Global and South
African companies
– especially
pharmaceutical, fastmoving
consumer goods (FMCG)
and retail – are planning
expansion into
Africa over the
next two years
and supply
chains need
to adapt to
meet the new
requirements
and leverage the
opportunities.
This was the
message from
Mark Cleeve-
Edwards,
executive:
business
development at Barloworld
Logistics, during the launch of
the 2015 supplychainforesight
survey in Johannesburg recently.
“While opportunities in
South Africa have become
more complex and constrained,
opportunities in Africa have
become potentially more
lucrative, with diversification
of commodities, services and
products becoming the more
prudent strategy for companies
wishing to expand,” he said.
Deloitte Consulting reported
recently that
Africa’s middle
class had
tripled over the
past 30 years,
and the current
trajectory
suggests that
the African
middle class
will grow to
1.1 billion in
2060, making
it the world’s
fastest growing
continent.
This growth, coupled with
the forecast GDP growth of over
6% which the International
Monetary Fund (IMF) is
predicting, is driving the
potential for retail growth on the
continent significantly through
increased purchasing power and
consumer demand.
The 2014 AT Kearney African
Retail Development Index
ranked the top 10 countries in
sub-Saharan Africa for retail
expansion and highlighted
Rwanda, Nigeria, Namibia,
Tanzania and
Gabon as Africa’s
most attractive
markets for
retailers looking
to expand.
According
to the index,
African
retailers
such as
South
Africa’s
Shoprite
– which
operates in
more than 16 African countries
– and Kenya’s Nakumatt group
have done most of the expansion,
but global retailers are moving
in.
Wal-Mart – which acquired
South Africa’s Massmart
in 2011 – plans to open 90
supermarkets across Africa in
2015, 2016 and 2017, said AT
Kearney, adding that African
expansion for retail companies
put major added pressures
on even the most seasoned
professionals. “The
route to market
for products
can involve any
combination
of rivers,
mountains,
deserts, jungles
and f loods
– not to
mention
road and
railway
difficulties
and
governance
issues that
can stymie the transporting of
goods across borders,” reads
the report. ”Yes, Africa presents
a major opportunity, but
capturing it will require some
patience, hard work and a little
ingenuity,” said AT Kearney.
INSERT & CAPTION
While opportunities in
South Africa have become
more constrained,
opportunities in Africa have
become potentially more
lucrative.
– Mark Cleeve-Edwards
