Despite criticism from local business analysts that South Africa should ditch its “influencer illusion” as the gateway into Africa, international traders looking at exporting to Africa, especially into subSaharan markets, disagree. During a trade presentation hosted by the Johannesburg Chamber of Commerce and Industry recently, Amran Hamid of Malaysian food manufacturer Dapur Penyet said South Africa was still seen as a stepping stone into areas further north. “The best way to enter Africa is through South Africa.” The MD added: “South Africa is very dynamic and when it comes to trading with other African countries knows what rules and regulations should be followed.” He said a key product they had identified – with huge traction potential across the continent – was palm oil. Dapur Penyet’s production facility in Kelantan State near Malaysia’s Thai border is keen to leverage off an expression of interest received from Malawi. Should it come to pass it will only be the company’s second international offset point since it started exporting to Sri Lanka. But barriers to entry, such as Malawi’s geographical position and its Customs, as well as its culture and lingua franca in relation to Malaysia’s mostly Malay-speaking business fraternity, has prompted Dapur Penyet to consider seeking an investment partner in South Africa. “It would be easier that way. So we’re looking for someone who can distribute for us and who has expertise in African market development.” And although the ideal business partner is eluding them at the moment, Hamid believes it will most likely come in the shape of a start-up importer. “We need someone with experience in the palm oil business who is young, agile and eager to grow through distribution into other African markets.” He said because Dapur Penyet itself was “small and young”, they believed in looking for a peer-like partner willing to expand fast. “Bigger companies are too slow and don’t get things done quickly.” Hamid was particularly interested to find out more about the African Continental Free Trade Area, saying its $3.8 trillion GDP potential was good news for investors like Dapur Penyet. The projected consumer potential of 1.2 billion people across the continent would make it “a massive market for a product like palm oil”, Hamid said. He added though that it reinforced the notion of having a grounded understanding, preferably through a local partner, of African market vagaries and related aspects crucial to shipment efficiencies. One of these he mentioned was logistics. Dapur Penyet hadn’t even considered shipping to ports like Nacala or Beira because of its proximity to Malawi. Yet it merely confirmed, he told FTW, why having a local investor was the best way to get involved in Africa.
INSERT: The best way to enter Africa is through South Africa. – Amran Hamid
