World Grain - September 2015 - 8

FROM THE EDITOR-IN-CHIEF

Sub-Saharan Africa
fit for growth

t was fascinating observing the speed
with which Nestle moved recently to
correct the impression it may have created about what it thinks of the opportunities
for investing in Africa. The negative impression came when it cut back on its staff in
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out that the staff changes involve fewer than
1% of the 11,000 people the Swiss food and
drinks group employs in sub-Saharan Africa, it emphasized that the southern region of
Africa is one of its fastest growing markets
and that it continues optimistic about the
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The statement concludes by declaring that
Nestle wished to correct any idea that it was
"somehow pulling back from Africa."
Interpreting all of this to mean Nestle is
enthusiastic about the food business in Africa may be overstepping. Yet, it is important
to note that the pace of investing is on the increase and that the food industry is attracting
more than its traditional share. Nestle has
succeeded around the world by producing
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of the regions it is serving. Whereas in the
United States and in other parts of the developed world, the group's research focuses on
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with consumers, its attention in Africa is to
products using native ingredients and offering easy food preparation to consumers
without modern kitchens.
Food industry investing in sub-Saharan
Africa has been a mixed lot, often contending with African entrepreneurs who gain a
foothold by taking over businesses that western investors might have founded. Western
FRQWUROVWLOOGH¿QHVPDQ\OHDGLQJÀRXUPLOOing enterprises but large groups of locally
owned mills, including several with public
stock ownership, are growing. A marked difference rules in who controls many parts of
the food industry from country to country.
South Africa is either the founding nation or
the target of many of the largest food-related
enterprises that look to promising markets
wherever located.
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other industries popular in western nations

is reviewed, the lack of sub-Saharan ingreGLHQWV W\SLFDOO\ VXUIDFHV7KDW GH¿FLHQF\ LV
VWULNLQJZKHQLWFRPHVWRÀRXUPLOOLQJ¶VQHHG
for wheat. Most of the region below the Sahara Desert is unsuited, or ill-suited, for producing wheat. This accounts for Nigeria, the
most populous nation of the continent, being
one of the world's largest wheat importers,
with takings near 5 million tonnes likely in
2015-16. All of sub-Saharan Africa is projected to import 7.5 million tonnes, whereas
1RUWK$IULFDZLWKDTXDUWHUDVPDQ\SHRSOH
will take 19 million tonnes. This difference
is explained by the proximity of the former
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It is the minimal per capita consumption
of wheat foods in the major region of Africa - a situation duplicated in many other
western foods - that makes Africa such a
favored target for western food manufacturers seeking areas ripe for development. It is
with exceptional caution that food manufacWXUHUV KHDGTXDUWHUHG LQ WKH ZHVWHUQ ZRUOG
have sought to follow what Nestle and a few
other companies have done to establish manufacturing in Africa. In light of disappointing domestic food business, all that may be
swiftly changing. Word from food companies in the sub-Saharan region tells of the
active pursuit of investment opportunities,
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and also as companies themselves search for
every chance to expand markets.
As word spreads that Africa has become
WKH SULPDU\ WDUJHW RI SULYDWHHTXLW\ LQYHVtors, the chances of commercial ventures
gaining a foothold shrink. It is apparent that
much of the caution that guided such unGHUWDNLQJVLQWKHZDNHRIWKHKRUUL¿F
¿QDQFLDO FULVLV LV VZLIWO\ PHOWLQJ DZD\
Whether these new investments bring great
success or not is no longer the issue, especially in the food industry. Here is a region
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for making great progress by pursuing the
readily available goal of improving what
they eat.
Morton I. Sosland
(GLWRULQ&KLHI

Chairman and CEO
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WORLD GRAIN (ISSN 0745-8991) Volume 33, issue 9,

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World Grain - September 2015

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