RISE EXECUTIVE INTERVIEW
www.foodbusinessafrica.com
ANDREW CHINSALA
PRESIDENT, MILLING ASSOCIATION OF ZAMBIA YEAR 8 | NO. 41 | MAY/JUNE 2020
MY FACTORY • MY STORY: DORMANS COFFEE 40
REGULARS 8 Editorial 10 What they said 12 Events Calendar 14 Omega-3 by BASF 16 African & International News 33 Sustainability Business Africa News 67 Supplier news & Innovations DAIRY BUSINESS AFRICA 49 Probiotics finding increased application in the dairy industry and more BEVERAGE TECH AFRICA 51 PepsiCo to invest US$400 million in Journey for Racial Equality
EXECUTIVE INTERVIEW: ANDREW CHINTALA – PRESIDENT, MILLERS ASSOCIATION OF ZAMBIA 62
MILLING & BAKING AFRICA 53 Grains Industry in Zambia FOOD NUTRITION AND HEALTH 57 OMEGA 3s - Increasing consumer health awareness takes
FOOD SAFETY: REQUIREMENTS RE-OPENING FOOD BUSINESSES POST COVID 66
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PREVENTING A COVID-19 FOOD CRISIS – THE ROLE AND OPPORTUNITY FOR MULTINATIONALS 60
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TAKE PLACE
EDITORIAL
As debate on racial discrimination and Covid-19 pandemic rages, food industry has its work cut out
W
ith the outbreak and further spread of the Covid-19 pandemic into almost all the corners of the globe, decimating communities livelihoods and lives in its wake, the stark reality of racial discrimination and violence reared its ugly head with the very public death of George Floyd, an American black man who was chocked to death by a white police officer in the US state of Minnesota. While these two issues do not seem to be related at first glance, it is important to note that data from the US Centers for Disease Control and Prevention (CDC) have shown that economically disadvantaged and racially discriminated communities, for which black Americans are in the majority, have been hit particularly hard by the pandemic, recording more infections, hospitalizations and deaths. It is important that the food industry - which has also had its name dragged in the mud as this pandemic sweeps across the world, with a number of cluster cases being reported in meat factories and other food facilities in the US, Germany and even close by, in South Africa – must take this time to reflect on its contribution to discrimination and inequality, from historical times to the present day. From the use of slaves in the Caribbean in sugar plantations and other food and agriculture ventures across the world, the food and agriculture industry have their hands soiled – and their riches tainted by the gross acts of forced labour, discrimination and wanton grabbing of community land and resources for centuries that continue to this day. While the US and the developed world are usually mentioned as the main culprits in these acts, companies and individuals from the developing countries have not
been particularly innocent. Discrimination and thievery of resources continue unabated in rural communities and urban settlements across Asia, Africa and the Americas, in many cases carried out by local companies and people. While we cannot erase history, the industry stakeholders must take this time to reflect, draft and implement policies that can reduce or eliminate hate, discrimination and deprivation of opportunities for disadvantaged communities within their own communities, companies and facilities. This is the time for each and every enterprise across the food value chain to promote equality for all, while putting in place non-discrimination policies, making better and cleaner work environments, removing pay discrimination based on gender or race, providing opportunities for those practicing a minority religion to do so and to provide a fair chance for suppliers from disadvantaged communities as well, with the leadership taking a leading role in ensuring that recruitment and promotion are not based on any discrimination or favouritism. It would also help that food companies invest in the communities in which they operate to help build a more fair, cleaner and prosperous community around them. We live at a time when sustainability has become a buzzword. While it is commendable that food enterprises are planting trees and installing climate change mitigating solar power plants, it is foolhardy to continue having policies and practices that entrench discrimination and inequality in the food industry across the world. A cleaner and better climate and world needs healthy, prosperous and happy people in the first place to be truly transformational. FBA
Have a good read. Francis Juma
FWAfrica
FOODBUSINESSAFRICA.COM Year 8 | Issue 3 | No.41 • ISSN 2307-3535 FOUNDER & PUBLISHER Francis Juma EDITORIAL Catherine Wanjiku ADVERTISING & SUBSCRIPTION Jonah Sambai | Hellen Mucheru CONTRIBUTORS Virginia Nyoro DESIGN & LAYOUT Frank Bett
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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 paid subscription for the other stakeholders in the food chain, including suppliers to the sector. Copyright 2020. 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.
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WHAT THEY SAID “Using a closed and fully automated line solution, without manual contact with the product, we are making it easier for customers to achieve profitability, high efficiency and minimise loss. Plus, the product is food safe and ready for consumption straight after being packaged.”
Joanna Majewska, Business Development Liquid Filled Cheese Line, Tetra Pak during the launch of the company’s first complete processing line for feta type white cheese products. “The reason why we are so excited is because the opportunity ahead of us is enormous. South Africa is a R1 trillion (US$54 billion) grocery market and less than one per cent of that is bought online.”
Chief Executive Officer of South African ondemand delivery platform, Donald Valoyi remarks after securing US$1.6 million in funding to expand its operations.
“We are thrilled to announce the progress that we have made to identify a leadership team comprising the best-of-both organizations and an operating philosophy that builds on our combined deep histories of creativity, innovation and caring for our communities.”
“With a strong portfolio of brands in attractive categories, an agile supply chain and flexible go-tomarket systems, we are successfully managing through the complexities of today and building competitive advantages to emerge an even stronger company in the future.”
IFF Chairman and Chief Executive Officer, Andreas Fibig commented as he unveiled a new Executive Committee of the proposed merger with DuPont’s Nutrition & Biosciences to crate a US$45 billion company.
PepsiCo Chairman and CEO, Ramon Laguarta comments on the company’s first 2020 results, where the company reported 7.76% rise in net revenue to US$13.88 billion despite the global pandemic ravaging economies around the world.
“His appointment is a major step in enabling the integration of Pioneer Foods into PepsiCo and the successful execution of our Sub-Saharan African growth strategy.”
Eugene Willemsen, CEO of PepsiCo Africa, Middle East and South Asia comments on Tertius Carstens’ appointment as the company’s sub-Saharan Africa CEO, following the acquisition of South Africabased Pioneer Foods “China’s vibrant environment is a rich ground for entrepreneurship that has seen the emergence of many local innovators that we hugely admire. The partnership enables Starbucks to tap into the most dynamic Chinese technology entrepreneurs in order to delight our customers with meaningful innovations created in China, for China.”
Belinda Wong, chairman and chief executive officer, Starbucks China on the coffee chain’s partnership with Sequoia Capital China to invest in the next-generation food and retail technology companies to propel Starbucks digital innovation in China.
10 MAY/JUNE 2020 | FOOD BUSINESS AFRICA
“This investment will help us significantly increase our production capacity so that we can meet needs of brand owners who want to improve the lives of their customers by offering materials that have a positive effect on human health, while improving environmental stewardship.”
Dr. Daniel Carraway, Co-founder and CEO of Singapore-based biotech start-up RWDC Industries during the close of the company’s US$133 million Series B funding round to charge its ambitions of meeting the increasing need of sustainable food packaging materials.
“Our partnership with Nespresso enables us to provide on-going support to the Rwenzori coffee farmers. Through community projects and teamwork, growth and development are not only within the coffee farm but also in the improved environmental and social standards of the community.”
Jonny Rowland, Owner and Managing Director of Agri Evolve, a young agribusiness dedicated to improving farmer productivity, as his company announed a partnership with Nespresso through the Reviving Origins program to support struggling coffee farming areas in Uganda. FOODBUSINESSAFRICA.COM
“If we work together, these efforts will help reduce vulnerability to future shocks and disasters, and build community resilience. A systemic shift to a zero-carbon and resilient economy is within our reach — our only future depends on making this vision a reality.”
A coalition consisting of over 150 multinational companies said in a joint statement urging governments around the world to align their COVID-19 economic aid and recovery efforts with the latest climate science. “Promasidor has made an initial investment of US$5m in the farm which will be invested to procure cattle, equip the dairy farm, establish a farm to produce feed and renovate existing buildings.”
Ekiti State Governor, Dr Kayode Fayemi following Promasidor Nigeria’s US$5 million investment to reactivate the moribund Ikun Dairy Farm, which targets a daily production of about 10, 000 litres of milk.
“The Middle East has always been an attractive market for IMCD and we are excited to expand our presence in this region. Our principals in the Middle East needed a partner with these capabilities, and from this new office in Dubai, we will be able to provide them, as well as our customers, solutions that help them innovate and grow.”
Frank Schneider Executive Committee Member of IMCD during the opening of a new office in Dubai that will coordinate its operations in the Gulf region
“This partnership with Microsoft allows us to really step change our employee experience through replacing previously disparate and fragmented systems. These platforms allow us to deliver relevant, personalized experiences as we network our organization.”
Barry Simpson, senior vice president and chief information and integrated services officer of The Coca-Cola Company following a five-year partnership with Microsoft to modernize how the company engages with employees and customers.
“The liquid beverages category has exciting growth potential and this move will help us strengthen and widen our presence in it. Over the years, NourishCo has built a capable team and a network of distributors, co-packers and vendors. We will look to scale up these capabilities further and build a differentiated position in this segment.”
“We are incredibly excited to bring together a worldclass group of investors, with expertise across financial services and agriculture, to help power Apollo’s growth in the coming years.” Eli Pollak, CEO and co-founder of Kenyan agritech startup, Apollo Agriculture after raising US$6 million in Series A funding round led by Anthemis Exponential Ventures to enable the commercial farming platform to scale up its partnership with more farmers.
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Sunil D’Souza, MD & CEO, Tata Consumer Products while announcing a n agreement to acquire PepsiCo’s stake in NourishCo Beverages Limited, a 50:50 joint venture that sells products in the non-carbonated ready-to-drink hydration space. “We know we’re able to drive more widespread action and impact when we make bold commitments. And we’re proud to be among those corporations that are taking the initiative to use scale for good because together, we can secure more measurable and meaningful results.”
John Church, chief supply chain officer at General Mills, on the food and beverage company’s latest commitment to power its operation using 100% renewable electricity by 2030.
“These regulations have particularly sought to rebalance power and influence wielded by various value chain players, reduce unnecessary cost burdens imposed on vulnerable tea farmers; and guarantee better and decent returns on tea farmers’ labour.”
Kenya’s Cabinet Secretary (CS) in the Ministry Of Agriculture, Livestock, Fisheries And Cooperatives, Peter Munya during the unveiling of the final draft of regulation that will govern activities around one of the country’s top export earners, tea MAY/JUNE 2020 | FOOD BUSINESS AFRICA
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EVENTS CALENDAR June 28-30, 2020
Food Ingredients China Shanghai, China Focus: Food & Beverages en.fic.cfaa.cn
September 22-24, 2020
PackTech & FoodTech Auckland, New Zealand Focus: Food processing Tech www.foodtechpacktech.co.nz
September 15-18, 2020 Seoul Food Kintex, South Korea Focus: Food & Beverage www.seoulfood.or.kr
September 24-27, 2020
World Food Fair Singapore, Asia Focus: Food & Beverage www.singaporefoodshows.com
October 7-9, 2020
Gulfood Manufacturing Dubai, United Arab Emirates Focus: Food & Beverage www.gulfoodmanufacturing.com
November 8-11, 2020
Pack Expo International Chicago, USA Focus: Food & Beverage packaging www.packexpointernational.com
November 12-14, 2020
November 13, 2020
October 11-13, 2020
January 31- Feb 03, 2021
Africa Food Manufacturing Cairo, Egypt Focus: Food Processing & Packaging www.africa-foodmanufacturing.com
ISM Cologne Cologne, Germany Focus: Sweets and Snacks www.ism-cologne.com
October 20-22, 2020
February 21-25, 2021
Food Africa Cairo Cairo, Egypt Focus: Food & Beverages www.foodafrica-expo.com
Gulfood Dubai, UAE Focus: Food & Beverage www.gulfood.com
March 2-5, 2021
FHA Singapore Expo Singapore, Asia Focus: Food & Beverage www.fhafnb.com
March 6-8, 2021
March 24-26, 2021
Africa FOODEX Awards Kampala, Uganda Focus: Food, Beverage & Milling www.awards.foodbusinessafrica.com
December 17-19, 2020
Interpack Expo Düsseldorf, Germany Focus: Processing & Packaging www.interpack.com
Food Expo Greece Athens, Greece Focus: Food & Beverage www.foodexpo.gr/en
AFMASS Food Expo Uganda Kampala, Uganda Focus: Food, Beverage & Milling www.afmass.com
Africa Dairy & Drinks Innovation Summit & Expo Nairobi, Kenya Focus: Dairy & Beverages www.afmass.com/dairydrink
IOAM MEA Conference & Expo Online Focus: Milling www.iaom-mea.com
February 25-March 3, 2021
November 03-05, 2020
Africa Food Safety & Quality Summit Nairobi, Kenya Focus: Food Safety www.foodsafetyafrica.net
March 9-21, 2020
Foodex Japan Chiba, Japan Focus: Food & Beverage www.jma.or.jp/foodex
April 13–15, 2021
ProFoodTech Chicago, USA Focus: Food & Beverage www.profoodtech.com
May 24-27, 2021
Sweets & Snacks Expo Chicago, USA Focus: Confectioneries & Snacks www.sweetsandsnacks.com
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KNOWING YOUR OMEGA-3 SOURCE, EFFICACY & QUALITY Omega-3s are once again a hot topic in the media and market shelves are full of omega-3 products. Is that justified? Is it really that important for pregnant women, children and adults to eat fish, omega-3s or DHA? And what’s the difference? For consumers, it does not seem easy to make a decision.
The All-Important Omega-3s Let’s take a closer look at the “Omega-3 story”. Since the 1970s, scientists all over the world have taken a keen interest in the role of omega-3 fatty acids in human health. These nutrients are now among the most studied. Research has largely reported that omega-3s are of high importance for the human body – all cells depend on them throughout life. It starts with the conception phase, pregnancy and childhood, and continues until old age, where they are required for the development and maintenance of body functions. While the brain and eyes are particularly dependent on a sufficient supply of omega-3s, consuming enough of these nutrients also helps to prevent and/ or ameliorate common diseases such as cardiovascular disease, metabolic diseases, cognitive and psychological disorders, inflammatory diseases and even infertility.
Usually fatty acids serve as a source of energy and as building blocks for the body’s fat stores. However, EPA and DHA are unique as they have specific functions within the body. They are components of cell membranes where they have bioactive functions, are required for cellular signaling pathways and gene activation; and they modulate antiinflammatory cascades. In short, omega-3s influence the proper functioning of every single cell in the human body and consequently have a major impact on development, health and diseases. The average intake of omega-3s varies across cultures, countries and regions of countries, depending on the diet and amount of marine foods consumed. The recommendations for omega-3 intake tend to vary as well. Scientists and authorities including the FAO/WHO Expert Consultation (2010), American Heart Association (2011), European Food Safety Authority (2010) and the Heart Foundation Australia (2008) have strongly advised consuming omega-3s. The American Academy of Nutrition and Dietetics recommends an intake of 500 mg of EPA + DHA/day, while the Japanese Ministry of Health, Labour and Welfare (2010) recommends at least 1000 mg per day of EPA and DHA, but ideally much higher values for the general adult population (1800 mg for women and 2200 mg of EPA and DHA combined per day for men). For the management of cardiovascular risk factors in patients, such as lowering high triglyceride levels, intake of 2000 mg up to 4000 mg of EPA + DHA per day has become a medical practice.
Getting the Balance Right Deep Diving into the Omega-3s There are three major omega-3 fatty acids in the diet that are involved in human physiology – namely alpha-linolenic acid (ALA), the longer-chain omega-3s eicosapentaenoic acid (EPA) and docosahexaenoic acid (DHA). ALA is an essential nutrient and the human body depends on dietary intake, e.g. from plant oils. ALA is the precursor to EPA and DHA formation in humans. However, since human production of EPA and DHA is inefficient and dependent on diet composition, intake of preformed EPA and DHA has become crucial. These two do only occur in marine foods like salmon, other fatty fish or seafood. 14 MAY/JUNE 2020 | FOOD BUSINESS AFRICA
Consuming less omega-6 fatty acids and more omega-3 fatty acids is a common guideline because it is important to keep the right balance of these antagonistic players in the human body. An excessively high ratio of omega6s versus omega-3s, as found in a typical Western diet, promotes the development of diseases, whereas a low omega-6s versus omega-3s ratio has beneficial effects. High consumption of common vegetable oils and meats (rich in omega-6s) and low intake of marine foods (rich in omega-3s) increases the ratio, which should ideally be 1/5-10. Nations that consume a lot of fish and seafood, like Japan, are able to achieve this. Western diets have been shown to contain as much as 10-30 times more omega-6s FOODBUSINESSAFRICA.COM
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than omega-3s, thus throwing the ideal ratio off-balance and allowing more omega-6s to crowd out omega-3s in our cells.
DHA is of utmost importance.
Source, Freshness and High Concentration Make a Difference
EPA Versus DHA: Each Provides Specific Benefits Selecting a high-quality omega-3 source and preserving Consuming DHA and EPA, either from marine foods, freshness is critical to ensure that uncompromised omega-3 from dietary supplements or DHA-fortified foods, has reaches the consumer. In a recent article published by been advised for good reasons. EPA is important for heart Scientific Reports (January 2015), researchers found that function, as it helps regulate blood pressure and heart rate. fish oil supplements in New Zealand were highly oxidized It is also vital for the brain where it influences serotonin and most did not meet the label content of omega-3s. Only release and thereby mood control. Most prominently, EPA 3 out of 32 fish oil supplements surveyed contained the is a key inhibitor of inflammation, ameliorating eczema, quantities of EPA and DHA that were equal to or higher arthritis, asthma and chronic obstructive pulmonary than the labelled content, with most of the products tested containing less than 67%. disease. DHA is the building block of membranes in all cells, To ensure optimal freshness, fresh raw material with keeping them functional. The brain and eye particularly minimum odor and oxidation needs to be carefully selected. accumulate DHA where it influences the Proper handling must be applied to avoid oxidation later on in the production process. production of neuro-transmitters and thereby The finished product should also be dried in safeguards cognitive and visual function. For example, DHA controls serotonin action in the low light and packed in light-impermeable final For dietary packaging to ensure that freshness is preserved brain and together with EPA regulates mood supplements, and related disorders like depression, anxiety from start to finish. BASF produces very For dietary supplements, BASF produces and impulsive behavior. Throughout life, DHA improves cognitive function: in a child’s brain high concentrates of very high concentrates of DHA and EPA using development phase, during adulthood and in DHA and EPA using a a special process to reduce saturated fat to special process to less than 1% in the finished product, compared seniors where it lowers the risk of dementia reduce saturated to standard natural fish oil which comprises and Alzheimer’s disease. fat to less than 1% in nearly 30% saturated fat. What this means Preformed DHA - Underestimated the finished product, for the consumer is simply this – better quality compared to standard fish oils lead to less unwanted fats and better during Pregnancy? natural fish oil which Pregnant women should take good care of comprises nearly 30% taste, while also allowing higher dosages, thus requiring fewer capsules to be consumed. their DHA intake. Before and after birth, DHA saturated fat. Smaller capsules make ease of swallowing an accumulates in the brain. Maternal stores added convenience for consumers. provide the developing baby with the DHA necessary for brain development and, after birth, they continue to consume DHA from their mother via breast milk. If the mother does not have enough DHA stores and does not consume adequate amounts of preformed DHA in her diet, the baby will not get enough for proper development and both mother and child will be malnourished. Apart from better child development, good DHA status during pregnancy has also been associated with reduced preterm births and a lower risk of anxiety disorders during pregnancy as well as postpartum depression. Pregnant women are usually advised to avoid eating fish that may contain elevated levels of mercury and other pollutants. Therefore, pregnant women are likely to avoid eating fish altogether with the good intention of providing the best nutrition for their growing offspring. It is precisely during this period in the baby’s life that getting enough
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Making Decisions Based on Science Knowing all this, finding the right omega-3 product is easy: Firstly, it should contain DHA and EPA; secondly, it should come from a high-quality source and from a trustworthy supplier and finally, DHA and EPA should be as high in concentration as possible. The message to consumers is clear - the scientific evidence regarding the health benefits of omega-3s is overwhelming. Get the right product and take care of your health. BASF’s Omega-3s are from fish or algae sources suitable for vegan applications. For technical, application or commercial inquiries contact our BASF representative in your region or diana.wairimu@basf.com FOR MORE INFORMATION: https://www.basf.com/global/en/products/segments/ nutrition_and_care/nutrition_and_health/omega-3.html MAY/JUNE 2020 | FOOD BUSINESS AFRICA
15
AFMASS
FOOD EXPO UGANDA EDITION
AUGUST 13-15, 2021 UMA MULTI-PURPOSE HALL, LUGOGO, KAMPALA, UGANDA
DISCOVER GREAT LAKES REGION'S
FOOD
BEVERAGE
& MILLING TRENDS OF THE
FUTURE FOR SPONSORSHIP, EXHIBITION & ATTENDANCE ENQUIRIES INFO@FWAFRICA.NET CELL: +254 725 34 39 32 16 MAY/JUNE 2020 | FOOD BUSINESS AFRICA
VISIT THE WEBSITE FOR MORE INFO
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Uganda and the Great Lakes region of Africa's food and hospitality industry is growing - fast! And your time to discover this important region is now. Join us at the AFMASS Food Expo Uganda edition - the Great Lakes region's first and biggest platform where food, beverage and milling companies; retailers, importers, exporters; and hospitality companies meet directly with their consumers, side-by-side with suppliers of processing, milling, packaging, ingredients and laboratory and supply chain solutions to the region. Sign up to visit or exhibit at this regional event, where you will discover the latest technologies, new product innovations, market trends and more at the region's most defining event. Contact us today on how your company can participate or visit the website for more info FOODBUSINESSAFRICA.COM
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PACKAGED SWEETS & CONFECTIONERY, SNACKS & CHOCOLATE PRODUCTS MAY/JUNE 2020 | FOOD BUSINESS AFRICA
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REGULATORY & POLICY
Dairy processor FrieslandCampina WAMCO reports a 8.5% increase in 2019 turnover
NIGERIA - FrieslandCampina WAMCO, Nigeria’s leading dairy processor has announced a turnover of N161.83 billion (US$417.6m) for the financial year ended Dec. 31, 2019. The turnover represented an increase of 8.5 per cent when compared with N149.16 billion (US$384.9m) registered in 2018. Ben Langat, Managing Director, FrieslandCampina WAMCO Nigeria, made this known at the company’s 47th Annual General Meeting held virtually. The company posted a profit before tax of N18.75 billion (US$48.3m) against N16.31
billion (US$42m) posted in 2018, representing a 15 per cent increase. During the year under review, the business environment remained challenging but the company was able to forge ahead, reports Nigeria News Agency. “In spite of the headwinds, FrieslandCampina WAMCO played a leading role in Nigeria’s backward integration initiative led by the Central Bank of Nigeria (CBN) in the dairy sector,” Langat said. Langat noted that the company activated its Dairy Development Programme (DDP) in Bobi Grazing Reserve, modelling 10 years success of the programme on a 10,000-hectare grazing reserve in Mariga Local Government Area of Niger. The company inaugurated a state-of-the-art factory for the production of Yoghurt and introduced the new Peak Yoghurt Drink in three distinct flavours (Plain Sweetened, Strawberry and Orange) into the market, in line
with its business plan. Speaking on the company’s business outlook for 2020, Langat said that the Board of Directors and management of FrieslandCampina WAMCO remained positive and confident about the future of the company, in spite of the disruption caused by COVID-19 pandemic. He said that the company would remain focused on its purpose of providing better nutrition and advocating healthy living, adding that FrieslandCampina WAMCO would continue to actively engage consumers and pursue its backward integration for business sustainability. The improved financial results come after the company reported a significant growth in its milk collection activities in the country. Through its DDP initiative, the milk processor recently recorded an increase in fresh milk collection from farmers of an all-time high record of 40,000 litres of milk per day.
