Africa – Private Seminar
Barry Brennan
Glanbia
Business Development Director
What I intend covering:
•
Glanbia – Africa – Market opportunity and insight
•
Specific focus
•
Investment and way of working
•
Key learning
•
Conclusion and Questions
Glanbia plc
• Strong global presence in key food markets and sectors around the world
• Manufacturing and processing in 7 countries, sales / technical support in 14 countries
• Exports/distribution to 130 countries+
UK
Canada
Ireland
Germany
Belgium
USA
China
Mexico
Dubai
Indonesia
Nigeria
Uruguay
Sales/technical support locations
Manufacturing/processing and customer service locations
Export/product distribution locations
Australia
Why is Africa important to us?
•
Ireland is an excellent source of dairy but requires significant exports
•
Milk deficit region
•
Africa fits the bill and while logistically a challenge - only 28 days to
market
•
Population growth – easing of access – currency union
•
GDP growth and CAGR milk consumption (4-5%) – supported by
policy & urbanisation
•
Positive perception of milk from a health and wellness perspective
•
Multi – channel and Value Add emergence
World dairy production
Geographical
distribution
(all
categories included)
2010 (million tons)
of world production in
World Total: 711 million tons
North America 95
13%
Europe 217
31%
Asia 257
36%
Central America 16
2%
South America 61
9%
Africa 37
5%
Oceania 26
4%
CNIEL / IDF, FAO Food Outlook, December 2010
5
Real GDP Africa top 20 ( based on 2010)
Real GDP Growth Rates, 2003-2013
Chad
Ethiopia*
Zimbabwe
Congo
Niger
Burkina Faso
Nigeria
Ghana
Zambia
Botswana
Rwanda
Congo Dem. Rep.
Tanzania
Mozambique
Seychelles
Malawi
Gabon
Namibia
Gambia
Uganda
2008
2009
2010
2011 (e)
2012 (p)
2013 (p)
3.4
10.8
-17.7
5.6
9.3
5.2
6.0
8.4
5.7
2.9
11.5
6.2
7.4
6.8
-1.0
8.6
5.3
3.4
6.3
10.4
4.1
8.8
6.0
7.5
-0.7
3.2
7.0
4.0
6.4
-4.9
6.0
2.8
6.0
6.3
0.5
7.6
1.9
-0.4
5.6
4.2
14.3
11.4
9.0
8.8
8.0
7.9
7.8
7.7
7.6
7.2
7.2
7.2
7.0
6.8
6.7
6.7
6.6
6.6
6.3
6.1
2.8
10.7
6.8
5.3
4.2
5.1
6.7
13.7
6.6
6.6
8.6
6.5
6.4
7.2
5.0
5.8
5.8
3.8
5.5
4.1
7.0
7.0
4.4
5.7
11.2
5.3
6.9
8.3
6.9
4.4
7.6
5.1
6.8
7.5
4.0
5.0
4.4
4.4
5.6
4.5
3.2
7.6
5.1
4.7
6.0
5.5
6.6
7.7
7.3
3.9
6.9
6.0
7.1
7.9
5.0
5.2
3.3
4.0
5.6
4.9
Real GDP Africa Remainder ( based on 2010)
Mali
Kenya
Lesotho
Liberia
Mauritania
Egypt *
Sierra Leone
Sudan
Mauritius
Senegal
Burundi
Morocco
Togo
Djibouti
Guinea-Bissau
Angola
Algeria
Central Afr. Rep.
