Saturday, February 26, 2011

Announcement: US Trade Mission to Nigeria, March 8-10

The U.S. Commercial Service is facilitating an Executive-led Trade Mission from the United States to Nigeria, March 8-10. Members of the Trade Mission will spend March 8-9 in Lagos and March 10 in Abuja. They are highly interested in meeting potential partners and associates to discuss trade and investment opportunities in Nigeria. While the mission is in Lagos and Abuja, members will like to hold one-on-one sessions with potential Nigerian partners and end-users like you.

If you or any of your members and associates is interested in meeting with members of the trade mission, please send your brief company profiles specifying your area of interest and the company you will like to meet to Anayo.Agu@trade.gov.

The trade mission include participants from the following companies:

Agribusiness: Reinke
Aviation: Boeing
Construction:IMS Engineering,Structuracasa
Energy: MWP Industrial, Nilution
Medical: Alliance Bio-Med, Prime Health, Skelley and STF.
Security: Castle Shipboard Security, KDH Defence
Technology:I2 Document and Digital Solutions, Rockwell Automation
Telecommunications: Motorola,Net Tech
Transportation: Crown Auto Parts, Kofa International, Nationwide Equipment

Supermarket shopping hurricane to spread in Nigeria

From all indications, Nigerians growing preference for shopping in supermarkets is set to grow in coming years especially in the cities. With an expanding middle class, increasing number of repatriates and a rapidly growing number of foreigners living and working in the country, this hurricane would not abate soon.

Uzochukwuamaka Otoh of the Nigerian Guardian Newspapers (http://www.ngrguardiannews.com) threw more light on this emerging trend in a report on the implications of supermarket consumption on Nigerians. Read on ...

A walk into the Shoprite Supermarket at Surulere presents one with a steady stream of shoppers, who seem to have shunned the open market for the luxury of mega supermarkets. The long winding queue of people at the bakery section tells of Nigerian’s love and growing appreciation for the unique pastries, which can only be found in these mega supermarkets. The French Baget and German flat bread have come to be accepted as an especial variety and departure from the regular bread, which Nigerians are used to.

Supermarket, as it known today, was initially a phenomenon of independent and small regional chains. Eventually, large chains caught on as well, and they refined the concept, adding a level of refinement that had been lacking from the austere stores of the early 1930s. In the late 1930s, A&P began merging its thousands of small service stores into larger supermarkets, often replacing as many as five or six stores with one large new one. The result was a reduction in the number of stores and increased sales resulting in the success of the supermarket phenomenon.

In Nigeria, the 70s and 80s presented us with supermarkets of international repute; the Leventis, UAC and Kingsway are testimonial to Nigeria’s blooming and flourishing economy. Today, most of these stores have become extinct and have come to be replaced by foreign franchise. The Shoprite Stores of South African origin have come to assume a place of importance in the city of Lagos; other international mega supermarkets like Harrods and Walmart are said be considering penetrating the Nigerian market.

A survey of mega supermarkets in Nigeria show that the mega supermarkets all tend to have little points of differentiation and also seem to be concentrated in the city of Lagos, thereby excluding other major cities like Calabar, Port Harcourt and Abuja. This phenomenon, itself is a disadvantage, considering that Nigeria is still a virgin land for mega supermarkets.

Also, putting into consideration the business unfriendly environment, which the Nigerian terrain presents, the prospects for managing a mega supermarket seem daunting especially. This is more so considering the rising appreciation for leisure, which seems to be more profitable for an investor in the hospitality industry than in the retail supermarket industry.

The need for constant power and water, security considerations, steady supply of goods and political considerations associated with establishing a mega supermarket in Nigeria also stand as impediments. From the consumers’ perspective, mega supermarkets are here to stay and will definitely constitute a strong competition to the open market.

The way and manner by which Nigerians have accepted influx of mega supermarkets, especially in Lagos, is an indication that the attitude of supermarket has come to stay, and is a force to be reckoned with as far as retailing in Nigeria is concerned. These mega supermarkets will increase the standard of retail business in Nigeria and also define today’s business environment and consumers in Nigeria as time goes on.