INVESTMENTS
Red Bull owner plans US$150m investment to expand operations in China country. THAILAND – TCP Group, To enable the Group the inventors and owners establish a more of the Red Bull brand permanent presence has unveiled a series of in China, TCP revealed investments totaling more that it has set up a than US$150 million to local company to help expand Red Bull operations it to better enhance in China over the next its marketing and R&D three years. capabilities by better The investments will understanding Chinese further expand TCP's market. TCP said that presence in the Chinese the new in-country market by supporting capacity will ensure the its lcal partnerships, demand from its Chinese establishing a new customers is met through representative office, constant innovation and in-country team, and the introduction of new manufacturing centers products in the very near and launching of new future. Red Bull products. The beverage firm As part of the capital allocation, TCP plans to invest in has also been establishing new a new manufacturing center in the partnerships and a new business 18 MAY/JUNE 2020 | FOOD BUSINESS AFRICA
model to ensure the long-term development of Red Bull in China. To this end, the company has partnered with, Guangzhou Yao Energy and Pusheng Food Sales to launch two new products locally produced Red Bull An Nai Ji Drink and Red Bull Vitamin Flavor Drink in China. "TCP is proud to unveil our planned investments of more than USD 150 million over the next three years in the Chinese market,” Mr. Saravoot Yoovidhya, CEO of TCP Group, said. “We will further strengthen our strategic partnership and work closely with our local partners to ensure that our business continues to play a small but important role in supporting the development of the entire Chinese beverage industry." FOODBUSINESSAFRICA.COM
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Ethiopia spends US$277m IFF and DuPont Nutrition & Biosciences push forward with US$45bn merger on wheat purchases to stabilize market Food & Beverage; Scent; Health & – The Ethiopian government has secured wheat supply deals totaling to 1.1 million tonnes valued at US$227.9 million to stabilize the local market and further support emergency response efforts. The Eastern Africa country has issued wheat supply tenders to three overseas companies to supply 600,000 tonnes of wheat at total cost of US$127.9m. This is in addition to the 500,000 tonnes that the Ethiopian government will be procuring from Australia and Russia for US$150m after entering into a state-to-state level of agreement. The procurement agreements, which were announce in May after a one month delay due to COVID-19 induced movement restriction in many countries, will see Martina Mertens Sample, a Turkish company, supply 300,000 tonnes of the wheat for US$65.9 million. London-based company GemCorp Commodities Trading was awarded the contract to supply a third of the grain for US$40.73 million, while Olam International, a Singaporean company, will supply 100,000 tonnes of wheat for US$21.27 million. The purchases are sought to replenish the stocks of the Ethiopian Trading Business Corporation with 400,000 tonnes of wheat and the remaining 200,000 tonnes is for the National Disaster Risk Management Commission (NDRMC). Debebe Zewede, director of public relations at the National Disaster Risk Management Commission said that the main aim of the procurement is to respond to various natural disasters, such as floods and landslides.
ETHIOPIA
20 MAY/JUNE 2020 | FOOD BUSINESS AFRICA
– International Flavors & Fragrances (IFF) and DuPont’s Nutrition & Biosciences (N&B) business have announced the purpose and vision, operating model and executive committee for the intended combined company. Building on the previously announced merger between IFF and DuPont’s Nutrition & Biosciences (N&B) business which is expected create a US$45.4 billion company on an enterprise value basis, the companies said that they anticipate the transaction will close in the first quarter of 2021. According to a statement jointly issued by the two companies, the combined company will be guided by a purpose and vision that touches on the core strengths of each business, helping unify the future organization toward one shared goal. The combined company’s purpose will be ‘Applying science and creativity for a better world’ as the partners continue to push past traditional industry boundaries and commit to be a force for a better and more sustainable future. Core to the combined company’s strategy for success, IFF and DuPont said that a central vision, to “Be the partner for essential solutions”, will guide future strategy and initiatives. The combined company will be composed of four divisions: Taste,
USA
Biosciences and Pharma Solutions. Bringing together IFF’s Taste division and N&B’s Food & Beverage segment, the Taste, Food & Beverage division will represent approximately US$6.1 billion in pro forma 2019 net sales for the combined company. As the combined company’s largest division and with significant opportunity in integrated solutions, Chairman and CEO Andreas Fibig intends to be actively involved in guiding this division to achieve the compelling benefits of this combination. Matthias Haeni and Amy Byrick will lead the division. Post-merger, the companies also intend to create a new Integrated Solutions Center of Excellence to focus on incubating new business opportunities in total product solutions while IFF will establish a Center for Commercial Excellence to support business and commercial teams through development of best practices, customer insights analysis, resource deployment and the optimization of pricing strategies and solutions. A newly appointed senior executive that will report to Chairman and CEO Andreas Fibig will lead each group. The Executive Committee of the combined company will include: IFF Chairman and Chief Executive Officer, Andreas Fibig, as the new Chairman and CEO; and Rustom Jilla, as the Executive Vice President and Chief Financial Officer. “We are thrilled to announce the progress that we have made to identify a leadership team comprising the best-of-both organizations and an operating philosophy that builds on our combined deep histories of creativity, innovation and caring for our communities,” said Andreas Fibig. FOODBUSINESSAFRICA.COM
M&A
Nigerian tomatoes startup clinches US$4.2m funding in series A round
NIGERIA - Tomato Jos, a Nigerian agro-processing company focused on the local production of highquality tomato paste, has secured US$4.2 million in a Series A funding round led by Goodwell Investments, via its West Africa partner Alitheia Capital with participation from Acumen Capital Partners and VestedWorld. Mira Mehta founded tomato Jos in 2014 with the vision to create and retain local value-add to the tomato value chain, reduce post-harvest losses, and improve the lives of smallholder farmers. Since its inception, Tomato Jos has focused on securing its supply chain through primary production. The lead investor, Goodwell Investments, said that the combined US$4.2 million funding will boost Tomato Jos’ transition to its next stage of growth which will entail the processing and distribution of tomato products. The company’s growth plans include the installation of a drip irrigation system and a processing plant that can produce 24 tons of finished products per day. "Processing has always been the plan for Tomato Jos, but to get there, we spent a long five years working only on farming and primary production to make sure that we had a really solid foundation in place", commented Mira Mehta, founder and CEO of Tomato Jos. "Everyone at the company is extremely excited to take this big step forward into the world of food processing and value-add production," the CEO added. While Nigeria is the second-largest producer of tomatoes on the continent, farming inefficiencies and supply chain challenges have created a demandsupply gap resulting in Nigeria being one of the biggest importers of tomato paste in the world. At scale, Tomato Jos aims to will work with thousands of smallholder farmers on over 2,600 hectares of land, putting more than US$1m of direct income into the local economy each year. It aims to increase yields and incomes of the local smallholder tomato farmers it works with, boosting the sector with an improved capacity of farmers, reduced postharvest losses, and high-quality product.
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PepsiCo names Tertius Carstens as its sub-Saharan Africa CEO SOUTH AFRICA – US-based food and beverage giant PepsiCo has appointed Pioneer Foods’ boss, Tertius Carstens as its subSaharan Africa chief executive. Tertius will head PepsiCo’s subSaharan Africa operations from South Africa, which the company plans to leverage to expand and drive profitable growth across the region, an integral part of fulfilling PepsiCo’s ambition to become Africa’s leading food and beverage company. The appointment comes after PepsiCo’s acquisition of South African packaged goods company, Pioneer Foods for US$1.7 billion, making it one of the group’s biggest investments outside of the US. The deal has already received approval from major competition watchdogs in South Africa. Pioneer Foods owns several leading brands including Weet-Bix, Liqui Fruit, Ceres, Sasko, Safari, Spekko and White Star. Commenting on Tertius’ appointment, Eugene Willemsen, chief executive of PepsiCo Africa, Middle East and South Asia (AMESA), said that his appointment is a major step in enabling the integration of Pioneer Foods into PepsiCo and the successful execution of our SubSaharan African growth strategy. Tertius will now join the PepsiCo Amesa executive committee. He will be supported by four business unit leaders, with combined food and beverage industry experience of more than 100 years, each of who will be responsible for Essential Foods, Groceries, South Africa Snacks and Sub-Saharan Africa Foods and Beverages respectively. The appointment follows the recent acquisition of majority stake in Senselet Food Processing Plc. in Ethiopia, a growing and influential investment company by PepsiCo. 22 MAY/JUNE 2020 | FOOD BUSINESS AFRICA
INVESTMENTS
Kasapreko kickstarts operations at newly established beverage factory
GHANA - Kasapreko Company Limited, a Ghanaian manufacturer and producer of alcoholic and nonalcoholic drinks has commenced operations at its new factory in the Ashanti Regional town of Tanoso, developed under the government’s One district, One factory flagship (1D1F) programme. The factory, which sits on a 10,000 square metre property, has a production capacity of about 85,000 bottles of various products per day and will serve the northern market of the country as well as the export market. The new facility is expected to will create about 3,000 direct and indirect employment opportunities. Part of government’s flagship 1D1F initiative, the government assisted the beverage company to access US$20 million loan from Eximbank for the construction of the project. Kasapreko CEO, Richard Adjei, has expressed how profoundly grateful his outfit was to the government of Ghana
for the 1D1F initiative, whose proactive measure has ensured the realisation of its new frontier. Set up 30 years ago at Nungua in Accra, Kasapreko is today the largest producer of carbonated soft drinks and alcoholic beverages in the country and boasts of the most diverse product range for variant consumer preferences. The company’s portfolio includes Opeimu Herbal Bitters, Cocoa liqueur, Tonic Wine, Lime, Cardinal Strawberry, Dry Gin, Kasapreko Brandy and K20 Gin & Whisky and Alomo Bitters. With over 500 employees, the company has also majored into soft beverage production with Storm Energy Drink, Awake Drinking Water, Royal Drinks, 10/10 and, Veraldo as brands under its nonalcoholic portfolio. The company supplies its products to Nigeria, South Africa and other western and southern African countries.
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UAE and Saudi Arabia food and beverage market to surpass US$80bn in 2020 UAE – The United Arab Emirates (UAE) as well as the Kingdom of Saudi Arabia (KSA) are some of the most strategic markets for food and beverage companies in the Gulf region and despite the COVID-19 crisis and the looming economic recession, the food & beverage market is projected to register steady growth throughout 2020 to reach US$80 billion. This is according to an industry analysis conducted by research firm, Frost & Sullivan titled the ‘2020 Outlook of the KSA and UAE F&B Market’, which attributes the growth to increased consumer expenditure on food and beverage products. The research estimates that the overall expenditure on F&B in the UAE will increase by 6.9% year-on-year (YoY), and reach US$37 billion in 2020 from US$34.6 billion in 2019. It also projects overall expenditure on food and beverage products in the Kingdom of Saudi Arabia to witness a 5.4% YoY growth to hit US$50.6 billion. The combined market is therefore expected to surpass the US$80 billion mark this year. As a key take away, Frost & Sullivan notes that product differentiation and innovation in terms of taste, flavors, and ingredients will remain key success factors for market participants in both markets. “Rising health awareness, product differentiation, and convenience of online food platforms are key factors to drive the F&B market in the KSA and UAE,” said Prithvijit Roy, Food & Nutrition Consultant at Frost & Sullivan. Roy highlights that, served as a center-ofplate item, cereals continue to be the most consumed food item in both nations, followed by value-added dairy products, fruits and vegetables, and meat-
based products. “Focusing on alternatives (such as organic, wholewheat, and gluten-free products) and fortified foods, the majority of F&B market leaders are achieving higher margins and revenues through innovation and constantly creating variety,” Roy adds. “Further, increasing awareness and attempts by governments to curb the intake of unhealthy food items will push the demand for organic and balanced foods.” To take advantage of the growing F&B market in the KSA and UAE, the company said that vendors should focus on the some of the key opportunities driving demand in the region. There is a notable rapid surge in demand for packaged food as a result of changing lifestyles in both countries. The analysis further identified growing awareness of organic food and increasing adoption of different cuisines due to Dubai’s sizeable expatriate population. Notably, the Frost & Sullivan projects a shift towards domestic production as a critical step in achieving food sufficiency and security per Saudi Vision 2030 and UAE National Food Security Strategy 2051. “The agriculture segment will adopt the Internet of Things (IoT) for food processing and traceability” and “meat processing, dairy, and confectionery segments are becoming increasingly attractive to foreign investors,” says the research firm. Increased social media participation from the younger population and financial independence is also expected to drive consumer preferences towards premium products, offering a unique consumption experience.
INVESTMENTS
Ethiopian food processor invests US$10.3m to expand it manufacturing capabilities manufacturing plant in Adama, Oromia Regional State. The biscuit production line, which is going to join the 45 biscuit factories registered by the Food, Beverage & Pharmaceutical Industry Development Institute, is under construction for 150 million Br (US$4.4m). The company revealed that it has already completed the construction of the ETHIOPIA – Kiya, a local food pasta and flour processing lines. Kiya says that it expects the processing company in Ethiopia facilities to be operational by operating under Soror General end of August 2020, having Trading, has invested 350 million the capacity to process 2,440 Br (USS$10.3m) to expand a flour quintals (244 tonnes) of flour processing, pasta and biscuit 24 MAY/JUNE 2020 | FOOD BUSINESS AFRICA
and 250 quintals (25 tonnes) of macaroni per day and expected to create jobs for 300 people. Elias Masresha, general manager of Kiya Food Complex said that high levels of wheat production in the State triggered the company’s investment. While Ethiopia is a net importer of wheat, the country has initiated several projects to plug in the deficit from local production and cut its expenditure on wheat imports. This year, the country has so far spent US$277 million on wheat imports.
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M&A
Tunisian dates exporter VACPA secures US$12M from IFC to manage Covid-19
KENYA - MAY 27-29, 2021 UGANDA - AUGUST 13-15, 2021 TUNISIA - Leading Tunisian dates exporting company VACPA has secured financing amounting to US$12.41 million from the IFC as part of efforts to preserve jobs, especially for women, amid the COVID-19 pandemic. VACPA, which is Tunisia’s largest exporter of dates, buys its fruit from close to 1,000 farmers and employs more than 1,700 workers, 80 percent of whom are women. IFC notes that the investment will be delivered in two tranches: The first tranche of US$6.20 million will come as working capital to meet the company’s immediate needs; while the second tranche of US$5.08 million will be used by VACPA to expand its operations, diversify into date concentrate production, and improve the supply chain. Agriculture is a key industry for Tunisia, accounting for 10 percent of the country’s gross domestic product and around 10 percent of total exports. VACPA exported 13,500 tonnes of dates in 2019, mainly to Europe, North America and South-East Asia. The COVID-19 crisis, however, has impacted both demand and supply in the food industry, and put a financial strain on businesses. IFC’s financial package is flanked by an advisory program which will support farmers as they adopt sustainable irrigation technologies and implement better agricultural practices. The advisory program will also help VACPA attain Economic Dividends for Gender Equality (EDGE) Certification, recognizing the company’s efforts in creating equal career opportunities for women and men. “We adapted our financial package to VACPA so it could emerge stronger as a company, providing steady employment to many rural women and buying produce from small-hold farmers,” said Beatrice Maser, IFC’s Director for the Middle East and North Africa. FOODBUSINESSAFRICA.COM
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M&A
Ugandan seed producer clinches US$1.2m investment from Pearl Capital Partners
UGANDA - Pearl Capital Partners, through the Yield Uganda Investment Fund, has invested UGX 4.6bn (US$ 1.2m) in NASECO, Ugandan based producer, processor and distributor of certified seeds in the East African community. Having operations for over 20 years, the investment aims at improving NASECO’s
production capacity and market development. As part of the investment, Pearl Capital will also provide NASECO with business development support to enhance both the technical and governance facets of the business, to ensure sustainable and prolonged growth and self-sustenance in the future. “NASECO is delighted to be the new addition to the Yield Fund portfolio, a true partnership turning challenges into opportunities. This investment is tailored to serve the East African farming community by providing the best performing seeds, a cornerstone in food security and in a growing agribusiness environment,” Rodeyns Nicolai, NASECO Managing Director said. The partnership between Pearl Capital and the seed producer is expected to enable NASECO to further scale up its current business model to new heights using the latest technologies and knowhow. Rodeyns said that the
focus will be on combining superior seed with good agricultural practices, bridging yield gaps, providing resilience and climate smart options. The Yield Uganda Investment Fund is a EUR 20 million agrisocial impact investment Fund financed by the European Union (EU) through the International Fund for Agriculture Development (IFAD), Soros Economic Development Fund (SEDF) of Open Society Foundations (OSF), FCA Investments (FCAI) and National Social Security Fund Uganda (NSSF). The Fund, which has been in existence for three years, is vitalized through the European External Investment Plan through which the EU aims to attract capital into Uganda to foster development in agriculture, trade and industrialization.