Cameroon
Tunisia
Libya
South Africa
Benin
Côte d'Ivoire
Eritrea
Guinea
Equatorial Guinea
Africa
Real GDP Growth Rates, 2003-2013
2008
2009
2010
2011 (e)
2012 (p)
2013 (p)
2.7
4.5
3.1
6.9
4.3
1.8
5.7
2.8
4.1
4.0
4.0
4.6
3.9
3.5
5.1
3.5
2.8
3.0
4.1
-1.1
-41.8
3.1
3.0
-5.9
8.2
4.0
7.0
3.4
3.5
5.2
4.0
8.8
4.7
0.8
6.2
2.0
4.0
4.2
4.8
4.5
4.2
4.8
4.6
8.2
3.1
4.2
4.4
2.5
20.1
2.8
4.2
8.6
6.3
5.1
4.0
4.5
5.1
5.5
4.5
7.2
4.9
2.8
6.2
2.8
4.2
4.7
5.3
4.8
4.4
6.7
4.9
7.1
4.2
4.6
4.6
3.7
9.5
3.6
4.1
5.5
3.5
5.5
6.6
4.8
5.0
1.5
5.4
7.1
3.5
7.2
5.5
6.8
5.5
3.7
4.5
5.6
2.4
5.8
3.2
13.8
2.4
2.0
2.9
4.6
5.6
3.6
5.0
2.3
-9.8
4.9
10.7
5.5
4.5
2.6
2.9
4.6
-1.2
4.7
3.2
4.5
3.1
2.1
3.5
4.8
3.4
5.0
3.0
2.4
2.4
1.7
2.0
3.0
0.5
-1.5
2.7
3.8
3.9
-0.3
5.7
3.1
5.8
5.6
5.6
5.5
5.2
5.1
5.0
5.0
4.2
4.1
3.9
3.7
3.7
3.5
3.5
3.4
3.3
3.3
3.2
3.1
2.9
2.9
2.6
2.4
2.2
1.9
-0.8
5.0
Primary focus markets to this point
Greatest demand for milk imports
•West Africa
•Milk powder + variants
• North Africa
•Cheese & Milk Powder
•Central Africa
•Milk Powder + variants
Geographical variations of dairy products
Dairy products consumption levels
consumption
in 2010(kg per capita)
Canada
246
Russia 249
EU
290
United States
275
Algeria
83
Mexico
121
China 36
Iran
115
Japan 71
India
96
Philippines 13
Brazil
157
Indonesia 11
World average
103 kg / capita
Argentina 215
CNIEL / IDF, FAO Food Outlook, PRB
Less than 50 kg
100 to 200 kg
50 to 100 kg
Over 200 kg
9
Specific focus and strategy
•
Develop a hub and spoke type marketing structure – around core
countries via local in country partner JV or Strategic Relationship
–
–
•
Investment in bricks and mortar possible but difficult - Innovation and
Technical support is more important to us
–
–
–
•
Bricks and Mortar investment in Nigeria ,
Senegal solely Innovation and Technical Support with equity stake.
Would always consider direct investment with the right business case.
Innovation crucial to success
–
–
•
Example Senegal – adjacency – Guinea + Guinea Bissau + Mauritania + Gambia
Assisted by common currency + trade zones
Cost focus , value add focus , displacement of value add imports
Enhanced functionality
Quality and Branding
–
The African consumer is among the most discerning globally and can be unforgiving
Senegal
•
Strategic Partner since 1994 ~ grown to €80m plus turnover + equity stake
available
•
Largest repacking facility in West Africa with c 800 employees
•
Advanced chill chain distribution + national and adjacent distribution
•
Leading brands in Senegal – with 50% market share of re-packed milk
•
First mover diversification along value chain
–
–
Yoghurt \ Sterilised Milk further €1.5m investment in Q4 2012
Health & Wellness focus with fortified and enhanced products
•
Strong Innovation and Technical support – seamless collaboration
•
An embedded Glanbia person on the ground
Senegal – key learning
•
Political and Economic stability – very comforting
•
OHADA – Business law harmonisation robust
•
Economic and Monetary Union ECOWAS & UEMOA – huge advantage € link
•
Infrastructure improvements ongoing
•
Patience is a virtue - need to adapt to local pace
•
Banking system – supportive but challenging
•
Bureaucracy is ubiquitous – don’t point the finger!
•
Understanding the culture will help you understand the market
Conclusion
•
Senegal in just one example of where we have had success – Mali , Togo , Nigeria are
among the others – its a very similar template.
•
We have no fears doing business in Africa and want \ need to extend our footprint –
along similar lines to meet our 2015 growth agenda.
•
There is a massive opportunity in Africa – it fits well with Irish culture – but we need to
encourage more people to speak French\ Portuguese and be prepared to travel
extensively across the continent.
•
Need to learn that to satisfy both growth agendas , we must find balance and leave
something on the table for everybody
•
In the case of milk as an staple food West Africa will never feed itself but we have shown
that with the correct model both parties can benefit and grow their businesses.
•
It has challenges that need to be overcome but that is not unique to the African
continent – they may be different but are solvable.
Finally
•
Pick your partners as you would do in any situation - carefully – nothing new in
that I suggest!
•
Any Investment \ Initiative demands focussed planning and must be project
managed tightly –
•
Familiarise yourself with the \ Banking \ Statutory \ Legal protocols around
doing business locally
•
People make it happen and relationships are paramount