Africa: Unparalleled Agribusiness Opportunities
Today Africa is home to five of the ten fastest growing economies in the world. By 2050, it will be home to a quarter of the world’s population. With a land mass more than 3 times larger than that of China, it contains roughly 60 percent of the world’s uncultivated arable land! Rich resource potential coupled with an emerging consumer class.
Dr. Damien McLoughlin, Dean of the Michael Smurfit Graduate Business School, University College Dublin, encouraged participants at Alltech’s 30th Annual International Symposium to seriously consider business development opportunities in Africa, and he shared important lessons for success:
- Pathfinder firms are already conducting business in Africa. Dr. McLouglin shared the success stories of the VP Group in Kenya, Zambeef in Zambia, the agricultural giant Olam, and the world’s largest premium spirits company, Diageo.
- He emphasized the importance of building your knowledgebase before investing, managing the problem of too much opportunity, and of thinking first about routes to markets in a land with little or no retail infrastructure.
- He underscored the importance of tailoring innovation to meet the needs and desires of the African consumer, who are known to already like many western brands.
- Lastly he described what he called a “war for talent” and discussed the importance of developing local talent to build management teams and the necessity for stakeholder engagement.
Consider Zambeef Products PLC. Incorporated in 1994, Zambeef and its subsidiaries now represent one of the largest, integrated agribusinesses in Zambia and as such are involved in the production, processing, distribution, and retailing of beef, chicken, pork, milk, dairy products, eggs, edible oils, stock feed, flour and bread. Zambeef’s core strategy has been to offer consumers the most accessible and affordable quality protein by expanding retail and wholesale distribution to increase regional market penetration. Zambeef has achieved its success by pursuing a vertically integrated business model that provides a strong foundation of growth through margin capture, securing supply chains, and reducing risk and earning volatility.
According to Dr. McLoughlin, “It is not too late for new investors to get involved in Africa.” He contends that the private sector has the power, in cooperation with nongovernmental organization, government agencies, and universities, to tackle tough developmental challenges now.