INVESTMENTS
Rwanda acquires a US$1.1m grant from AfDB to expand its meat value chain
RWANDA The African Development Bank (AfDB) has awarded a US$1.1 million grant to Rwanda to implement the country’s Meat Value Chain Trade Competitiveness Project. The Board of Directors of AfDB approved the grant which will help to expand the east African nation’s 26 MAY/JUNE 2020 | FOOD BUSINESS AFRICA
meat production value chain, enhance market access and cross border trade and increase the contribution of the sector to the Rwandan economy, highlighted the banks press-release. The grant is awarded from the resources of the African Trade Fund (AfTRA). The Meat Value Chain Trade Competitiveness Project, to be implemented between September 2020 and August 2022, targets provinces such as Rubavu, Nyagatare, Bugesera (Gako) and Rusizi districts. It will directly benefit more than 650 producers, processors and merchants, 74% of whom are women working in informal crossborder trade. In addition, it will indirectly impact 1,950 producers,
processors, merchants, and customs agents, as well as community animal health agents, veterinarians and their agents. Abattoirs in Koadu, Camr, Rugano, Rugari, Santra and Saban will also be supported. The project covers two of Rwanda’s busiest cross-border trade frontiers where large trucks haul goods between Gisenyi and Goma in the Rubavu district, and “Rusizi I,” connecting Kamembe to Bukavu in the Rusizi district. The project will complement the “Gako Beef” initiative, a flagship livestock and meat production scheme started by the Rwandan government in 2015 to increase meat production for local markets and for export. FOODBUSINESSAFRICA.COM
M&A
East Africa Fruits raises US$2m in series A funding round led by Dutch investor TANZANIA - East Africa Fruits, a Tanzanian company addressing food distribution challenges by improving efficiencies in the farm-to-market sector, has raised US$2.05m in a Series A equity funding round. The company supports smallholder farmers on crop planning in alignment with marketplaces, upgrading farm-side infrastructure and transitioning to sustainable practices. It also aggregates demand and delivers a wide range of fresh and exotic produce directly from farms to stores of B2B customers. Goodwell, a Dutch impact investment firm, led the fundraising round with participation from FINCA Ventures, an investing platform that provides patient capital to early-stage social enterprises and elea, a philanthropic impact investor. The investment capital will accelerate East Africa Fruits’ ability to build essential supply chain infrastructure with better transport for fresh produce directly from farms to urban marketplaces and strengthen livelihoods for small-scale farmers and food vendors. Over the next three years, the company aims to serve over 10,000 farmers and 6,000 small-and-medium enterprise (SME) vendors.
The company said that it will also acquire new machinery for its main distribution center and build essential infrastructure and technology to collect, store and distribute produce to match demand more accurately. “The completion of our Series A funding opens up incredible opportunities for East Africa Fruits. We’re eager to scale our operations, expand the reach of our smallholder farmer network and our distribution footprint, and ultimately to demonstrate real impact in the lives of local farmers and informal food vendors,” said Elia Timotheo, founder and CEO of East Africa Fruits. Meanwhile, AgDevCo, the UK-based social impact investor in the Sub-Sahara Africa agricultural sector, has issued a long-term debt investment to Pee Pee Tanzania Limited (PPTL), a regional leader in the production of grain storage bags. PPT plans to expand its manufacturing capacity, including setting up a new dedicated factory for the production of grain storage bags with the acquired investment.
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Oil Palm Development Association of Ghana launches new strategic sectoral plan
GHANA - The Oil Palm Development Association of Ghana (OPDAG) has launched a five-year strategic plan, debut “Creating a Socially Responsible, Ecologically Sustainable and an Economically Vibrant and Inclusive Oil Palm Industry in Ghana.” The plan to kick start this year, 2020-2024, is aimed to improve governance of the association, administrative structure, establish auditable financial management system as well as funding, reports
Ghana Web. Mr Samuel Avaala, the OPDAG President, said the plan was developed through a collaboration and consensus building with veritable representatives of actors along the oil palm value chain. It also stipulates the strength, weakness, opportunities and threats of the Association and the entire oil palm sector. Since the relaunch of the association in 2015, it had chalked a lot of successes and resolved many challenges. To this regard, the association felt the need to develop and implement a strategic plan to serve as a blueprint for the development of the sector. The OPDAG President said the strategic plan would improve the membership base and service delivery as well as internal and
external communication. It would also adopt and use globally recognised best practices across the value chain and policy advocacy for the good of the industry. He said each of the strategic pillars had its own related activities designed to contribute to the achievement of the overall objectives of the Association. “These pillars are in tune with the changes that are occurring within the sector, particularly taking cognisance of the Sustainable Development Goals and responsible production in line with other globally recognised sustainability principles and criteria,” he said.
COMMODITIES
Zambia forecasts bumper maize harvest to over 3.3m tonnes as rains work magic tonnes) while large scale farmers are expected to produce 227,284 tonnes, or 7 percent of the total maize production. Agriculture Minister Michael Katambo announced this when he released the 2019/2020 Crop Forecast Survey, stating that the country had a maize carryover stock amounting to 179,247 metric tonnes as at 1st May, 2020, therefore the total supply of maize available for the 2020/2021 marketing season is 3,566,716 metric tonnes. ZAMBIA - Zambia has projected Minister Katambo added that a 69% rise in maize production the ministry has this year factored in the 2019/2020 agricultural in a purchase target of 1,000,000 season to 3,387,469 metric from metric tonnes for the Food Reserve the 2,004,389 metric tonnes Agency’s (FRA) buying target with produced in the preceding season. a surplus of more than 710,000 According to the Ministry of metric tonnes from the usual Agriculture, small and medium purchase of 500,000 metric scale farmers are expected to tonnes. contribute up to 93% of the total He said despite factoring in the maize production (3,160,185 higher FRA maize purchase target, 28 MAY/JUNE 2020 | FOOD BUSINESS AFRICA
the country has still managed to record a maize surplus of over 210,000 metric tonnes in 2020 implying that the country is food secure and will remain as such for the next year to come, provided smuggling is controlled. With a projected population of over 17 million people, the total maize required is 3,356,617 metric tonnes and these are broken down as 1,603,383 metric tonnes for human consumption, 1,000,000 metric tonnes for strategic food reserves and 409,018 metric tonnes for industrial requirements. “Taking into account all the requirements and post-harvest losses, the country is expected to have a surplus of 210,099 metric tonnes,” Minister Katambo said.
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INVESTMENTS
National Flour Mill Company inaugurates Somaliland's first wheat flour mill utilised both hard and semi-hard wheat. The whole equipment supply and installation of the plant is provided in turn-key basis by Alapala, including the 300 tonnes per day (TPD) capacity flour mill and 4x7.500 ton capacity steel storage silos. It’s comprises of an advanced SOMALILAND - The National automation system, combined Flour Mill Company in Somaliland with Scada software overall has commissioned its newest provides an excellentthat ability for wheat flour mill with a capacity of process control and traceability. 110,000 MT wheat annually, to Alapala, the system Installed by Alapala, one of According allows centralized of the leading suppliers of flour the entire processmonitoring from wheat milling equipment, the mill is said intake to flour packaging, offering to be the first modern flour mill remote connection possibility in the country and will produce for real-time error diagnosis and wheat flour mainly for domestic intervention as well. consumption. The plant will
The Scada software is also combined with a sophisticated yield monitoring system, which collects weighing data from six different places in the process and analyzes the data to generate detailed production reports. The installation of pneumatic and mechanic transport equipment is fully made in conformity with EU standards, and individual precautions were taken to ensure safe and hygienic product transfer in the mill. This is Alapala’s latest project in Africa. In April this year, Alapala installed a new flour mill reference at Flour Mills company in Morocco, making the project its third turn-key flour mill project in the country.
KENYA - MAY 27-29, 2021 UGANDA - AUGUST 13-15, 2021
AFRICA'S DAIRY & SOFT AND ALCOHOLIC BEVERAGES FESTIVALS AND SHOWCASES
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INVESTMENTS
Fresh Del Monte Produce opens new US$19m fresh cut plant in Japan
JAPAN - Fresh Del Monte Japan, a subsidiary of Fresh Del Monte Produce, has commissioned operations in its newly constructed US$19 million plant in Yokohama, Japan with an annual production capacity of 10,000 tonnes of fruits and vegetables. According to the company, the new facility is built with stringent hygiene protocols and cutting-edge low-temperature air condition management system to maintain product quality and freshness, adding that the new state-of-the-art fresh cut facility will serve
as a manufacturing base that satisfies the increasing need for ready-to-eat fresh and convenient fruits, salads and vegetables across Japan. “We identified a significant growth in demand for fresh and high-quality produce across Japan,” said Youssef Zakharia, President & Chief Operating Officer of Fresh Del Monte Produce. “Today, more than ever, our consumers are looking for fresh readyto-eat options. Our plant in Yokohama will maximize our wide range of products, driving growth and innovation in our fresh-cut segment.” The fresh produce firm noted that the plant will focus heavily on the Tokyo metropolitan area, which boasts a population of more than 37 million (a market roughly the size of California) and represents the second largest GDP of any city in the world. The opening is part of Fresh Del Monte’s aggressive growth strategy that aims to maintain its leadership in the fresh cut segment. The company, which reported net sales for the first quarter of 2020 of US$1.118 billion, recently appointed Elana Gold as the its new Vice President and Chief Marketing Officer (CMO) aimed at delivering long-term and sustainable business growth for the iconic brand.
REGULATORY & POLICY
Kenya gazettes tea industry regulations to streamline the value chain
KENYA – In efforts to cultivate robust and progressive tea regulations that will steer the tea industry well into the future, the government of Kenya has gazette new regulations that will govern activities around one of the country’s top export earner, tea. The regulations, which were gazetted by the Cabinet Secretary (CS) in the Ministry Of Agriculture, Livestock, Fisheries and Cooperatives, Peter Munya seek to improve the management of the tea value chain with a view to improving operational efficiencies of various actors and guarantee better earnings for the tea farmers and improve the production, processing and marketing of tea and tea products. According to the CS, among the challenges that 30 MAY/JUNE 2020 | FOOD BUSINESS AFRICA
the reforms seek to eradicate include corruption, exploitation of farmers, conflict of interest in the management of tea value chain, diminished earnings for farmers, inefficiencies in the tea value chain, lack of transparency as well as the problem of low value addition of Kenyan tea destined for export. He said that the regulations draw on an in-depth analysis of the systemic problems facing the tea value chain, plausible regulatory remedies for the problems and considerations made by various stakeholders during a 14-day stakeholder consultation process held in April 2020. The new regulations have outlawed the sale of tea meant for export by private treaty, while tea buyers will be required to pay in full the value of tea purchased during an auction before collecting the tea. They have also overhauled the management of smallholder tea companies and introduced a new payment system for farmers. The new regulations follows President Uhuru Kenyatta’s directives issued in January 2020, calling for sector wide policy, administrative and regulatory reforms targeted at operational efficiency improvements in the entire tea value chain seeking to save the sector from the underwhelming and adverse cascading impact on the macro economy. FOODBUSINESSAFRICA.COM
PEOPLE
Former Zambia Procurement Manager to head commodity buying for AB InBev African Zone
AFRICA – AB InBev, the parent company of Zambian Breweries has promoted Siandele Matantilo to be the Procurement Manager for its maize, cassava, sugar, ethanol and hops supplies throughout the African Zone. Matantilo will take up his new role in South Africa – the Africa regional office of AB InBev. Prior to this appointment, he was Zambian Breweries Country Procurement Manager. While at Zambian Breweries, he scored notable success with one of them being increasing local sourcing of raw materials, which saw the birth of the company’s famous cassava project buying the root from small-scale farmers in Luapula. Excited about the promotion he stated, “I felt I had done my part in the country and contributed positively in the business unit to deserve an opportunity to showcase my skills in the zone. Developing a cassava end-to-end process over the years is one of the projects that I’m most proud of. This is due to the positive impact it has on various communities in Luapula and Northern provinces,” he says. The cassava project was established in 2016, through which the brewer is ensuring economic diversification, job creation and setting new grounds for agriculture sustainability for the nation. Since inception of the project, the brewer has bought more than 15,000 tonnes of dry cassava, giving a total income of over K21 million (US$1.5m) to the smallscale farmers. This year the brewer is targeting to buy the crop from 5,000 farmers. FOODBUSINESSAFRICA.COM
AFRICA
Fresh Produce & Grocery Show
KENYA - MAY 27-29, 2021 UGANDA - AUGUST 13-15, 2021
AFRICA'S FRUITS, VEGETABLES; MEAT, POULTRY & FISH AND OTHER FRESH PRODUCE FESTIVALS www.afmass.com/FRESH MAY/JUNE 2020 | FOOD BUSINESS AFRICA
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M&A
Carlsberg forms joint venture beer company with Marston’s in the UK at completion of the joint venture, Carlsberg revealed that it will pay up to £273 million (US$332.6m) to Marston’s, of which £34 million (US$41.42 million) will be a deferred contingent payment. If the deal closes, Carlsberg will become the controlling shareholder, owning 60% of the UK - Carlsberg UK and one of UK's joint venture, with Marston’s leading independent brewing and owning 40%. The transaction is pub retailing business, Marston’s anticipated to complete in the have announced a proposed second half of this year, subject to deal to form a joint venture beer shareholder approval at Marston’s company in the UK to be operated and competition clearance. “The creation of the joint as Carlsberg Marston’s Brewing venture is an important step Company. Initial agreements between forward for our UK business. The the companies will see Carlsberg joint venture’s brand portfolio will UK and Marston’s inject their allow us to offer a significantly brewing and distribution assets stronger beer portfolio to our into the joint venture. In addition, UK customers, and at the same time extend distribution into the
Marston’s pub estate,” CEO of Carlsberg, Cees ’t Hart said. He added that the combined business will bring wider choice, greater capacity, product innovation, and marketing and distribution efficiency benefits. The new joint venture company is hence expected to have a strong portfolio of international, national and regional beer brands and will benefit from Marston’s Beer Company’s wide distribution network. According to the terms of the proposal, the joint venture will have access to the Marston’s pub estate for its beer portfolio through a long-term strategic partnership. Marston’s operates around 1,400 pubs and also distributes to around 11,000 customers directly.
MARKET TRENDS
South Africa overtakes South Korea as the world's largest cider and fermented beverages
SOUTH AFRICA - South Africa has overtaken South Korea as the world's largest exporter of cider, perry, mead and other fermented beverages with 2018 shipments from both countries amounting to approximately 108 million liters. According to a recent report by research and consultancy firm, IndexBox, South Korea- which has long been a world leader in cider exports – has been registering 32 MAY/JUNE 2020 | FOOD BUSINESS AFRICA
a rapid decline in exports by as much as 50% within the past five years. The report indicates that in contrast, South Africa increased its shipments to other countries by offering products at the lowest prices. The report highlights that approximately 1.1 billion litres of cider, perry, mead and other fermented beverages were exported worldwide in 2018, representing a 3.8% decline compared to the previous year. During the period, cider, perry and mead exports continued to register a relatively flat trend pattern and stood at US$1.5 billion, according to Indexbox estimates. “The growth pace was the most rapid in 2017 when exports increased by 0.7% y-o-y. In that year, global cider, perry and mead exports reached their peak of 1.2 billion litres, and then declined slightly in the following year,” the report highlights.
In 2018, South Africa climbed to the top global exporter of cider, perry and mead at 108 million litres, ranking at the same position with South Korea, the long-time leader in the global cider export market followed by Sweden at 102m litres, Germany at 76m litres Ireland and UK at 73m and 66m litres respectively. However, the most notable rate of growth in terms of exports, amongst the main exporting countries, was attained by the UK, while exports for the other global leaders experienced more modest paces of growth during the 20142018 period. Comparing by the markets by Value, Indebox’s report reveals that the largest cider, perry and mead supplying countries worldwide were Japan at US$210M, Sweden at US$134M and Italy US$112M, with a combined 30% share of global exports. FOODBUSINESSAFRICA.COM
PEOPLE
Danone North America gets new CEO, forms Plant-based Acceleration Unit USA – Food and dairy giant Danone has appointed Shane Grant as Executive Vice President and CEO Danone North America to lead its Essential Dairy and Plant-Based (EDP) as part of the company’s strategy to better align the business and unlock new opportunities. EDP North America is Danone’s largest business and the biggest B Corp in the World. To further ensure that the business moves into new chapter in the company has also announced a number of key changes in the business. For the past three years, Danone says that the global EDP organization has focused on implementing a successful three-year integration program, especially following the 2017 acquisition of WhiteWave Foods for US$12.5 billion. At that time, the French food and beverage giant established a solid
operational backbone, executed a strategy that, for the first time, blended and cross-fertilized the essential dairy and plant-based elements of the category to meet the rising demand from consumers adopting flexitarian diets. In addition, innovation capabilities were upscaled, and importantly the company notes that the US$300 millon run-rate synergies plan at the core of WhiteWave’s acquisition was delivered. Danone now believes that the transformation of the EDP business in the region provides a strong foundation for it to move into a new chapter of growth – “one that captures the realities of a fast-changing market.” In order to achieve this, the company has decided to elevate EDP North America at Danone Executive Committee level and strengthen the local focus of its organization.
Danone has resolved to run the business as a separate business, led by a Shane Grant - who assumed office on May 11, 2020. In addition, the company unveiled that it will create a Plantbased Acceleration Unit to unleash further growth opportunities across Danone and support its ambitions of expanding into new geographies outside North America and more than double its plant-based sales worldwide from €2 billion in 2019 to around €5 billion by 2025. It will also expand the Unit into new categories, such as coffee. Francisco Camacho will lead the Plant-based Acceleration Unit in addition to his current role in leading Essential Dairy and PlantBased activities in Europe, Latin America, CIS and Aspame as Executive Vice President, EDP International.
AFRICA
COFFEE & TEA SHOW KENYA - MAY 27-29, 2021 UGANDA - AUGUST 13-15, 2021
AFRICA'S PACKAGED COFFEE, TEA, COCOA AND OTHER HOT BEVERAGES FESTIVALS
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TECHNOLOGY
Twiga Foods integrates smart crate systems into its operations operations. The Smart Crate, deemed to be the first of its kind in the region, is made from 100% recycled plastic, in line with Silafrica’s commitment to a circular economy, while creating responsible and sustainable solutions that respect the planet and its biodiversity. This new tech solution gives the farmers a way of tracking their produce until it reaches the market as the crates are fitted with Near-Field Communication (NFC) and Radio Frequency Identification (RFID), which relay real-time data as the crates move from one point to the other. The crate will be frequently scanned at specific checkpoints within the course of its journey using the tags on the crates. The technology enables the farmers to conveniently get key information about the product with a single tap KENYA - Twiga Foods, a Kenyan technology food of their phone and actively get involved throughout distribution platform has partnered with plastic and its transit process. Being an upgrade to the regular packaging solutions provider, Silafrica to create and crates, it would enable geolocation advantages as assimilate the use of smart crate systems into their well. REGULATORY & POLICY
Uganda signs into law the Sugar Act 2020 to streamline the sugar industry
UGANDA - Uganda's President, Yoweri Museveni has signed into law the Sugar Act 2020 that will govern the country’s sugar sector. "In order to streamline the management of the sugar industry growers, out-growers, millers, outgrower associations and other relevant parties shall enter into agreements in this Act referred to as "sugar industry agreements", which shall set out the respective rights, duties and obligations," the Act states. The Act also addresses pricing of sugarcane through a formula based on weight of the sugar cane multiplied by rendement (tonnes of sugar made out 34 MAY/JUNE 2020 | FOOD BUSINESS AFRICA
of every 100 tonnes of sugarcane) multiplied by a percentage negotiated by the different parties. However, sugar producers say the law has ignored some issues that were set forth such as zoning of the sugarcane producing areas. Major players in the industry had claimed that the exclusion zones were necessary to prevent poaching of cane from outgrowers by rival factories, but Parliament said the move was being pushed to kill competition. While rejecting the Bill last year, President Museveni had reasoned that not everyone, for instance people with about six acres of land, should be involved in sugarcane growing, noting it should be left to large scale farmers. In the Bill, government had proposed zoning of 25 kilometers, which would essentially not allow establishment of a sugar mill within such a distance as well as proposing that out growers in particular areas should only supply cane to mills within that area. However, Members of Parliament, especially from the Busoga sub-region rejected the proposals, arguing that small-scale farmers cannot be left out as long as they can find factories where they can sell their cane. The Bill has already been gazetted into an Act after the President had signed it. However, the new Act is said to be silent about out-growers and other controversial issues. The new Uganda Sugar Board will handle these issues, which will be responsible for licensing of industry players. FOODBUSINESSAFRICA.COM
Sustainability
BUSINESS AFRICA
TRENDS IN RENEWABLE ENERGY • WATER • WASTE • AIR • MANUFACTURING • MOBILITY • INFRASTRUCTURE • COMMUNITIES • RESOURCES • POLICY & REGULATION
STRATEGY
Huhtamaki supports global circular economy initiatives FINLAND – Huhtamaki, a global food and drinks packaging firm based in Finland, has announced that it will be donating EUR3 million (US$3.28 million) towards circular economy initiatives aimed at addressing global sustainability challenges. The donation, which came at the heights of the company’s celebration of its 100-year anniversary, will be used to fund innovative and emerging technologies to clean plastic waste as well as providing education and training on waste management. “We are acting today, educating for tomorrow and funding innovation for the future, making a difference where it matters most to help address global sustainability challenges and build circular economy initiatives,” the company said. Among the initiatives that the company has earmarked to support include cleaning plastic waste from the Mithi River in Mumbai, India through a partnership with United Nations Technology
Innovation Labs, VTT Technical Research Centre of Finland, Finnish cleantech start-up RiverRecycle and an India-based citizen-led environmental movement Earth5R. It will also be donating close to EUR 1 million to the UK waste management charity WasteAid to fund projects that will provide education and training on waste management and circular systems in South Africa, Vietnam, and India. The packaging supplier added that it will also avail an additional EUR 1 million to Food System 6, a nonprofit accelerator focused on innovations for food and agriculture to bolster investments and innovation for a circular economy through the set-up of the start-up cohort program. The company recently launched its renewed longterm 2030 strategy and sustainability ambitions seeking to become carbon neutral in its production, make 100% of its products recyclable, compostable or reusable and further source 100% of fiber from recycled or certified sources.