Tuesday, February 15, 2011

Zambian Beef Processor Expands to Nigeria to Cater to New Tastes as Incomes Climb

Have you been reluctant in making that decision to do business in Nigeria or elsewhere in Africa? Then, read the success story of a Zambian farmer that took the plunge two years ago. Story was by Will Connors, Wall Street Journal Reporter in Lagos, Nigeria.

In a brief discussion with him at the 50th independence anniversary of Benin Republic in Lagos, he came across to me as someone with great hope in the future of Africa...Now he is showcasing the continent in his Africa Rising series for Wall Street Journal. Well done! Ndudi Osakwe


Zambian Beef Processor Expands to Nigeria With Aim of Spreading Out Across the Continent.

IKENNE, Nigeria—After driving two hours—skirting truck-size potholes, fording a flooded town and dodging a body—Pieter Swanepoel arrives at a dilapidated farm about 50 miles from Lagos, Nigeria. He has reached the launching pad for Zambeef Products PLC's $10 million expansion into Africa's most populous country. A few hundred yards from where the South African accountant stands, neat rows of soybeans grow and a new meat-processing facility buzzes with activity where once there was a collection of derelict buildings. "There was sweet blow-all in terms of infrastructure," he says.

Under Mr. Swanepoel's leadership over the last two years, Zambeef has built an efficient supply chain and opened a handful of bustling retail stores in one of Africa's toughest but most promising markets. His goal is to turn the Zambian meat-and-produce company into Africa's Coca-Cola for meat, with Zambeef's Master Meats brand in shops and market stalls across the continent.

With annual revenue of $162 million, Zambeef is a bite-size example of companies small and large expanding in Africa, transforming the world's next billion-person market in similar ways to how earlier economic booms changed China and India.While U.S. and European companies are waking up to the continent's accelerating growth, scores of African companies like Zambeef also are expanding.

Telecommunications company MTN Group Ltd. has scooped up 116 million subscribers in 21 African countries on the continent from its headquarters in South Africa. Nigeria-based Dangote Cement PLC has acquired land and opened plants in Ghana, Cameroon and Ethiopia. Togo-based Ecobank Transnational Inc. set up branches in 30 African countries, doubling its presence in five years.

While the economies of U.S., Europe and Latin American contracted in 2009, Africa's grew. The International Monetary Fund in October forecast that growth in the 47 countries of sub-Saharan Africa will reach 5.5% this year. That growth is creating legions of consumers.

Around 10 million Nigerians moved into the middle-income bracket, meaning they could buy more than just necessities, in the past five years, according to an estimate by London-based private-equity firm Actis LLP. Nigeria's estimated $9 billion market for red-meat products is the continent's second biggest, after South Africa, according to a recent study sponsored by the British government.


Zambeef expects that as the middle class in this country of some 150 million people grows, so, too, will the number of people shopping in Western-style stores. The company hopes to lure customers used to buying meat in open-air markets by offering clean, packaged products while charging only slightly more than the markets. While a pound of beef might cost around $4.10 at a Lagos open-air market, Zambeef might charge about $4.75.

Multinationals also have high hopes for Nigeria. "We see Africa, with its one billion inhabitants, as a continent of limitless possibilities," Nestle SA Chief Executive Paul Bulcke said last week as he opened an $80 million factory in the same state as Zambeef's farm.

No one, however, is discounting the perils of investing in a continent rife with corruption, short on dependable infrastructure and heavy with unstable governments, as Northern Africa has shown in recent weeks.

Mr. Swanepoel's experience as Zambeef's managing director in Nigeria shows that doing business in Africa will be just as messy as in other emerging markets. To deal with an unreliable power supply, Zambeef runs its equipment here on its own diesel-powered generators 24 hours a day at a cost of tens of thousands of dollars a month. As he travels among Zambeef's 11 stores and plants, Mr. Swanepoel (pronounced SWAH-nuh-pole) spends several hours a day stuck in Lagos traffic jams.

"A lot of the time you say to yourself, 'My god, how can we make this work?,' " Mr. Swanepoel says. "But eventually you figure the puzzle out. In Nigeria, you need logic and lots of patience. A bottle of good wine doesn't hurt, either."

For more on the Africa Rising series go to: http://online.wsj.com/article/SB10001424052748704422204576130064161822374.html

By WILL CONNORS, Wall Street Journal / Dow Jones Newswires Correspondent
Lagos, Nigeria