STRATEGY
Pernod Ricard to eliminate single-use plastic point-of-sale items by 2021
FRANCE - French wine and spirits group Pernod Ricard has announced that it will end the use of singleuse plastic point-of-sale (POS) items by 2021 as part of its commitment towards its “2030 Sustainability & Responsibility roadmap - Good Times from Good Place” pledge. Pernod Ricard had initially planned the ban for 2025, but following this announcement, the goal will be achieved four years ahead of the initial target. In order to drive innovation and provide guidance throughout the group, Pernod Ricard said that it has shared Global Sustainable POS Guidelines with its 90 affiliates. The guidelines specify which materials can no longer be used and how they can be replaced, based FOODBUSINESSAFRICA.COM
on five R’s - Rethink, Reduce, Reuse, Recycle and Respect - and respond to consumers’ increasing desire for less waste and concrete actions to reduce environmental impacts from their favorite brands. “The end of single-use plastic POS items is one of the many ways we will do our share to bring positive change to the world we live in, and achieving this goal four years ahead of schedule underlines our employees’ commitment to do so,” Pernod Ricard’s Chairman & CEO, Alexandre Ricard said. This announcement represents a huge step towards the Jameson and Absolut Vodka brands owner to drastically reduce the use of single-use plastic on a global scale, reinforcing the Group’s commitment to the Ellen MacArthur Foundation’s New Plastics Economy. In early 2018 Pernod Ricard banned plastic straws and stirrers at all its events, and as part of its 2030 Sustainability & Responsibility roadmap, the Group has also committed to 100% reusable, recyclable or compostable POS items by 2030. It’s 2030 Sustainability & Responsibility roadmap has also committed to the being water balanced in all high-risk watersheds, replenishing 100% of water consumption from production sites by 2030. MAY/JUNE 2020 | FOOD BUSINESS AFRICA
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STRATEGY
Improving lives for generations: Tate & Lyle unveils new sustainability targets UK - Tate & Lyle, a leading supplier of food and beverage ingredients and solutions, has announced a set of new environmental targets and commitments seeking to reduce greenhouse gas emissions, eliminate coal from its operations, reduce water use and maintain support for sustainable agriculture. The company’s new environmental targets seek to deliver 30% absolute reduction in Scope I and 2 CO2 emissions (direct emissions from owned or controlled sources and indirect emissions from the generation of purchased energy) by 2030, with an ambition to reach 20% reduction by 2025. The ingredients supplier has also set a goal to achieve a 15% absolute reduction in Scope 3 CO2 emissions (indirect emissions such as the growing and production of purchased materials, including corn, and transportation of purchased fuels and other goods) by 2030. In addition, the company announced that it is aiming to ensure 100% of its waste is beneficially used, with an ambition to reach 75% by 2025. Within the next decade, Tate & Lyle is also seeking to cut its water usage by 15%. The company has said that these targets are aligned to the delivery of its purpose, ‘Improving Lives for Generations’, a key pillar of which is to care for the planet and protect its natural resources for the benefit of future generations. By adopting these targets, it commits to eliminate use of coal from its operations by 2025, establish its Scope 1, 2 and 3 CO2 emissions reductions as Science-Based Targets. It has further committed to maintaining a sustainable acreage equivalent to the volume of corn it buys globally each year (currently 1.5 million acres) and through partnerships accelerate the adoption of conservation practices.
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INVESTMENTS
PepsiCo-backed plastic recycling fund invests US$6m in two Asian firms
SINGAPORE – The Circulate Capital Ocean Fund (CCOF), an investment fund dedicated to the alleviating the ocean plastic pollution crisis in Asia, has made its inaugural investments in two plastic recycling companies located in India and Indonesia for a total investment of US$6 million. CCOF is a US$106 million fund that was established by Singapore based investment firm Circulate Capital, and is backed by several of the world’s leading companies, including PepsiCo, the first investor; Procter & Gamble; Dow; Danone; Unilever; and The Coca-Cola Company. By supporting the Fund, the investors commit capital towards advancing a circular economy, and further contribute technical and procurement expertise to help the portfolio scale and drive maximum impact. CCOF’s first investments include companies at the fore front of their industries, specializing in building markets to collect and recycle local plastic waste into raw materials that can become tradable commodities. The Fund has invested in Mumbai-based Lucro Plastecycle, a homegrown Indian manufacturer that developed an integrated process to collect, sort and recycle difficult-to-manage flexible plastic for its own production of flexible products. PT Tridi Oasis Group, an inJakarta, Indonesia, female-led, company specializing in recycling PET bottles into rPET flakes, which are used to manufacture circular packaging and textiles, will also benefit from the US$6m investment. Circulate Capital said that the investments made by CCOF will help to build markets and circular plastic value chains that prevent plastic leakage and support local communities. In addition, Circulate Capital revealed that it is supporting these companies to manage the direct consequences of the Covid-19 crisis on their businesses while also providing access to short-term lines of credit when possible FOODBUSINESSAFRICA.COM
REGULATORY & POLICY
Coalition calls on governments to align Covid-19 economic efforts with attaining net-zero emissions WORLD – Over 150 multinational companies including, Carlsberg, Unilever, Coca-Cola European Partners, Nestlé, Royal DSM, among others have signed a statement urging Governments around the world to align their COVID-19 economic aid and recovery efforts with the latest climate science. The companies have reaffirmed their own sciencebased commitments to achieving net-zero carbon emissions and further called on governments to prioritize a faster and fairer transition from a grey to a green economy. As debates on recovery packages around the world ramp up, the companies, which are all part of the Science Based Targets initiatives, are calling for policies that will build resilience against future shocks by supporting efforts to hold global temperature rise to within 1.5°C above pre-industrial levels, in line with reaching net-zero emissions well before 2050. Through the initiative, the 155 companies - with a combined market capitalization of over US$2.4 trillion and representing over 5 million employees - intend to unite businesses and governments in recovering better and delivering the greatest positive impact for people, prosperity, and the planet. The signatories will continue to demonstrate that the best decisions and actions are grounded in science; invest in recovery and resilience for systemic socio-economic transformations and work with governments and scale up the movement. “To ensure we recover better, we are calling on Governments and policy-makers to match our ambitions in their recovery efforts aligned with reaching net-zero emissions well before 2050,” a joint statement issued by the companies reads in part. “If we work together, these efforts will help reduce vulnerability to future shocks and disasters, and build community resilience. A systemic shift to a zero-carbon and resilient economy is within our reach — our only future depends on making this vision a reality.” The call is backed by a study from Oxford University, which highlights that policy and spending that incorporates climate targets can reduce vulnerability to future shocks and disasters, create good jobs, reduce emissions and ensure clean air. The signatories span 34 sectors and have headquarters in 33 countries. Bayer, Firmenich, Glovo, Nomad Foods, Diageo, Symrise, Syngenta Group, Takasago International Corporation, Talawakelle Tea Estates, Tate & Lyle and Pernod Ricard are also part of the signatories.
FOODBUSINESSAFRICA.COM
AFRICA HOTELS RESTAURANTS & CATERING EXPO
KENYA - MAY 27-29, 2021 UGANDA - AUGUST 13-15, 2021
AFRICA'S SHOWCASE EVENTS FOR THE HOTEL, RESTAURANTS & CATERING INDUSTRY www.afmass.com/HOSPITALITY
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STRATEGY
Campbell Soup announces new sustainable packaging goals
USA – Campbell Soup Company has announced new packaging sustainability goals to reduce packaging waste by increasing circularity through keeping materials in use and out of landfills. The company said that its new goals are designed to address all phases of the packaging lifecycle, from sourcing to end-of-life, including recycling or composting, where its holistic approach aims to
reduce packaging waste through investments in recyclability, use of recycled content, and consumer education and infrastructure with four goals in mind The food and beverage firm has set out an ambition to transition 100% of its packaging to recyclable or industrially compostable designs and materials by 2030. It also targets to increase the use of postconsumer recycled content and incorporate 25% post-consumer recycled content into polyethylene terephthalate (PET) bottles by 2030. In addition, the company plans to drive increases in recycling rates through standardized on-pack labeling by including the How2Recycle label on 100% of packaging by 2022. “Our new packaging commitments provide a roadmap to further reduce the environmental impact of our packaging over time and build upon our history of sustainability,” said Craig Slavtcheff, Campbell’s Executive Vice President, Global Research and Development. The company has also committed to expanding access to recycling and advance the development of infrastructure to improve the collection and recycling of packaging by building and investing in partnerships with peers and industry groups.
INVESTMENTS
Coca-Cola Amatil teams up with Dynapack Asia to build recycling plant in Indonesia
INDONESIA – Coca-Cola Amatil Indonesia has entered into an agreement with its long-term packaging partner Dynapack Asia, to build a stateof-the-art bottle-to-bottle grade Polyethylene Terephthalate (PET) recycling facility in Indonesia. Coca-Cola Amatil and Dynapack said that they will work together through a proof of concept phase, which is intended to consider a potential plant’s economic feasibility, size, scale and location, end-toend requirements and potential integration into each company’s value chains. President Director of Coca-Cola Amatil Indonesia, Kadir Gunduz, revealed Amatil and Dynapack had established a joint project team to leverage 38 MAY/JUNE 2020 | FOOD BUSINESS AFRICA
each company’s expertise in respective parts of the production and recycling process, as part of considering this facility. “This joint venture represents a real environmental step-change in our move towards a more sustainable approach to plastic and a circular economy by bringing low-quality PET waste back to virgin-quality, food-grade PET, which also echoes The Coca-Cola Company’s ‘World Without Waste’ vision,” Mr. Gunduz said. “It is a significant step towards Amatil becoming self-sustaining in the plastic materials we use, ensuring a closed-loop for plastic beverage packaging in Indonesia as a whole.” Gunduz further noted that the use of recycled plastic could reduce the amount of new plastic resin the company uses by an estimated 25,000 tonnes each year in 2022, aligning with the commitment as part of the steering board at National Plastic Action Partnership to supports Indonesia’s National Action Plan in achieving a 70% reduction in the nation’s marine plastic debris by 2025. Dynapack Asia also intends to collaborate with its customers to increase the use of recycled materials and products, strengthening the region’s recycling ecosystem and achieving a circular economy in South East Asia and China. FOODBUSINESSAFRICA.COM
ENERGY
Chr. Hansen secures green energy supply deal to power sustainability ambitions DENMARK – Global bioscience company, Chr. Hansen has signed a 10-year agreement Power Purchase Agreement (PPA) with Danish company, Better Energy to power its Denmark operations with green electricity. Under the agreement, Better Energy Denmark will supply green energy to the ingredients supplier from two new solar parks that have just been taken into operation. Chr. Hansen further noted that Better Energy Denmark will also support the agreement by being responsible for creating a balance between consumption and production of electricity and handling the difference that will always exist when the sun doesn’t shine. In that way, the company said that its energy supply will be secured with power production from a mix of several other renewable sources like wind and biogas. The move will see Chr. Hansen’s cultures and natural colors produced on 100% green energy in Denmark. Chr. Hansen revealed that it will take 67% of the annual energy production from the new parks, which
corresponds to the consumption of 15,000 Danish households and reflects the company’s annual energy demand for its operations in Denmark, which makes up 40% of the global consumption for the Group. The Danish company, which was awarded as the world’s most sustainable company in 2019 and this year came in second on the prestigious list published by Canadian Corporate Knights, said that it is committed to minimizing its carbon footprint. According to an update by the company, its production plant in Copenhagen, Denmark’s capital, accounts for more than 70% of Chr. Hansen Denmark’s total electricity consumption, whereas headquarters in Hoersholm north of Copenhagen accounts for around 15%. Its two other Danish factories account for the rest. The company expects to replicate the model in other countries. Jesper Deela Nielsen, senior manager in Global Sourcing, Chr. Hansen revealed that the company is in dialogue with different suppliers of renewable energy in the US to power its operations with green energy.
AFRICA
HEALTH
&WELLNESS EXPO
KENYA - MAY 27-29, 2021 UGANDA - AUGUST 13-15, 2021
THE LEADING SHOWCASE EVENTS FOR NUTRITION, HEALTH & WELLNESS PRODUCTS & SERVICES.
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MAY/JUNE 2020 | FOOD BUSINESS AFRICA
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ANIMAL WELFARE
Nestle and Tesco lead in animal welfare, as most food giants register weak structures, new reports indicates However, most companies fail to apply the same policies, standards and commitments in Africa
AFRICA — According to a recently released report by World Animal Protection, leading global food companies are demonstrating that action on animal welfare is possible within a competitive environment but much more needs to be done as some of the major global food companies are severely lacking on Farm Animal Welfare policies and standards. The report, published by the Business Benchmark on Farm Animal Welfare (BBFAW), an initiative backed by World Animal Protection and Compassion in World Farming, ranks 150 global food companies on farm animal welfare standards across six tiers. Tier 1 is at the top, demonstrating leadership on farm animal welfare, and Tier 6 is at the bottom, indicating that companies have yet to acknowledge animal welfare as a business issue. The report showed that 87% of the companies acknowledge farm animal welfare is a relevant
business issue with 75% of them having formal overarching policies on the same. However, 64% of companies assessed are in the lower three tiers. According to the report, companies such as McDonald’s, Starbucks and Subway with presence in Africa are among the ten companies that have not shown any demonstrable improvement in their ranking since 2012. While many companies are showing a lack of action, the report showed that some progress is being made with 63% of companies describing how they monitor and audit the farm animal welfare performance of their suppliers, including a commitment to reduce or avoid routine use of antibiotics. Nestlé and Tesco ranked as the leaders in farm animal welfare being rank at tier 2, while Yum! Brands (KFC), Unilever and Domino’s Pizza Group are in tier 3. Carrefour, Restaurants Brand International (Burger King) and Subway are in Tier 4. However, the survey showed that these brands do not seem to be applying the policies, standards or commitments to their franchises in Africa. The BBFAW’s 2019 company and investor surveys shows that customer interest in animal welfare is the primary driver for business action for 79% of companies, while 82% of investors consider animal welfare to be an investment risk. According to the survey, consumer interest and growing momentum for companies to take an interest in animal welfare is the main reason why many of the world’s most influential food companies are showing willingness to change, which is why company performance in the benchmark continues to improve year on year.
STRATEGY
ADM announces new goals to reduce water intensity, landfill waste USA – Agricultural giant ADM has announced a set of new commitments to reduce water intensity by 10% and achieve a 90% landfill diversion rate by 2035 as part of an aggressive plan to continue to reduce the company’s environmental footprint. The commitments were announced as part of the company’s Corporate Sustainability Report, which also includes updates on ADM’s overall sustainability journey. “The importance of these commitments becomes even clearer amid an unprecedented challenge such as the COVID-19 pandemic,” said Chairman and CEO Juan Luciano. “Companies like ADM are playing a 40 MAY/JUNE 2020 | FOOD BUSINESS AFRICA
critical role in supporting and maintaining the global food chain. And while we are focused on operating safely and effectively today, we cannot lose sight of tomorrow.” Earlier this year, the food processor announced plans to reduce absolute greenhouse gas emissions by 25% and energy intensity by 15% during the same timeframe. In addition, ADM committed to developing water reduction plans for high-risk and water-scarce areas. The company noted that the new targets align with the United Nations Sustainable Development Goals, and will be achieved through reusing and recycling water and finding alternative uses for waste. FOODBUSINESSAFRICA.COM
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DORMANS COFFEE 70 years of investing in growth and quality enhancement East Africa’s leading coffee trading, roasting and agronomy company, Dormans Group is celebrating 70 years of growth, success and impact on Kenya and the region’s economy. Food Business Africa magazine had a discussion with Rozy Rana, who leads the Group’s coffee roasting business, Dormans Coffee, to highlight the company’s history and its recent investment in a new facility near Nairobi, Kenya.
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Dorman's Group's new facility FOODBUSINESSAFRICA.COM
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Every batch is roasted and tasted against bench marks
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s one of the most important crops in the region’s food and agriculture industries, coffee reigned supreme as Kenya’s leading foreign exchange earner after independence. While that ranking has gradually dropped to 4th place, the coffee sector continues to employ millions of people directly and indirectly. The history of coffee in East Africa would be incomplete without the mention of Dormans, the region’s leading player since 1950. Pioneers Charles and Ellen Dorman set up trading operations and, by establishing Kenya’s first coffee roastery, introduced Kenyans to the unique and wonderful world of coffee drinking. As they celebrate their ‘milestone’ 70th anniversary, we reminisce about the stories and the strides that have dotted the Dormans journey since its founding. Today, the Dormans Group of companies has trading, milling and agronomy operations in Kenya, Tanzania & Rwanda. The roasting plant has been modernized and the company has refreshed its brand image. According to Rozy Rana, the Managing Director of Dormans Coffee Ltd, Mrs. Dorman set up the roastery in fulfillment of her desire to enable Kenyans to drink the wonderful beverage they were producing. She also developed a wide range of coffee blends to meet diverse taste preferences. The investment in the roastery was subsidized by export operations. Dormans Coffee Ltd is the roasting arm of the Dormans Group, and Rozy Rana oversees the day-today operations of the enterprise. 44 MAY/JUNE 2020 | FOOD BUSINESS AFRICA
Promoting domestic consumption in coffeeproducing countries is often cited as a measure for reducing their dependence on overseas markets. The push towards local value addition has received top priority from the government. When we had a discussion with Rozy Rana, she stated as follows: “There is a misconception that local consumption of coffee has increased exponentially. There has been uptake, but only about 5% of the coffee produced in Kenya is consumed locally. The rest is exported in its green form to importers who roast, blend and brand the coffee under their own labels.” Historically, Kenyans drank tea. Coffee was perceived as an elitist product, which is why for a long time it was an ‘export only’ commodity. “It takes time to build or change a culture. We have introduced many initiatives over the years to boost local consumption of coffee. We are happy to see greater appreciation for coffee nowadays. More people are investing in the setting up of coffee shops and employing trained Baristas. So we are optimistic that local consumption will continue to grow. We still have a long way to go and increasing local demand and consumption remains an uphill task.” Among the roaster’s initiatives towards increasing local consumption is Dorman’s creative mix of coffee blends which are available in leading supermarkets and have gained popularity with local coffee buffs. “We are anxiously looking forward to the day when ‘Dormans’ will be synonymous with ‘Africa’s best coffee’! FOODBUSINESSAFRICA.COM
MY FACTORY, MY STORY The company showcases and educates consumers on the right way to make coffee. This service is very popular with hotels, restaurants and coffee-shop chains. Dormans has supported the growth of coffee sales in these institutions. “I can give you the best ground coffee, but if you don’t know how to make it, you could have a disappointing experience. With coffee, customers want more than just a good product. We help these businesses to offer their customers a delightful coffee experience.” Many firsts to boost consumption In 2002, Dormans established Africa’s first Barista training school, The Nairobi School of Coffee, where prospective baristas are taught the art of coffee making. The School has connected many of the graduates to the company’s hospitality clients, thereby contributing to the employment of thousands of youth over the years. The School’s certificate is well sought-after by employers in the region and in the Middle East who are seeking to recruit qualified baristas. In 2003, Dormans pioneered the annual Kenya National Barista Championships. The event has helped enhance awareness of the barista as a professional coffee maker. The winners compete at the World Barista Championships, an event organized by the Specialty Coffee Association. Dormans also started its own chain of coffee shops in 2004. The venture was sold in 2013 to a partner to enable them focus on the core business. In 2005, it introduced ‘Coffee on the Go’, a mobile coffee cart that serves delightful coffee at functions and events across the country, again a first in the region. History and price are not the only challenges faced by the company in their quest to grow local consumption. Rozy reveals there are many more.
IN NUMBERS
1.4M
KILOWATT HOURS OF ELECTRICITY GENERATED BY THE SOLAR PANELS INSTALLED ON TOP OF THE NEW FACILITY. “To name a few - first, there is a poor payment culture by local supermarkets which leads to increased financing costs. We have to wait for over 60 days for our payments. We also lost a lot of money supporting local supermarket chains like Nakumatt and Uchumi, which collapsed and defaulted on their payments. Secondly, there is limited awareness of what constitutes good quality. Low barriers to entry and poor regulation have resulted in new players with no coffee expertise entering the market and spreading inaccurate information on what constitutes good coffee. For instance, newcomers have told customers that the blackberry flavor in Kenya coffee is not good for them. Others have told consumers that the darker the coffee is, the more flavorful it is. These are myths. Kenya coffee is renowned for its blackberry/citrus flavor. It is a unique taste for which global consumers pay a premium. Additionally, judging the coffee by color alone would be foolhardy. Taste is subjective; however, it is through drinking a brew made from a medium roast profile that you can experience the nuances, aroma and fine characteristics of the coffee in the drink. Dark roasts are best for strong full-bodied coffee and espresso-based drinks.”
The company carries out regular training sessions for its staff FOODBUSINESSAFRICA.COM
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The company has coffee blends that meet the varied taste profiles of its costomers
When asked what has made the Dormans brand popular amongst households in Kenya, Rozy replied, “Over the years we have earned the trust of our consumers. I believe it has to do with the meticulous attention we invest in giving value to the customer, and ensuring consistency in the quality of the product. Once a customer likes a product, maintaining consistency becomes very important. We roast and pack coffee every day at our factory, and there are a number of quality checks along the way. We have experts who analyze the green beans and the roast profile, and certified tasters, known as liquorers, who taste every batch that is roasted against the agreed bench marks for the blend. It is quite an elaborate process.” So hard work and knowledge of coffee are indeed big factors that have contributed to the Dormans success story, but Rozy adds that, “The cornerstone is the passion our teams have for coffee. Coffee is in the company’s lifeblood. It was probably inherited from Mrs. Dorman. While I never met her personally, I have been told that she was popularly known as the ‘Grand Dame of Coffee’ because of her commitment to and passion for the beverage. Certainly when I joined, the passion was already instilled in the culture. It probably explains why we have very little turnover in staff. Take for instance our roasters – some of them have been with us for over 20 years. Many of our Baristas who support the hospitality sector have been with the company for a similar period. When I joined the Company at a tender age, my knowledge of coffee was very limited. It was a steep learning curve to start with, but before long the passion that was inherent in the teams infected me. That passion is so contagious that 28 years later, I still love what I do.” The 70th anniversary is a truly befitting time to celebrate the decades of hard work by the company’s founders, managers and employees – past and present. “It would be remiss of me not to mention our Chairman, Jeremy Block, who has guided the vision of the company for more than 30 years. His passion and focus have enabled the company to expand aggressively, pro-actively taking advantage of new opportunities over the years.”
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New site, new horizons To continue with its quest to meet changing market demand for its roasted coffee products and to expand the scope of its activities, Dormans moved its entire operation in 2017 to Tatu City, a new development about 30 kilometres from the centre of Nairobi that has attracted a large number of local, regional and multinational manufacturing, logistics and housing firms. In addition to coffee storage, processing, packaging, end-product stores, and laboratories for in-process and end product analysis, the facility hosts the company’s headquarters, with a large office block, a barista training school, and a coffee grading and tasting laboratory. The office block has a trading floor where the company’s trading staff can follow, in real time, the progress of the New York coffee exchange. The Group’s operations were previously spread over different locations. “Moving to this site has been a huge and exciting step,” Rozy exclaims confidently. “It has served two key purposes: getting all our staff under one roof, and investing in technology that provides greater quality assurance to our customers. We have modernized our processes, enhanced our efficiencies with a more robust food safety management system, and undertaken a complete refreshment of the Dormans brand. Our new packs proudly hold their own on the shelves in the global market place. Our standards match those of sophisticated roasters in other parts of world.” Safety at the heart of the business According to Rozy, the company has taken its lead in the coffee industry many notches higher by implementing food safety and quality management systems that separate it from its peers. “Safety and the quality and consistency of our products are the most critical considerations in our business. We were the first coffee plant in East Africa to be certified in the year 2007 with ISO 22000:2005; before that, we were the only coffee plan regionally with HACCP certification. In 2008 we upgraded to FSSC 22000, one of the most respected global sets of food safety standards. As these standards are site-specific, it was a priority to ensure the certification was updated as soon as we settled into the new site.” “The move to the new site has renewed the vigour and the capability of the team to deliver the best tasting coffee that meets and surpasses the set quality and food safety parameters,” the MD divulges. “It has significantly enhanced the efficiencies in the flow of processes.” “While we have internal and external audits for our certifications, some client commissioned audits and checks are even more rigid than those of the certification bodies. We are happy to partner with customers who take food safety very seriously FOODBUSINESSAFRICA.COM
MY FACTORY, MY STORY because this helps us to consistently remain on top of the game.” Products and markets The company has a leading position in Kenya for a number of coffee products including roast and ground coffee, instant coffee, coffee capsules, premixes, syrups and premium tea. Through their everfresh Dormans brand, the company distributes its products to hotels, restaurants, coffee shop chains, supermarkets and retailers in Kenya and regionally. Roasted and ground coffee account for the bulk of the company’s production and sales. The company has developed special blends that match the specific preferences of their consumers. From the intense and bold Dormans Espresso, to the rich and traditional Dormans Arabica, to the bright and complex Dormans AA Blue Mountain, the company has 16 varieties of blends. Within this category, they also have Dormans Decaf, a smooth and mild decaffeinated coffee variant for those who prefer their beverage without the caffeine. The company’s instant coffee brands are available in granulated, fine and decaffeinated options in packages of 250g, 100g and 50g, plus in single-serve 2g sticks. The recently introduced coffee capsules range include Espresso, Suprema, Kilimanjaro and Decaf options, with each pack of 125g containing 25 capsules. The company’s tea product line is also available in capsule format. A recent and already popular innovation is the range of 3-in-1 coffee premixes. There are two variants of premixes – the classic and the Irish coffee option; Dormans has introduced a range of flavoured syrups, which include popular variants like vanilla, coconut and lime, as well as exotic variants like grenadine, blue curacao, peppermint, caramel and hazelnut. Munyinyi Kiiru, the company’s new product development manager explains that with young Millennials driving food consumption, the new product development team redirected its focus to meet the budding needs of this key demographic. “Adding new, interesting flavour notes to regular drinks is a concept that the Millennial consumer appreciates. Our flavoured syrups add that extra punch so that these young, experimental consumers can add individuality to their drinks.” He further explains that the introduction of the coffee and tea capsules and the coffee mixes seek to meet consumer expectations for convenient products that are quick and easy to use and pleasant to the palate. Technology at the core “Coffee is both an art and a science,” states Rozy. “Our roasters are from Probat Werke – the leading German manufacturer of drum roasting machines. These enable us to create all kinds of roast profiles, FOODBUSINESSAFRICA.COM
Coffee roasting is both a science and art. The Mastrer Roaster keeps a keen eye on the coffee during the roasting process
Each blend has unique charcteristics
The Dormans barista team setting up to serve coffee
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MY FACTORY, MY STORY
The team - left to right: Munyinyi Kiiru (New Product Development Manager); Ransley Sokia (Production Manager); Naomi Nderi (Head of Hospitality); Hannington Kirombo (Chief Accountant); Rozy Rana (Managing Director); and Ken Teyie (Sales Manager)
even for the most specialized applications. Though we have very sophisticated equipment, it is critical for the Master Roaster to have the right skills to supervise the roasting process. The Master Roaster will listen for the characteristic ‘crack’ that informs him on how close the coffee is to reaching the required roast profile. Our roast profiles are quite specific, and often a few seconds can make a big difference to the taste of the final drink. I cannot overstate the importance of the Master Roaster’s expertise in dropping the coffee from the roaster at just the right time. This important combination of skill and state-of-the-art technology is necessary to mitigate any risks to quality.” Rozy reveals that, on moving to the new site, the company was able to install a Quad-Pack line enabling the launch of modern and visually appealing packs. The coffee is filled into protective foil bags, flushed with nitrogen and a one way freshness valve is fitted onto the pack before it is sealed. The nitrogen and the one way valve serve very important roles. Nitrogen displaces oxygen and is used in preserving the freshness of packaged food products. The one way valve enables gasses produced by the roasted coffee to escape but blocks the entry of air and moisture, thereby locking in the flavor and aroma and enhancing the shelf life of the pack. “Our investment in talent and technology helps to keep us competitive, sustainable and innovative.” People focused company “Coffee is an experiential product and our success hinges on our human resource. Our diverse and talented staff is the lifeblood of our business. I am delighted to say that we have the right team to deliver the company’s mandate, which includes the right 48 MAY/JUNE 2020 | FOOD BUSINESS AFRICA
culture. When we bring new talent into the company, coffee becomes their raison d’etre in no time. It just happens. The passion for coffee is instilled in the corporate culture here at Dormans. That’s the best part about working at Dormans. There is positive energy flowing and we enjoy what we do. Take for instance my production team or even my hospitality team – it doesn’t surprise me to see them together at the canteen over lunch, discussing minute changes to the roast profile or explaining different ways of making coffee to the canteen lady. Our staff is always willing to train interns, and interns who spend time at the company, ask to return upon completion of their studies. This has helped us remain at the forefront of innovation because new ideas keep flowing. It’s the corporate culture here!” Sustainability agenda The Group is committed to a strong sustainability agenda. “Sustainability is one of our core values and we work closely with several partners. One of our partner companies offers agronomy services to farmers, advising them on best husbandry practices to help improve coffee quality and yields. Another partner we support annually is Mt. Kenyan Trust. It is critical to protect and conserve the environment surrounding our wonderful coffee growing areas, and it is no secret that this is under threat. We opted to partner with Mt. Kenya Trust because their central mission is to protect and conserve the environment.” Since 1992, the company has sponsored an annual coffee quality competition, which rewards farmers who produce the best quality coffee. Rozy adds that the Dormans ‘Safari’ Coffee Blend was the first Fair Trade certified blend to be sold in the local market, FOODBUSINESSAFRICA.COM
THE PASSION FOR COFFEE IS INSTILLED IN THE CORPORATE CULTURE HERE AT DORMANS. THAT’S THE BEST PART ABOUT WORKING AT DORMANS. THERE IS POSITIVE ENERGY FLOWING AND WE ENJOY WHAT WE DO - ROZY RANA
where growers and farmers benefit through premium prices for their coffee. “After all, trade is not only about money but also about people, their families, their livelihoods, and the environment”. In one of the largest sustainability projects in the food industry, the company partnered with Tatu City by providing 5,700 square metres of roof space to install and commission 2,880 solar modules that produce 1.4 million kilowatt-hours of electricity per year from solar energy. “This ground breaking project reduces carbon dioxide emissions by at least 1 million kilograms per year and not only provide us with a clean source of energy but also insulates the warehouse roofs to help with climate control for the coffee being stored there,” Rozy explains, adding that excess power produced from the plant is sold back to the grid for re-distribution through Tatu City. With such a strong sustainability agenda and a growing middle class in the region, Dormans Coffee is set to chart new territory going into the future, despite recent setbacks due to the Covid-19 pandemic. “The business has been affected, especially our local roasted sales, but we remain confident about the future. Our focus is on ensuring the safety and welfare of our employees. We also want to do whatever we can to support our customers, especially the hospitality institutions that have been hit hard during this tough time,” she concludes.
FOODBUSINESSAFRICA.COM
ABOUT DORMANS COFFEE
GREAT HISTORY OF COFFEE LEADERSHIP
The late Charles Dorman who established the company and set up the first coffee roasting business in Kenya in 1950”
It was an Englishman and trader, Charles Dorman who established the company and set up the first coffee roasting business in Kenya in 1950. Charles was a true pioneer in the coffee industry, serving as Chairman of the East African Mild Coffee Association as early as 1939. Ellen, who was sent by her parents to Kenya from Germany to escape the atrocities of the Second World War, married Charles in 1945. Since the 1950’s, Dormans has been perfecting signature coffee blends by implementing rigorous quality control standards, ensuring consistency and giving constant attention to customer specifications at every step of the production process.
When Charles died in 1960, Ellen carried on passionately with the business. She later became known as the “Grand Old Dame of Coffee” because of her commitment to the industry. In 1986 Jeremy Block, in partnership with a multinational purchased the business from a retiring Ellen. Over the years, Dormans has expanded regionally and today the Group of companies has a roasting operation in and trading, milling and agronomy operations in Kenya, Tanzania & Rwanda. In 2017, Dormans set up their headquarters at Tatu City. This site houses the company’s coffee storage, processing and trading operations and places it on a new pedestal for future growth and impact on the coffee industry in Kenya and the region. MAY/JUNE 2020 | FOOD BUSINESS AFRICA
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MY FACTORY, MY STORY
ABOUT ROZY RANA
LEADERSHIP WITH PASSION
R
ozy Rana has extensive experience in senior management. Having joined the Dorman group of companies nearly 30 years ago, she has held various roles in operations, administration, finance and human resources. Rozy believes that one has to keep upgrading their skills to remain successful in a dynamic business environment. She holds a Bachelor of Education (Honours) degree from Kenyatta University, an MBA from Strathmore University and a Doctorate of Business Administration from the United States International University of Africa. She is honored to be in the driving seat and managing Dormans Coffee Limited, the roasting arm of the Dormans Group. She also holds other Directorships in the East African region, and is an inspiration to many women. Rozy believes in doing things superbly well. She says excellence is appreciated, but often even expected at Dormans. She adds that Jeremy Block, who is the Chairman of the Dormans Group, and who has been her mentor for many years has helped realize her potential. “I feel extremely confident and competent to run the company after decades of experience under his wing. Mentors have been very important for me in my journey.” Rozy is a registered trainer for the Rhetoric Module of the Female Future Program (FFK), a program which was designed to help women in senior managerial positions develop and hone their skills and competencies to grow into Board positions. She played a pivotal role in customizing the content of the
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program to the local context when it was introduced to Kenya by the Norwegian Enterprise Confederation to Kenya. She is passionate about developing leaders and has been an ardent member of Toastmasters International since 2005. This is a global organization devoted to empowering individuals to become better communicators and leaders. She was the first member in East Africa to obtain distinction as a Distinguished Toastmaster, the highest recognition awarded to a member by Toastmasters International. She has held several leadership positions, mentored members and clubs, and was the founding leader of the Territorial Council of East Africa. Rozy says that she is very fortunate to have a fantastic and passionate team. “This makes my work easy. People take ownership. Everybody collaborates in problem solving, recommending solutions, suggesting innovations and making decisions. We have diversity and huge talent amongst us, and as a result, ideas are constantly flowing.” But she advises that it is important to work hard, question every norm and be life-long-learners, be a sponge and keep learning more and more each day. “I guess that’s why I went back to school at this time in my life. I just completed my Doctorate in Business Administration and that too has given me many ideas on leadership and on driving innovation. I appreciate even more the value of forging strong relationships with my teams and empowering them to accomplish their personal goals first, and then contribute to the successful completion of group objectives. The team is motivated – must be the coffee!” FOODBUSINESSAFRICA.COM
Dairy
BUSINESS
TRENDS IN FORMULATING, PROCESSING, PACKAGING & CONSUMPTION OF DAIRY PRODUCTS
Probiotics finding increased application in the dairy industry and more
T
he use of live microorganisms in production of various food and beverages is an art that has been around for centuries. However, it is until the early 20th century, through the works of Russian microbiologists and zoologist, Élie Metchnikoff, when the notion that the ingestion of certain live microorganisms can benefit digestion as well as the immune functions of humans emerged, catalysing the emergence of various niche markets in the food industry including today’s US$48.4 billion global probiotics market. Defined by the World Health Organization (WHO) as “live microorganisms which, when administered in sufficient amounts, confer a health benefit on the host,” probiotics have been known to play a significant role in preventive healthcare as they prevent the occurrence of diseases by strengthening the immune system. The word “probiotic” comes from Greek and means “for life”. Probiotics are live microorganisms that facilitate digestive functioning in the human body and have been incorporated in several foods and beverages to aid in treatment of certain conditions such as the irritable bowel syndrome, inflammatory bowel disease and diarrhea caused by antibiotics. In today’s food ecosystem, probiotics are found in food and beverages such as yoghurts, cheeses as well as kumbocha drinks, pickles, fermented tea and juices. Clinical trials have also revealed that they may cure specific diseases or disorders in humans, especially those related to the gastrointestinal tract. Health concerns among consumers coupled with increasing application of probiotics in the food and beverage industry is constantly pushing the probiotics FOODBUSINESSAFRICA.COM
markets in new unchartered territories. The scientific validation concerning the usage of various products in improving gut health has cultivated new categories in the food and beverage industry. In addition, the inclination towards a natural, safe, and cost-effective substitute for drugs has also led to the application of probiotics as pharmaceutical agents. Probiotics are broadly classified as yeast-based or bacteria-based. Bacteria-based probiotics include; Lactobacilli such as Lactobacillus acidophilus, Lactobacillus ahamnosus, Lactobacillus casei and Lactobacillus reuteri; Streptococcus thermophilus; Bifidobacterim; Escherichia spp; Enterococcus among others. Yeast-based probiotics include Saccharomyces boulardi and Cerevisiae spp. Various biological activities associated with yeastbased and bacteria-based probiotics ingredients make them supreme for use in a variety of applications in the food sector. Notwithstanding their contribution to fermented foods concerning flavor innovation, yeast-based ingredients aid to enhance the health and productivity. Saccharomyces Boulardii is the most broadly used yeast type in the industry owing to its restorative property to help withstand harsh bile and pancreatic juices and other stomach acids. Generally, fermented foods, particularly dairy foods, are commonly used as probiotic carriers. Probiotic foods are currently primarily found in fermented milk drinks and yogurt, both of which have limited shelf life compared to cheeses. Fermented beverages provide an important contribution to the human diet in many countries because fermentation is an inexpensive technology, which preserves food, improves its nutritional value and enhances its sensory properties. However, the increasing demand for new probiotic products has encouraged the development of other matrices to deliver probiotics, such as ice cream, infant milk power and fruit juice. Market performance and outlook Functional food and beverages that contain probiotics have gained popularity as they contain biologically active ingredients that have more metabolic, health and nutritional benefits. Furthermore, there is an increasing demand for non-dairy probiotics products among consumers as they have low lactose and MAY/JUNE 2020 | FOOD BUSINESS AFRICA
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DAIRY TRENDS | PROBIOTICS cholesterol contents. According to research company Innova, probiotics are well established around the World, with 92% of consumers in the US having at least heard of them and 60% say that they are familiar with them. In terms of product type, probiotic beverages emerged as the largest segment in 2018 with revenue of US$39.56 billion, according to a report by Grand View Research. Cereal-based fermented beverages with probiotic content are being consumed extensively across the globe, thereby favoring the growth of the segment. On a global perspective, the Asia Pacific region currently is the leading consumer of probiotic products. The market is foreseen to be the fastestgrowing market with CAGR 7.6% during by 2025, due to the increasing disposable income and the boom in demand for dietary supplements, along with the burgeoning technology base, spanning to the increased demand for probiotics in the region. According to the report, the Indian market grew by 6% in 2018. There has also been rapid commercial growth in countries such as Brazil, Argentina, China and Japan. This, in turn, is spurring the demand for probiotics-based food, making Asia Pacific the fastest-growing market globally, which is showing profitable opportunities for the companies. Government and international regulations Government regulations differ among countries. However, the status of probiotics as a component in food is currently not established on an international basis. For the most part, these come under food and dietary supplements because most are delivered by mouth as foods. These are differentiated from drugs in several ways, especially for claims. As a regulation, probiotic foods and dietary supplements can only make general health claims, compared to medications; which are allowed to claim effectiveness in the mitigation, treatment, or cure of a disease. Colony forming units (CFU) is currently the most widely recognized measure of live microbial used by FDA and foreign governmental organizations. However, to be labeled as a probiotics, scientific evidence for the health benefit have to be documented by a manufacturer to regulatory authorities such as the Food and Drug Administration (FDA) or European Commission. Additionally, probiotics strains and products are developed and produced as per the international food regulations such as Food and Agriculture Organization of the United Nations (FAO) and WHO. Sector garnering investments Notable players in the global probiotics market are continually investing in this market riding on the growing evidence of well-being benefits affiliated with probiotics in human health. 52 MAY/JUNE 2020 | FOOD BUSINESS AFRICA
IN NUMBERS
92%
PERCENT OF US CONSUMERS WHO HAVE AT LEAST HEARD OF PROBIOTICS; 60% SAY THEY ARE FAMILIAR WITH THE TERM In July 2019, DuPont Nutrition & Biosiences opened a world-class fermentation unit to expand its capacity as part of a US$100 million investment to enhance delivery of essential health innovations. In September 2019, it unveiled plans of entering into a strategic collaboration with BY-Health, a leading consumer health company in China that would focus on research and development of probiotics supplements with new functions, ingredients and new technologies. The company aims to increase production of probiotics by 70% and targets the growing uptake of probiotics products especially in North America and Asia Pacific. In mid 2018, ADM acquired UK provider of probiotics supplements, Probiotics International Limited to expand its capabilities in the health and wellness industry, as leading giants add more capacility through acquisition of smaller, nimble and creative young companies. General Mills has also invested in US probiotics firm GoodBelly to fuel the company’s continued growth of probiotic food and beverages. Rising food manufacturing and technologically advanced spending on infrastructure as well as R&D investments through emerging nation is further expected to impact the demand of probiotics emphatically and open new marts avenues. According to a market projection by Reportlinker, the global probiotics market s expected to reach over US$69 billion by 2024. Like any other industry the multibillion-dollar sector is experiencing major challenges hindering advancement in the industry. These have been associated with insufficient investments in R&D activities and investments in research equipment, laboratories, and the high cost of hiring trained professionals. A recent report by research and analysis firm, Report and Data, further highlights that applications are correlated with health benefits, which makes it challenging for industry players to get a satisfactory return on investments on high initial investments due to the high intensity of competition from pharmaceutical, biotechnological and food and beverage industries to establish their foot print in the market. FOODBUSINESSAFRICA.COM
Beverage TECH TRENDS IN FORMULATING, PROCESSING, PACKAGING & CONSUMPTION OF BEVERAGE PRODUCTS
PepsiCo to invest US$400 million in Journey for Racial Equality Ramon Laguarta
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s people around the world demand justice for George Floyd, Ahmaud Arbery, Breonna Taylor, Rayshard Brooks and far too many others, we have been thinking hard about how PepsiCo can help dismantle the systemic racial barriers that for generations have blocked social and economic progress for Black people in this country. We know that the first step toward change is to speak up, so I want to be very clear: Black Lives Matter, to our company and to me. Even though I wasn’t born in the United States, I am passionate about this issue. Growing up in Spain, my parents raised me to believe that all people are equal, that diversity is a reflection of our common humanity. This is true both in companies and the larger society. Yet despite my parents’ optimistic view, we know that all people are not treated equally and that the problem of systemic racism is very real. The struggle for equality exists in many forms around the world, from religious freedom, to gender equality, indigenous people’s rights, LGBTQ+ rights, Latino rights in the U.S., and other racial and ethnic discrimination. After living in Georgia and Connecticut for several years, I have come to better understand the urgent need for racial and social justice in this nation, and I am committed to using my position as CEO to lead this change. A letter I received recently from a long-time PepsiCo associate expressed some of the pain many FOODBUSINESSAFRICA.COM
of our colleagues feel. She spoke of Black Americans’ struggle with everything from sub-standard housing, to racial profiling, to under-funded education. She was disappointed in some of PepsiCo’s past decisions and called us to action, saying: “PepsiCo at this time has an opportunity to look at our African American employees and community with wide open eyes and heart, and to work hand-in-hand to address the plagues many of us all too often face each day.” I couldn’t agree more. During the past few weeks, the senior leadership team and I have been doing a lot more listening than talking. I met with several different groups of Black community leaders, as well as MOSAIC, our Black employee resource group. These conversations were humbling and enlightening. I came away from them more conscious of the insidious nature of systemic racism and even more committed to using PepsiCo’s resources for good. The journey for racial equality has long been part of our company’s DNA, going back to our first Black sales team in 1947 and the legacy of Harvey Russell. We’ve also been long-time contributors to the NAACP Legal Defense Fund and will continue to support their work for social justice. But the recent protests in all 50 states and around the world have called on us to honestly assess our efforts. Whilst there are areas we have made progress in the fight against systemic racism and inequality—including pay equity and the diversity of our frontline workforce—we know we cannot keep pointing to what we did decades ago. The promise of our journey remains unfulfilled. We have much work to do going forward, and to echo Dr. Martin Luther King, Jr., “The time is always right to do what is right.” Investment in three key areas So today, I am announcing the next step in PepsiCo’s journey for racial equality: a more than US$400 million set of initiatives over five years to lift up Black communities and increase Black representation at PepsiCo. These initiatives comprise a holistic effort for PepsiCo to walk the talk of a leading corporation and help address the need for systemic change. Our journey will now focus on three pillars— People, Business, and Communities. When it comes to People, we are focusing on MAY/JUNE 2020 | FOOD BUSINESS AFRICA
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BEVERAGE | OPINION increasing representation; recruitment; and education, internships and apprenticeships. That means dramatically rethinking our approach to talent, starting by: • Expanding our Black managerial population by 30% by 2025 through internal development and recruitment—we will add more than 250 Black associates to managerial roles by 2025, including adding a minimum of 100 Black associates to our executive ranks. Whilst 14% of our U.S. workforce is Black, we know we need to increase representation in leadership. • Accelerating our recruitment efforts with Historically Black Colleges and Universities and increasing partnerships with diverse organizations at our core schools. • Establishing scholarship support for students transitioning from 2-year to 4-year programs and scaling our existing efforts to support trade/ certificate and academic 2-year degrees education through community colleges for 400 Black students per year—these funds will also provide wrap-around support, including money for books, transportation, housing, and more.
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AMOUNT OF MONEY PEPSICO IS INVESTING IN BLACK-OWNED BUSINESSES IN FIVE YEARS • Activating associates to help drive ongoing change in our organization, with a focus on internal mentoring, coaching, and continuous development—we know that many of you want to get involved, and we will need your support to see our journey through. • Mandating company-wide unconscious bias training, followed by continued training aimed at reducing biases in the workplace; including PDR objectives on representation; and requiring diversity on executive candidate slates—we’ll also expand our programs dedicated to supporting Black talent throughout critical career stages. When it comes to Business, we will leverage our scale and influence across our suppliers, marketing agency partners and customer base to increase representation and strengthen Black-owned businesses. That means step changes in our spending and approach to partnerships, starting by: • More than doubling our spending with Black-owned suppliers; expanding the supplier pipeline through advocacy and outreach; and building supplier capability targeting growth across services, 54 MAY/JUNE 2020 | FOOD BUSINESS AFRICA
agriculture, sustainable packaging, and operations. • Using our buying power to create more jobs for Black creators at our marketing agencies and making them part of our content development—we will implement a Creative Agency Diversity Policy modeled on our existing policy for the selection of legal services, including an annual audit. • Investing US$50 million over five years to strengthen local Black-owned businesses. • When it comes to our Communities, we’re working to drive long-term change by addressing systemic barriers to economic opportunity, investing an incremental US$20 million over five years. That means broadly increasing our efforts to create opportunity and advance economic empowerment for Black Americans, starting by: • Accelerating our support for social programs that impact Black communities, including delivering US$6.5 million in community impact grants to address systemic issues; investing US$1 million to replicate our holistic community support program, Southern Dallas Thrives, in Chicago; expanding our Food for Good initiative providing jobs and access to nutrition to more Black communities; and increasing our contribution to the NAACP Legal Defense Fund to support the struggle for social justice. • Supporting Black-owned restaurants as part of our Small Businesses Program, including mentoring, management training and help obtaining financing. • Investing $5 million to launch a Community Leader Fellowship program for Black non-profit CEOs. We will provide grants to participants’ organizations, executive education, and connections to PepsiCo leaders and partners. The bottom line is: this moment calls for big, structural changes, and we’re committed to being agents of that progress. As we continue our journey, we are going to keep listening—to leaders, communities and all of our associates—and we will work to do the right thing. We are committed to this work because we know the American society has placed the burden disproportionately on Black people. Injustice and inequality are problems for us all, and we all must do our part to defeat them. These efforts will also inform and positively impact our broader diversity efforts beyond our Black associates, as we look to be an actor in addressing other types of inequality going forward. Thank you to everyone who has voiced their opinion fearlessly to advance this important conversation. I hear you loud and clear and, as CEO, I aspire to ensure that all associates are proud to work at PepsiCo. We still have ways to go, but our journey is gathering speed. Together, I am confident we can work to build a stronger, better company that actively supports racial equality, more fully serves our communities, and lives up to our highest ideals. FBA Ramon Laguarta is the Chairman & Chief Executive Officer at PepsiCo. FOODBUSINESSAFRICA.COM
C E R E A L S | P U L S E S | T U B E R S | O I L S E E D S | C O F F E E | M I L L I N G | PA S TA | B A K I N G | S N A C K S | F E E D S
Grains Industry in Zambia - Great potential meets increased investments across the value chain
African Milling's new storage silos in Lusaka, Zambia
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he Southern African country of Zambia’s huge agriculture potential has been discussed for decades. Rich and fertile agricultural land that has been idle since times immemorial, vast quantities of water resources (40% of the southern Africa region) and low population in comparison to the land size have been key points of discussion, whenever Zambia’s unmet potential comes up for debate within the country and the region. Add to the mix the country’s perfect location between the higher population and richer economic eastern and southern Africa countries such as Kenya, South Africa and the Democratic Republic of Congo, and you have a potent mix of advantages and opportunities that the country could tap into to move its agricultural potential to a new level. Over the last decade, Zambia has increasingly seen its agricultural production and investments in FOODBUSINESSAFRICA.COM
the food and agro value chain increase substantially, with analysts foreseeing better prospects for the country in one sector where the country stands to be a key stakeholder in the region for a long time to come – the grains sector. Maize production and consumption grows According to Zambia’s Agriculture Minister Michael Katambo, a bumper crop of maize is forecasted in the current 2019/2020 agricultural season, with over 3.4 million metric tonnes (MT), a significant 69% increase over the past season’s 2 million MT, that was marred with drought and disease outbreak that hit the country and the Southern African region. According to statistics from the US Department of Agriculture, from 1990 to 2008, Zambia’s maize production stagnated at about 1.2 million MT per year, registering nearly two decades of loss in the MAY/JUNE 2020 | FOOD BUSINESS AFRICA
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COUNTRY FOCUS | ZAMBIA race to the country’s quest to become one of Africa’s largest maize producers. However, the country registered the first significant turn of events in 2009, when it harvested 1.9 million MT, after which it had another jump to 2.8 million MT in 2010. The country did not look back, recording 3.35 million MT in 2014 before recording its best ever crop of 3.6 million MT in 2017. The devastating drought of 2017-19 slammed the brakes on Zambia’s ascent in maize production, when the harvest came down to the lowest figures in a decade of 2 million MT. Local consumption of maize in Zambia has been rising in tandem with that of local production, from a low of 1.2 million MT in 2008, doubling to 2.5 million MT in 2014, before easing a bit to 2.1 million MT in 2019. Another growing utilization area is that of maize used in formulating animal feed, that has risen from a low of 50,000 MT in 2018 to a high of 500,000 metric MT per year between 2011-16. Recent drought conditions and a fall in maize production constrained the sector during the 2017-19 period, when the quantity of maize used by the sector fell to a low of 370,000 metric MT in 2019. Zambia’s increasing domestic production has enabled the country to become a significant player in the regional maize sourcing market, with the Democratic Republic of Congo (DRC) and Zimbabwe especially gaining from importing significant quantities of maize and milled maize meal from Zambia in recent years. Further afield, Kenya and other Eastern African countries have over the last five years began to source maize from Zambia during lean times, to fulfill gaps created by below-par maize production in their countries. As the 2019-20 season comes to an end and harvests come in, the Ministry projects that 3.4 million metric tonnes of maize will be realized, with 1.6 million MT being used for human consumption, 1 million MT bought by strategic grains reserve agency and 409,000 MT will be availed for industrial requirements, including for animal feed production. The Ministry reveals that the country is expected to have a surplus of 210,000 MT, which will be available for export into the regional markets. Wheat and other crops become important Zambia’s wheat production has almost followed the trajectory of its maize production, accelerating from 2008, when the country harvested 113,000 tonnes, which eventually hit its all time high of 274,000 tonnes in 2013, before sliding to 152,000 tonnes in 2019. The FAO GIEWS report projects that in 201920 season, wheat production will rise nearly 12% to 170,000 tonnes – a significantly lower increase than that of maize, due to the power outages that the country experienced this year, exacerbated by the long drought that depleted water reservoirs, 56 MAY/JUNE 2020 | FOOD BUSINESS AFRICA
Yalelo's cage fish farm in Lake Kariba | Photo credit: Steven Cole/WorldFish
and in turn, electricity generation in the country. According to Andrew Chinsala, the President of the Millers Association of Zambia, the country’s milling industry association, wheat remains a crop grown by large commercial farmers in the country who require access to power to run their irrigation and other farm systems. Zambia’s wheat consumption figures have stagnated at about 250,000 metric tonnes for the last decade, mainly due to high wheat flour prices in contrast to a substantially low consumer incomes that have depressed adoption of wheat based products including bread, that are substituted with locally available grains such as maize, tubers and other food products. Despite a stagnation in wheat consumption, the country relies on the expensive imports of wheat grain, which this year are projected to hit 100,000 tonnes by MAZ, to fill the gap that continues to grow between local production and the consumed quantities. Another crop that has received a boost in Zambia is soya beans, as the country’s demand for animal feed, high protein meals and cooking oil rises in tandem with population growth, where the country has become a significant regional player. According to the USDA, Zambia’s soya bean FOODBUSINESSAFRICA.COM
ZAMBIA HAS EXPERIENCED A SIGNIFICANT GROWTH IN ITS DEMAND FOR PROTEIN, WHERE FISH USED TO MAKE UP ABOUT 55% OF THE ANIMAL PROTEIN CONSUMPTION, FOLLOWED BY CHICKEN, BUT WHERE CHICKEN NOW REIGNS SUPREME AS DEMAND CONTINUES TO RISE IN THE COUNTRY.
Ministry of Agriculture and the Ministry of Livestock and Fisheries not to allow exports at this stage. If we start exporting early, we may have a shortage and the prices of stock feed will be hiked, thereby negatively affecting the small-scale poultry farmers who are growing chickens and this might affect the consumers,” Chanda said.
production has risen from a paltry 57,000 MT to 351,000 MT in 2017, before dipping to 281,000 MT in 2019. The country expects to see a small increase in its soya bean crop, with a 6% rise in production to 297,860 MT in the 2019-20 season, while sunflower will record a 4.7% increase – as the country grapples with increases in cooking oil prices locally as a result of the Covid-19 pandemic. The country, even as it struggles to meet its local demand for soya bean seeds and soya cake, a critical input into animal feed industry, has also become a significant exporter of the two commodities into the regional market, including into Zimbabwe, DRC, Botswana, South Africa and other countries. However, the Poultry Association of Zambia (PAZ) Executive Manager, Mr. Dominic Chanda has called on Government to trade cautiously when exporting maize and soya beans this season to enable local soya bean crushers and animal feed makers to utilize the crop – and only export value added products. The Millers Association, especially following the uncertainty brought by the Covid-19 pandemic, has raised the same call. “We need to secure the maize and soya beans we have produced and minimize exports to avoid the situation we faced last year. I am appealing to the FOODBUSINESSAFRICA.COM
Protein demand boosts investments Zambia has experienced a significant growth in its demand for protein, where fish used to make up about 55% of the animal protein consumption, followed by chicken, but where chicken now reigns supreme as demand continues to rise in the country. According to the World Atlas, Zambia has experienced impressive growth in poultry meat consumption over the years, with production of poultry meat increasing from 13,984 tonnes in 1984 to 49,487 tonnes in 2018, growing at an average annual rate of 4%. Annual chicken production has increased from 13 million to 43 million in 2018, reported the Poultry Association of Zambia, and as a consequence, the poultry industry now makes up 42% of the livestock agriculture, making it the largest livestock industry in the country, paced by the rise in prices of beef and other protein products in the country. The Association’s Executive Manager Dominic Chanda had in 2016 estimated that the chicken sector was set to grow to more than 80 million birds by 2020 (from 68 day-old chicks and 150 million eggs produced in 2016) due to the number of new entrants into the sector, but two seasons of severe drought across southern Africa and outbreaks of disease including bird flu, could have dented the sector’s hopes significantly. The rise in poultry demand and production has seen a huge surge of investments in the poultry value chain in the last 15 years, including in hatcheries including Hybrid Poultry, Zamhatch, Tiger Chicks, Ross Breeders, Quantum Foods, Panda Hatcheries and Chipata Hatcheries; and poultry processors such as Zamchick, Verino, Crest chicken, Southern Chicken, Supreme Chickens and Copperbelt Chicken, among others. Investments in grain sector rise The growth in production of grains and oilseeds like soya beans and sunflower in Zambia has attracted significant investments by local, regional and MAY/JUNE 2020 | FOOD BUSINESS AFRICA
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COUNTRY FOCUS | ZAMBIA international players into its milling and baking; meat, poultry and fish; and animal feed manufacturing sectors – changing the landscape of the country in a short span of time. According to MAZ, Zambia has a total number of 78 grain milling operations: 20 large scale, 27 medium scale and 31 small scale millers located in the four provinces of Lusaka, Copperbelt, Northern Province and Central Province, processing mainly maize into local favourite mealie meal, a local delicacy. A few players in the sector mill wheat and crush soya beans. The National Milling Corporation, an affiliate of American agribusiness and transport conglomerate, Seaboard Corporation commissioned a new US$37.5 million milling plant in 2019 in Lusaka, Zambia, with a capacity to mill 600 metric tonnes of wheat per day, replacing its ageing mill in the City. It plans to start maize milling at the new plant in 2020. African Milling Limited, one of Zambia’s major integrated wheat and maize flour milling operations also commissioned its newly installed maize mill with a capacity of 336 MT per day plus 50,000 MT storage capacity in 2019,
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VALUE OF A NEW WHEAT AND MAIZE PLANT BY NATIONAL MILLING CORP. INSTALLED IN 2019 IN LUSAKA increasing the miller’s capacity from the previous 168 MT per day, which was commissioned in 2006. It also operates a 120 MT per day wheat mill plant since 2010. Another significant player in the milling sector is Pembe Zambia, which operates a wheat flour, maize meal and soya bean crushing plant in Lusaka. Zambia’s leading agribusiness enterprise, Zambeef is another key player in the grains sector. Novatek, its animal feed division, opened a US$10 million modern plant in 2017 located at Mpongwe, in the northern part of the country, mainly to serve its vast demand from its poultry, dairy and feedlot operations dotted across the country. Mount Meru Millers Zambia is another grains sector giant in Zambia, with a versatile plant that processes soya beans, sunflower and cotton seed with a 250 MT per day refinery plus an expeller with a capacity of 250 MT per day installed in 2018. Global Industries Limited (GIL) has also joined the investment craze in Zambia’s soya bean value chain, investing US$20 million to expand its processing plant in 2018 to double its edible oil production capacity to 100,000 tonnes a day, on top of the US$14 million investment it had made in 2016 in its plant. 58 MAY/JUNE 2020 | FOOD BUSINESS AFRICA
Other investors in the animal feed sector in Zambia, apart from National Milling and Novatek include Pembe Milling, Tiger Animal Feeds, Nutrifeeds, Simba Milling, Olympic Milling among others. Aquaculture shines From being a country that had failed to tap into its vast water resources to venture into the lucrative aquaculture sector for many decades despite huge local demand, Zambia has become a significant regional player in the sector in southern Africa region, joining the Continent’s leading producer Egypt, Nigeria, Ghana, Uganda and Kenya. According to a report by CGIAR, by 2014, aquaculture in Zambia grew to a total output of 20,000 tonnes, with 75% of production coming from the commercial sector: intensive pond-based rearing units and cage culture. Zambia is the biggest producer of tilapia in the South African Development Community (SADC), and some of the largest freshwater commercial farms in Africa operate in Zambia, according to FAO. The value chain is made up almost entirely of tilapia, and in recent times, there have been large investments made into the seed and feed sectors. Aimed at enhancing the aquaculture feed sector, Danish fish feed manufacturer Aller Aqua in 2017 opened a new factory worth US$10 million as part of the company’s plan to invest in the aquaculture industry sector in Zambia. The factory, with a capacity of 50,000 tonnes per annum of feed, was established as a joint venture with Oakfield Holdings Limited where Aller Aqua has an off-take agreement with fish company Yalelo Limited, the leading producers of tilapia the country. The plant was Aller Aqua Group’s second plant in Africa, after an earlier one in Egypt. The sector has witnessed further funding in recent years, with Yalelo becoming a darling of investors who are pulled in by the firm’s aggressive growth, and increasingly, regional ambitions into Eastern Africa, where it says it can find better growth prospects and margins. In 2019, the firm secured a US$10.5 million funding from Dutch development bank FMO, which was soon followed by the investment of US$6 million equity investment by Finnfund, the Finnish development financier. The firm’s leader, Adam Taylor, said the funding will more than double its production capacity from 12,000 tonnes to 25,000 tonnes per year while also expanding its processing and retail footprint. But Yalelo is not alone. Other notable investors in the sector include Kafue Fisheries and Kariba Harvest; a subsidiary of Zimbabwe based Lake Harvest. The grains sector has grown its tentacles to touch the length and breadth of the economy in Zambia over the last decade or more. It will be interesting to see how the sector will impact the country and surrounding countries in the next decade to 2030. FOODBUSINESSAFRICA.COM
OMEGA 3s - Increasing consumer health awareness takes
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rogressive realization of multiple burdens and constraints challenging the creation of sustainable future has opened doors for new trends, and human nutrition and health has always been a strong argument for taking action. With increased complexities in our day-to-day life activities, emphases on human nutrition and health have become more evident than ever. Although human nutrition is definitely a multifaceted concept, some aspects in this dynamic consumer trend have drawn more attention than others.
must be consumed from plant and animal sources. For this reason, they are termed as essential fatty acids.
Where are they found? For human nutrition purposes, omega-3 is majorly sourced from marine source such as fish and fish products. Marine sources are currently the best and generally a safe source of omega-3. Anchovy is the leading source of omega-3 and constitutes around 70% of the market. Other sources of omega-3 include nuts, seeds, vegetable oils such as krill oil, algal oil, walnut, pumpkin seeds, soybean oil, canola oil, bean What is omega-3? curd. Simply defined, omega-3 is a fatty acid. This class Other than existing in natural sources, omega-3 of fatty acids exists in a polyunsaturated form and can also be found in fortified foods, infant formulas is needed conditionally by all humans. However, as well as dietary supplements. Dietary supplements unlike several other fatty acids, omega-3 cannot be are concentrated sources of nutrients or other synthesized in the human body at levels needed to substances with a nutritional or physiological effect, maintain optimal health or development and hence alone, in combination, or marketed in pharmaceutical FOODBUSINESSAFRICA.COM
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NUTRITION & HEALTH | OMEGA-3 between 500 mg and 1,000 mg of DHA and EPA per day, where at least 500 mg is DHA. Recent launches and research on infant and mother nutrition products for infant brain development have encouraged the evolutionary use of DHA in these products. The NIH advises that either directly as fish or supplements, including omega-3s in in the diet is healthful but before taking supplements you must talk to your health care provider. “It’s especially important to consult your (or your child’s) health care provider if you are pregnant or breastfeeding, if you take medicine that affects blood clotting, if you are allergic to seafood, or if you are considering giving a child an omega-3 supplement,” it adds. Various reports indicate that the dietary supplements segment in the omega-3 market accounts for the largest share, while infant formula is projected to be the fastest-growing segment by 2025. Among the three types of omega-3 fatty acids, the docosahexaenoic acid (DHA) segment in the market is projected to grow at a significant rate due to the increasing demand for infant formula. The marine segment is expected to be the larger dosage form and administered orally. and faster-growing segment by 2025. According to There are about 11 types of omega-3 fatty acids but the Global Organization for EPA and DHA Omega-3s only three are the most important: alpha-linolenic (GOED), anchovies and sardines are rich in omega-3 acid (ALA), docosahexaenoic acid (DHA) and eicosapentaenoic acid (EPA). Of the three, DHA has been cited as the most important omega-3 fatty acid.
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Increasing health awareness catalyzing growth Increasing consumer awareness about the health benefits of omega-3 has significantly contributed to the emergence of omega-3 as an independent niche market. In fact, a recent report by Markets and Markets valued the global omega-3 market at US$4.07 billion in 2019. Increasing demand of omega-3 products has been projected to more than double the market size by value within a span of five years to reach US$8.52 billion by 2025. Omega-3s have been associated with prevention of heart attacks and also help with other auto-immune diseases. According to the National Institutes of Health (NIH) in the US, there have been a number of registered benefits by consumers, including relieving symptoms of rheumatoid arthritis e.g. morning stiffness, less joint swelling and pain, and less need for anti-inflammatory drugs to control their symptoms; and brain and eye function. Evidence indicates that optimal omega-3 DHA intake plays an essential role in life-long health and development, particularly in infancy during the first 1,000 days – between the onset of a woman’s pregnancy and her child’s second birthday. A Cochrane review of omega-3 long-chain polyunsaturated fatty acids (LC-PUFAs) recommendations shows that DHA and EPA lowered the risk of having a preterm baby by 11%, and an early preterm baby by 42%. Effective daily intake levels have been pegged at 60 MAY/JUNE 2020 | FOOD BUSINESS AFRICA
US$4B
VALUE OF THE GLOBAL OMEGA-3 MARKET, WITH THE DEMAND SET TO MORE THAN DOUBLE TO US$8.25 BILLION BY 2025 fatty acids and led the market in 2014 with a share of 80%, followed by tuna and cod, accounting for a share of 10%. Asia Pacific region has long been known as the leading and fastest-growing market in omega-3 consumption. Factors driving the Asia Pacific market include the advancements in food technology and the high demand for fortified food products. Additionally, Europe has been cited as the second most attractive market for new entrants in the omega-3 industry. Demand and awareness about this vital ingredient is also rising in developing countries, including Africa. Emerging markets for Omega-3s Omega-3 products are increasingly finding applications in new products such as cereals, bakery products, and juices. Omega-3 in pet nutrition is also emerging due to its therapeutic ability to improve immunity and prevent degenerative conditions such FOODBUSINESSAFRICA.COM
as arthritis and inflammatory bowel disease in cats and dogs. Omega-3 is used to fortify animal feeds, treats, and supplements and can be fed to fish and production animals, thereby enriching the meat, eggs, and milk they produce. Manufacturers are investing in products such as treats and supplements or pets. Flaxseed is an omega-3-rich source used as a nutrient in animal feed. The pet food industry is expected to grow in the future as pet owners continue to demand health & wellness products for their pets. Source of omega-3 important According to a leading producer of omega-3 ingredients BASF, it is important to make decisions based on the best available science concerning the sourcing of these ingredients. The company advices that when choosing a source of omega-3, it should contain DHA and EPA and it should come from a high quality, trusted source supplier. BASF also advises that the product should have as high a level of DHA and EPA as possible. For dietary supplements, BASF says it produces very high concentrates of DHA and EPA using a special process to reduce saturated fat to less than 1% in the finished product, compared to standard natural fish oil, which comprises nearly 30% saturated fat, which leads to better quality fish oils with less unwanted fats, better taste and ease of consumption by consumers.
AFRICA SWEETS,Snacks
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Regulations and emerging concerns Many European countries have adopted highly restrictive standards for dietary supplements that eliminate the ability of consumers to purchase dietary supplements in therapeutic dosages. A new regulation in Europe (Regulation 767/2009 of the European Parliament and the Council on the market placement and use of feed) requires substantial evidence that an ingredient imparts health benefits as it claims. Omega-3 is one such ingredient with significant benefits. Therefore, there is an increase in the incorporation of omega-3 in human and pet food around the World. However, the market for omega-3 in the form of dietary supplements and fortified foods and beverages is facing a significant restraint in the form of absence of official recommended doses in many countries. Despite extensive scientific research conducted by governments and non-government organizations, a specific standard dose of omega-3 for daily intake is not clear. Analysts have blamed this to negatively impact the growth of the market due to increasing confusion among consumers. Non-standard doses result in improper dosage, leading to very few or no health benefits. The situation is more critical in developing countries where consumer awareness is low, and they do not have a robust primary healthcare infrastructure. FOODBUSINESSAFRICA.COM
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Preventing a COVID-19 food crisis – the role and opportunity for multinationals By Lawrence Haddad and Diane Holdorf
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s COVID-19 continues to impact millions of lives and jobs around the world, it is also making our global food system increasingly vulnerable. The poverty, malnutrition and food insecurity that were already challenges before the pandemic – with 820 million people chronically hungry in 2018 – are set to grow as a result of it. As the world begins to design recovery packages and policies and commit billions of dollars to guide our recovery from COVID-19, it is critical that we do not ignore an impending food crisis. Policymakers, civil society and business need to act now to increase the resilience of vital supply chains – such as food, agriculture and health sectors – to prevent future shocks and secure a healthy future for all. Many multinational companies (MNCs), with their ability to adapt and respond quickly as well as their fundamental interest in maintaining a healthy workforce and robust consumer base, are stepping up – showing determination and creativity in keeping food value chains moving from farm to consumer despite the lockdowns. By donating emergency funds and supplies to communities in need, guaranteeing salaries and work contracts to employees and providing advanced 62 MAY/JUNE 2020 | FOOD BUSINESS AFRICA
financing to small suppliers and retail customers, some large companies are already making a difference. Here, we propose, they all have an even larger role to play. While MNCs provide the majority of food for higher income regions, such as Europe and North America, their market share in middle- and lowincome countries in parts of Asia, Africa and Latin America is significantly smaller. With most of their employees and consumers also in wealthy countries, there is an obvious pull for MNCs to prioritize these higher income markets in their own COVID-19 response efforts. However, it is vital for MNCs to look beyond their largest markets to support, a) workers employed by contractors and partners in their food value chains, and b) the small and medium enterprises (SMEs) that provide the majority of food in the middle- and lowincome contexts. Stepping up in this way will have long term benefits for MNCs, which come down to trust and reputation, and future business opportunity and preparedness. What and why do more? First, SMEs are essential food system actors in middleand low-income markets, providing the majority of FOODBUSINESSAFRICA.COM
OPINION PEOPLE WANT BRANDS TO DO EVERYTHING THEY CAN TO PROTECT THE WELL-BEING AND FINANCIAL SECURITY OF THEIR EMPLOYEES AND SUPPLIERS, EVEN IF IT MEANS SUBSTANTIAL FINANCIAL LOSSES UNTIL THE PANDEMIC ENDS - EDELMAN TRUST BAROMETER’S SPECIAL REPORT
food to people with the fewest resources. They play a critical role in maintaining food security, linking up farmers with smallscale processers, distributors and retailers. Many SMEs lack the know-how or capacity to access available government assistance even where this exists. MNCs can support SMEs through training programs and business-to-business advice, building trust within the broader ecosystem, including their own relationship with government partners. They can also support the ecosystem by sharing capacity to help SMEs stay afloat. For example, setting up systems to share haulage capacity to get foods from farms to markets, supporting efforts to maintain high food safety standards, continuing partnerships to fortify staple foods, and providing new financing options to SMEs that are delivering nutritious foods to the most vulnerable people to survive the crisis. Second, MNCs will want to preserve their delivery capacity and infrastructure for when markets bounce back. By providing nutritious foods to workers across the value chain they ensure business preparedness and an efficient ramp up when demand returns to pre-pandemic levels. While all countries are affected by this crisis, MNCs can fill an important gap in lowincome contexts since they have a unique reach to the beginning of the supply chain. Laborers FOODBUSINESSAFRICA.COM
and other supply chain workers, who often fall through the cracks of public assistance programs, would benefit significantly from increased health and nutrition assistance at their workplace. This would ensure a healthier workforce during and after the pandemic, and build brand loyalty across the supply chain. With the crisis transforming public perceptions of food workers’ value – elevating it to that of doctors, nurses and caregivers – these employees recognize that they play a critical role in keeping food on the tables of families around the world. They want companies to take more responsibility to protect their health and wellbeing. Third, consumers in highand low-income settings will remember how major companies responded to the crisis. Reputation and consumer trust are paramount to generating business and maintaining a "license to operate" – people around the world are looking to MNCs to demonstrate leadership. The Edelman Trust Barometer’s Special Report on COVID-19 highlights the private sector’s essential role in the context of the pandemic. Moreover, Edelman’s report on trust in brands during the pandemic points shows there is "unanimity across markets (90% globally) that people want brands to do everything they can to protect the well-being and financial security of their employees and suppliers, even if it means substantial financial losses until the pandemic ends". Business remains a credible source of information among consumers, and in this context, "brands can build a new level of connection with consumers or lose the relationship forever". For example, 65% of respondents in the trust in brands report said that a brand’s response in the crisis will have a large impact on their likelihood of purchasing it in the
future. How a company responds in low-income compared to high-income contexts is just as important, if not more so due to increased vulnerability – these actions are visible around the world. Just as positive actions will be remembered, so too will any actions that take advantage of the crisis. Promoting unhealthy foods or targeting vulnerable groups (we note that obesity is thought to be a key risk factor in the severity of COVID-19) is not part of the solution. Companies should offer the healthiest foods possible and market products responsibly. The economic recession from COVID-19 will disproportionately affect poor people, curtailing labor opportunities and income, and generating food insecurity that will be felt acutely by many. Without concerted effort by public- and private sector leaders, disparities between the World’s wealthiest and poorest will be further exacerbated by this crisis, slowing future economic growth globally. We need more MNCs to step up and responsibly mitigate the effects of the crisis in middle- and low-income countries. Investments today in the wellbeing of SMEs, workforces, and consumers will go a long way to protecting wider health and wellbeing and raising the standing of MNCs. The current crisis is an opportunity for MNCs to show their commitment to being a central part of the solution for sustainable and human development. They need to take it, for their own sake, and everyone else’s. FBA Lawrence Haddad is the Executive Director at GAIN and Diane Holdorf is the Managing Director, Food & Nature at the World Business Council for Sustainable Development
MAY/JUNE 2020 | FOOD BUSINESS AFRICA
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EXECUTIVE INTERVIEW
ANDREW CHINTALA –
PRESIDENT, MILLERS ASSOCIATION OF ZAMBIA The grains industry is undergoing great transformation. In this interview wide ranging Francis Juma spoke to Andrew Chintala, the President of the Millers Association of Zambia, who shares with us the state of the grain industry, as the country reported a bumper maize crop for the 2019/20 season. (WFP) has been busy trying to source for maize and mealie meal, as well as for other countries in the continent. So it’s quite some exciting news, but obviously whatever it is that we are going to do in this season is what will determine the output in the next season. The farmers are really waiting to see what is going to happen, so we only hope that we go by the rules of the game and just to allow the market forces to be able to determine the price of the commodity so that we can create a level playing field for both millers and farmers in terms of the trading of the commodity.
Our website recently reported the good news that maize harvest is projected to rise more than 60% from last year’s figures. What is the feeling of the Millers Association and the milling industry in Zambia on this good news? Obviously this is something we are looking forward to considering that the last two consecutive seasons we have seen a decline in terms of maize production yields. We had gone down to 2.2-2.1 million metric tonnes and as a country we need 1.8-2.0 million metric tonnes of maize for both human and commercial use. So when you get a figure of 2 million or 2.1 million, it doesn’t inspire you because whatever the case you need to consider that there is also retention at household level, where if you remove that, what is available in terms of the tradable quantity is just way below what the country requires. We have been operating under very tight situations for the last 2 years. As millers we are quite excited and looking forward to see what we can do in terms of trading not only domestically but also to take export opportunities around ourselves such as with Democratic Republic of Congo (DRC). I know the World Food Program 64 MAY/JUNE 2020 | FOOD BUSINESS AFRICA
I know you have been having discussions with the Minister of Agriculture. What are some of the things you would want to see as the association this year with this bumper harvest? One of the things out of the crop forecast survey that the minister announced is that 93% of the total maize yields that the country reported has been contributed to the small scale or emerging farmers and only 7% is input from commercial farmers. So what we would like to see is that yes, it’s a good thing the government announced an increase in terms of the production yield from as low as 1.2 metric tonnes per hectare and we have now gone to 2.7 metric tonnes per hectare, which is a major improvement but we know that it is a known fact that if you went across to Malawi and Tanzania, the small scale farmers using the same inputs as our farmers are producing 4-5 metric tonnes per hectare. So we would like to see the same situation in Zambia because only then will we know that our small scale farmers would have moved from the 1.5 metric tonnes, which in most cases refered to as the poverty line (in terms of the data mined) in as far as the performance of our farmers. So we hope as millers that this time around we work together with the farmers and the traders in trying to manage the surplus crop that the country is poised to record, considering that we are expecting a bumper crop. For us millers, we support the government’s position in terms of value addition policy where we are encouraging exports of finished products such as maize meal, chicken feed, pig feed and other by products of maize. We would like to see that we add value to these commodities in Zambia and take advantage of export markets considering that would FOODBUSINESSAFRICA.COM
EXECUTIVE INTERVIEW
be returning the jobs locally and we would be able to import into the country the much needed foreign exchange. In this covid-19 situation, we definitely cannot afford to export the raw material and again maybe a few months down the line we start reimporting the finished products. We support the export of value added products as compared to the export of raw materials, so we are hoping that we will work together with Government and other key stakeholders in the food value chain to manage better the 2019-2020 crop that is currently available in the market. The government plays a critical role in setting maize prices in Zambia. What role would you like to see with the grain reserve agency this season? We need to first of all appreciate that the countries in this block have been advocating and pushing for the Africa free continental trade agreement (AfCFTA) to be signed so that we can open the borders or probably relax some of the conditions that we set amongst ourselves, which have made it very difficult for us to inter-trade in the region. I think that this is a positive move, because largely we have seen some of the countries in the SADC importing maize and maize products from as far as Mexico and Brazil for their own consumption, when we have countries like Zambia and South Africa would have taken advantage and traded into that market. Clearly government’s policy in whatever aspects that we are discussing is very key and we only hope that according to the statement from the Minister, we would have to be given a predictable policy guidelines so that we can plan and see how we can FOODBUSINESSAFRICA.COM
IN NUMBERS
2.7
AVERAGE YIELD OF MAIZE IN METRIC TONNES IN ZAMBIA, FROM A PREVIOUS LOW OF 1.2 MT - WHICH ARE BELOW GLOBAL AVERAGE manage ourselves during this marketing season going forward. We are very much aware that South Africa is expecting a very huge crop, which is about 15.8 million metric tonnes. If you look at that it is quite massive meaning South Africa will have a bigger role to play in terms of markets that surround us and beyond, considering that they are sitting on very competitive advantages compared to where Zambia is sitting in terms of trading with many other countries within SADC and beyond into EAC, Kenya, Tanzania, Sudan etc. We are therefore hoping the government will not over regulate this marketing season so that we can allow the market forces to come into play and be able to guide us going into the next marketing season. If you are a farmer you would be looking at what behaviors you will seeing in the current market arrangements, because it is what we are doing now that can inspire or demotivate a farmer on growing maize in the coming season. You would rather ask yourself a question on whether to still grow maize and if it still makes economic sense or do I find MAY/JUNE 2020 | FOOD BUSINESS AFRICA
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another crop which can be able to be traded without restrictions. All in all, we are committed to continue consulting and having positive dialogue with other players in the food value chain, government inclusive, because we may not need to be more focused on the current crop, but on how better can also stimulate growth of the maize industry to get to even 10 or 12 million tonnes that South Africa harvests. We have got the potential land, the farmers and everything it takes. We need to synergize our efforts and work together as united food chain players to stimulate and boost maize production in Zambia so that we can be able to trade freely. We need to start working on the logistics challenges that disadvantage Zambia when it comes to trading with Kenya, Sudan and other East African Community (EAC) block countries because this is something we should be capitalizing on.
IN NUMBERS
80%
PORTION OF CHINESE CONSUMERS WHO HAVE CHANGED THEIR CONSUMPTION & SHOPPING HABITS POST CORONA
The impact is huge and milling industry in Zambia is adversely affected. There’s also a reduction in mill utilization by millers, so mills are also running at about 50% because you cannot over produce, as the market will not be able to absorb. We have been affected adversely, but the good news is the country is food secure. We are expecting a fairly good crop to come into the market and we also have other We are right in the middle of the COVID-19 pandemic. foodstuffs and we are adequately prepared. As we see countries begin to open up, how has the pandemic impacted your industry in Zambia? Zambia is a unique market. You have hundreds of We do not know when this new virus will leave, our mills in Zambia, big and small. And new plants are President has encouraged the industries and the being set up. What is the status of investments & captains of the industries to embrace it and take it trends in the milling sector? as the new normal. We need to find ways of ensuring We have very good opportunities in welcoming new that industries do not sink to the point where they investments in the country. Just to put it in perspective, Zambia has a total will not be able to come back. installed crushing capacity of maize grain of 3.8 We have seen a sharp decline since the arrival of million metric tonnes per annum, if all the mills were covid-19 in Zambia in terms of maize and maize meal to run at full capacity. We do have around 500,000 plus metric tonnes installed crushing capacity of WE NEED TO START WORKING ON THE wheat flour. You can see that we still need more LOGISTICS CHALLENGES THAT DISADVANTAGE investment in the wheat sector. ZAMBIA WHEN IT COMES TO TRADING WITH Most of these mills are in Lusaka and the KENYA, SUDAN AND OTHER EAST AFRICAN Copperbelt regions, just 2 provinces out of the 10 that COMMUNITY (EAC) BLOCK COUNTRIES make up our country, so clearly our advocacy now is that any new investment coming into the scene we - ANDREW CHINSALA must roll out of Lusaka into other provinces because the market is saturated both for maize and wheat flour. The Northern circuit of the country is producing consumption. The rate of sales of the commodity a lot of maize to support the milling industry, so has dropped far below 70%, which has not been if your mill is in Lusaka you have to import the raw seen in over the last 15 years. We have observed material mill it and then push the flour again into the that consumers buying power has reduced, as some far-flung areas. I see great opportunity in new plants of them are not working and others are earning half now being closer to the source of raw material and salaries. We have also seen a reduction in patronage creating markets for farmers at their doorstep. or traffic going into shops and malls. The consumers are not out there buying the products. We are still trying to conduct a quick assessment in terms of what Zambia’s milling industry has vast opportunities has really impacted the sales of these commodities. for export to neighboring countries, which the We have looked at other foodstuff options that government feels should not be open for all and have been offloaded into the same market at this sundry. What is the importance of the export market period and we have noted that the farmers have this season? harvested maize, pumpkins, fresh groundnuts and This can maybe looked at on a case-to0case basis many other foodstuffs. But even in years when in terms of trade. Each year has its own challenges consumers have had alternative foodstuffs, we have depending on what we produce. In a good year, Zambia has enjoyed a good share not seen the kind of impact we have seen this period. of the export markets in DRC as compared to other 66 MAY/JUNE 2020 | FOOD BUSINESS AFRICA
FOODBUSINESSAFRICA.COM
EXECUTIVE INTERVIEW THE ARGUMENTS AGAINST LIFTING THE BAN MAKE SENSE. A LOT OF PEOPLE ARE UNEMPLOYED AND USE ALCOHOL AS A GETAWAY DRUG. BUT AN APPROACH THAT ALLOWS LIMITED SALES MAY SAVE THE INDUSTRY - APIWE NXUSANI-MAWELA - CHAIR, SOUTH AFRICA BEER ASSOCIATION
countries. Zambia is a non-GMO country, while South Africa is producing both GMO and non-GMO produce. DRC does not choose whether it’s GMO or non-GMO, all they need is if they can get food that can subsidize what they have. If you compare what we have with Tanzania or South Africa, we do not have a fairly big crop in terms of the volume of what is available as tradable surplus. Our government has indicated that they will buy 1 million metric tonnes of maize this season. Out of the 3.4 million metric tonnes we are expecting, 1 million will go into the government reserve, and we will only be left with 2.4 million metric tonnes. So we could be talking about around 200,000-500,000 metric tonnes in terms of tradable surplus that can be exported this season. The government is mindful in terms of what happens if Covid-19 does not end soon and whether the country will be able to produce enough grain in the next season, so government would still be able to regulate the market even in this bumper season. The government would not want a situation where we start importing maize again. It’s quite a tricky situation since we have quite a reasonable trade surplus that can be exported to bring the much-needed foreign exchange. Q. What is the expectation with other grains like wheat, soybeans, sunflowers etc, this season in terms of production? We expect to record a fairly good and positive increase in soya production this year. This is one industry that is currently doing very well in Zambia. We have about four investors who are crushing and adding value to the crop and we commend the investors. There is now no need to export soya beans and import cooking oil and soya cake. Other millers are diversifying and moving into higher value crops such as soya beans and wheat, which is a good move. Wheat is mostly grown at a commercial level. Zambia has been hit in the last one-year or so with load shedding supply of electricity and because of that commercial wheat production has been a serious challenge. We expect a reduction in terms of wheat production and currently as I speak to you we are importing wheat just to meet the short fall. We expect the new crop to start hitting the market come September-October 2020, so we needed to import about 100,000 metric tonnes of wheat just to FOODBUSINESSAFRICA.COM
push us through the shortage period. But the wheat sector has been doing well despite challenges of high cost of fuel and erratic supply of electricity. The country has recorded poor rainfall in the last three years so that has really affected us and put us in a very awkward position even I speak to you, we are still having load shedding but is not as bad as it was before. The milling industry has been hit; agriculture has been hit and in general the manufacturing industry. What about regional trade with Angola? Zambia has a very long border with Angola? Eight countries surround Zambia but where we have maximized our trading activities is DRC then Zimbabwe and Malawi. I traveled to Angola recently and I was amazed at the amount of money that Angola spends on food imports. They import maize meal and wheat flour from Brazil and Germany! Angola is just a stone throw away from where I am but there is no infrastructure to support the trade. Therefore, we are losing out in terms of huge dollars that Angola spends every year on food imports. Zambia has a lot that it can export to Angola. We have beef, maize meal etc. When I looked at the quality of the products they import maize meal and wheat flour from Brazil and Germany, our quality is better by far! We are hoping our government will start to open up and start working in collaboration with their counterparts in Angola to try and open up the trade to create the linkage, so that we are able to push commodities even from Malawi through to Zambia and then to Angola. I am looking forward to see an Africa that is ready to trade within itself on a sustainable basis. It really made me think and wonder and even now am still shocked that with all the millions that Angola spends on food imports not even 1% of that is being captured by Zambia and yet we are just next door. It is a good opportunity and market for Zambia, but the infrastructure does not allow us to be able to trade with Angola. We have looked at the potential routes and we went as far as Lobito town, we are saying if we can even open up through DRC, where we can even use the railway line. Angola as a market has ridiculously huge potential that can change the economic status of a miller like me and of the farmer in Zambia. One last point before we close? I would urge you to consider Angola as a next destination of your AFMASS conference and expo, as this will expose the immense opportunities in that country. We need to look at how we can harness and put our potential together as Africa to trade with each other. I am very grateful for this opportunity. You are doing a very commendable with your events. MAY/JUNE 2020 | FOOD BUSINESS AFRICA
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FOOD SAFETY
Essentials to Re-Opening Food Businesses post Covid-19 If your food business has been closed for any length of time, there are some checks and tasks that you should complete prior to re-opening: Food Safety Management System Make sure you know the food safety risks posed by your operation and how to control them. Check that your food safety management system is up to date and includes any changes you have made to your processes/procedures due to closing and re-opening and in line with COVID-19 measures. • Have there been any changes in your food business since the last time you were open? • Are you changing how you work? Do you have new pre-requisites, process flows, processes or activities? Have you updated your food safety management system to ensure any risks associated with these new processes or activities are controlled? • Check with your suppliers to see if they are operating as before and whether they can supply you with the same ingredients / products. Do you have new suppliers for some ingredients? If so, that may mean there are different allergens in the ingredients. You should assess this to ensure that the allergen information you provide to customers is correct. You may need to update your supplier list. You may also have to make other labelling changes. • Do you need to include additional cleaning measures (for example, more frequent cleaning of touch points, communal areas, etc.) into your cleaning programme? • Do you need additional handwashing/sanitising facilities for your staff and your customers? Decide if and when you are ready to re-open. You may find it helpful to prepare a re-opening checklist. When reviewing your food safety management system, pay particular attention to the following critical areas before re-opening: Pest Control Check As your food business has been closed for some time, you must check that there hasn’t been any pest activity in and around the premises. Check all areas of your food premises for signs of pests such as rodent droppings, smear marks, insect egg cases and dead insects. If you discover a problem, take immediate action to ensure the issue is resolved before reopening and any preventative work required is complete. Stock Check Check all your stock to see that it is still in date and has not deteriorated during the time your business has been closed. Check the instructions / conditions 68 MAY/JUNE 2020 | FOOD BUSINESS AFRICA
of use on open stock. Any food that is past its ‘use by’ date or has deteriorated or is no longer suitable to use should be disposed of and not used. Make sure to use the oldest stock first. Equipment and Services Check Check all your equipment (cooking, preparation, etc.) and services (refrigeration, heating, lighting, ventilation, water supply and waste) are in good repair, ready and suitable for use. If any maintenance is required it should be carried out where possible before re-opening. Deep Clean A deep clean is required after any prolonged period of closure to ensure that all food contact surfaces and utensils are safe for use. You must clean all equipment, surfaces, work surfaces, fridges, freezers, cooking equipment and utensils thoroughly. This includes areas that may have a less frequent clean, such as walls, etc. All touch points must also be cleaned, including door handles, handrails, tables and chairs, condiments, etc. It is important to clean with a detergent first to remove any dirt or debris. Then use a sanitiser or disinfectant in accordance with the manufacturer’s instructions. The cleaning of public toilets, bathroom sinks and sanitary facilities available for use by several people must be carefully performed. Consider the use of a disinfectant effective against viruses, such as 0.1% sodium hypochlorite, or other licensed viricidal products following the instructions for use provided by the manufacturer. Social Distancing Requirements You must follow the guidelines issued in relation to social distancing for your business. This includes staff, customers, delivery personnel or other visitors. Staff Before returning to work, you must follow the Return to Work Safely Protocol regarding your responsibility to staff and their individual responsibilities. In addition, you must: • Ensure all staff, returning, new or temporary are trained to their level of responsibility in relation to food safety and hygiene. Refresher training might be needed. Train staff on the new procedures you are putting in place and what they need to do when you re-open regarding COVID-19, social distancing and fitness to work policy, the wearing of personal protective equipment, cleaning and sanitation. • Have segregation and cleaning procedures in place in case you or one of your staff become ill while at work Source: Abridged from Food Safety Authority Ireland FOODBUSINESSAFRICA.COM
SUPPLIER NEWS INVESTMENTS
Symrise opens new US$55m flavorings production site in China CHINA – German flavour and fragrance manufacturer Symrise has opened a new production site in Nantong, China, after investing 50 million (US$55 million) in the state-of-the-art production facility - the company’s biggest individual investment in China. According to the company, the new site will enable it to benefit from the rapidly expanding flavor and fragrance market in the world’s second-largest economy and the company’s third-strongest revenuegenerating market after USA and Germany. While the investment is geared towards the future and growth of the company in the market, Symrise says that the development also correlates with the history of the flavour house in the country, where in
the past ten years, the company has grown around eight percent per year on average. “From these observations, we enacted measures and were successful in keeping our entire business running and opening our plant as planned. Ultimately, we want to reliably serve our customers in China and grow with them,” commented CEO Dr. Heinz-Jürgen Bertram on the strategic approach. The new facility adds to the German flavours and fragrances specialist’s growing presence. In November, the company inaugurated its Creative Center in the outskirts of Cairo, Egypt to strengthen its reach in the Middle East and Africa region.
INVESTMENTS
Palsgaard invests US$113m to expand its production capacity in Denmark
DENMARK – Palsgaard, Danish emulsifier producer has announced that it will invest DKK 750 million (US$113 million) to double the production capacity at its production facility in Juelsminde, Denmark, by 2024. According to Palsgaard, the investment will pay for a new spray cooling tower which will be fully operational by the first quarter of 2023 and will add an additional 30,000 tonnes to the company’s spray capacity. It will also fund the construction of multiple new reaction, distillation, and esterification plants, adding to a recently installed emulsifier pellet line
with a capacity of 10,000 tonnes, which is currently being commissioned. “This project is another major milestone in our development. By 2024 we will be able to double our current production capacity – something which took over a century to reach. It is the result of a decade of significant global growth for our business,” Jakob Thøisen, Palsgaard CEO said. “We have a number of new initiatives, including establishing a solar park and a biogas facility, which will provide the necessary power and waste management infrastructure to enable the new production capacity to also be carbon neutral. This aspect was a very important consideration in the planning process for the new investment.” This investment follows Palsgaard’s announcement last year that the company had achieved its goal of carbon-neutral production two years ahead of schedule.
R&D
AAK joins forces with GFI to drive innovation in India’s plant-based foods category INDIA – Food and beverage ingredients and solution provider, Tate & Lyle PLC, has entered into a distribution partnership with Solevo to expand its market presence in West Africa. Solevo, a leading blender, packer and distributor of agricultural and industrial inputs in Africa for over 70 years will become the ingredients providrs's exclusive distributor in Ivory Coast, Senegal and Cameroon. Dominique Floch, Regional Sales & Technical Director, Turkey, Middle East and Africa, Tate & Lyle, said, “It’s very exciting to have Solevo as our distribution partner for West Africa. The long history and experience of Solevo in Africa will be very useful to increase our market presence.” “The African food industry is growing fast and FOODBUSINESSAFRICA.COM
producers are looking for ingredients and solutions that help them meet growing consumer demand for great tasting, shelf-stable food and beverages that support healthier diets. With a partner like Solevo, we are ready to support these trends.” This agreement comes from the companies’ shared ambition to offer innovative solutions in the African continent and provide local consumers with access to high-quality food and beverage ingredients. “We are proud to have Tate & Lyle as a partner,” said Matthieu Van Bree, Head of Industrial Chemicals, Solevo. “With this partnership, we are expanding our position in the market of speciality food ingredients and solutions we offer to our customers in the food and beverage industry,” he added. MAY/JUNE 2020 | FOOD BUSINESS AFRICA
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M&A
Bühler and Premier Tech expand partnership for bulk packaging globally packaging solutions, especially to developing countries where the bagging operation is majorly done manually. The companies have announced that they are now taking their strategic cooperation two steps further by forming a 50/50 Joint Venture in China and ultimately growing the business into a global partnership for bulk packaging in the grain and food markets. Bühler said that the new global partnership will allow the company to access Premier Tech’s leading technologies in bagging and palletizing either through the newly created PT-Bühler joint venture in China, serving the world with cost-effective packaging, or directly through Premier Tech’s facilities for the highend food feed and grain markets worldwide. The SWITZERLAND – Grain and food processing solutions companies’ 50/50 joint venture in China is expected provider, Bühler Group and Canadian packaging to officially start on July 1, 2020. The aim of the joint venture is to develop and company, Premier Tech have expanded their initial partnership on industrial flexible packaging solutions market new cost-effective packaging solutions based on Premier Tech’s bagging expertise. Operating in into a global collaboration for bulk packaging. Bühler and Premier Tech initiated the partnership Wuxi, China, PT-Bühler will focus on serving the food in August 2019 with an aim of offering palletizing and feed markets in China, and other markets moving solutions to allow for efficient warehousing and towards cost-effective automation. INNOVATIONS
Tetra Pak introduces low energy processing line for juice, nectar and still drinks SWEDEN – Tetra Pak has launched a new, first-of-its-kind low-energy processing line for juice, nectar and still drinks (JNSD), which the food and beverage processing solutions provider said will take beverage processing to a new level of efficiency. Tetra Pak noted that the new processing line comes as a revolutionised process that treats beverages in two separate streams using a combination of pasteurization, filtration, and ultraviolet (UV) technology – which are aseptically blended together into the final beverage. Instead of pasteurizing the whole volume of the product, Tetra Pak explained that the new production line separates out water and pasteurizes only the concentrate: water is treated separately with Filtration and UV Light which requires a lot less energy. The company highlighted 70 MAY/JUNE 2020 | FOOD BUSINESS AFRICA
that the new JNSD line enables processors to reduce energy consumption up to 67% while water consumption used for cleaning-in-place, sterilisation and product change-over is cut up to 50%. The processing solutions provider noted that a pilot test on the new line found that the new line decreased water consumption by 50%, surpassing an internal target set at 25%. It also reduced water used in cleaning in place (CIP) and sterilization in place (SIP) by about 50%. Using a concentrate-to-water ratio of 1:4, Tetra Pak says that processors can cut energy use by 67% or more. “Assuming a system with 32,000 litres/hour capacity, steam 30 Euro per tonne, with electricity costing 15 cents per kW/h, the annual operating costs are approximately 138,000 Euro,” the company illustrates. Additionally, Tetra Pak noted
that the system volume in the new JNSD line is half that of the current solution. The new line can reduce the amount of water required for product changes, cleaning in place, and sterilization in place by 50%. “We realised that we needed to rethink JNSD processing and find a more sustainable solution, that at the same time still provides a high level of food safety & quality assurance for our customers,” says Maria Norlin, Subcategory Manager JNSD & Other Beverages at Tetra Pak. “The launch of our new low-energy JNSD processing line, ‘Best Practice Line for JNSD with Aseptic Blending’, illustrates how we are innovating with traditional processing methods in pursuit of more sustainable and efficient solutions.” The new technology helps processors to achieve their climate goals, and enables the industry to contribute towards global sustainability efforts, it adds. FOODBUSINESSAFRICA.COM
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YEAR 7 | NO. 36 | JUNE 2019
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AFRICA’S NO.1 FOOD, BEVERAGE & MILLING INDUSTRY MAGAZINE
IN THIS ISSUE: BIOFILMS MANAGEMENT IN FOOD & BEVERAGE INDUSTRY
Food Business
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JAN/FEB. 2019 NO. 34
AFRICA’S NO.1 FOOD, BEVERAGE & MILLING INDUSTRY MAGAZINE
INSIDE: MY FACTORY • MY STORY
EXECUTIVE INTERVIEW
CHANGING WITH THE TIMES TO A TOTAL BEVERAGE COMPANY
Kemisola Oloriegbe
THE PAST, PRESENT & FUTURE OF OUR COMPANY
Packaging Technologist, Nigerian Breweries
MILLING:
Importance of mill balance
COUNTRY FOCUS
BROOKSIDE DAIRY
BAKING:
CASHEW NUTS IN TANZANIA
Replacing sugar functionality in baked goods
UPCOMING AFMASS FOODTECH EVENTS IN AFRICA
CELEBRATING 25 YEARS OF GROWTH, INNOVATIONS & COMMUNITY IMPACT
AFMASS FOODTECH RWANDA EDITION - AUGUST 22-23, 2019 AFRICA FOOD INDUSTRY EXCELLENCE AWARDS - NOV. 29, 2019
W W W. A F M A S S . C O M
COCA-COLA:
MY CORPORATE JOURNEY
Founder & Chairman Kenafric Industries
CONFERENCES & EXHIBITIONS
COMPANY REVIEW
STEVIA: NATURAL SWEETENER OF CHOICE
FAHAD AWADH
FOODTECH
ICE CREAM AND CHOCOLATES KING
TEA: OLD BEVERAGE GETS ITS MOJO BACK
Co-Founder - YYTZ Agro Zanzibar
BHARAT SHAH
GLACIER PRODUCTS LTD:
BEVERAGE TECH
EVENT REVIEW AFMASS FOODTECH EASTERN AFRICA 2019
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INVESTMENTS RISE IN FLUID MILK PROCESSING IN AFRICA
FOOD, BEVERAGE & MILLING INDUSTRY IN TANZANIA
MY CORPORATE JOURNEY
Lucy Manning
Tanzania Breweries
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Liliane Umuhumuza
Africa Improved Foods
Fred Otieno
East African Breweries Ltd
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LAB-GROWN MEAT
AFMASS CONFERENCE & EXPO EVENTS IN AFRICA IN 2019 AFMASS FOODTECH TANZANIA EDITION - MARCH 29-30 AFMASS EASTERN AFRICA EDITION - KENYA - MAY 16-18 CONFERENCES & EXHIBITIONS
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JULY/AUGUST. 2018 NO. 31
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