Food Business Africa Dec Jan 2015

I n t h i s I s s u e : b e e r i n d u s t r y i n ta n z a n i a A F R I C A ’ S f o o d an d b e v e ra g e

in d u s t r y

MAGAZINE

Alpha Grain Millers feature p. 24

Inside coke enters dairy market p.6 new md at new kcc

p.13

glass packaging

p.17

rise of halal foods

p.20

Osman Maalim Mohammed, General Manager, Alpha Grain Millers

www.foodbusinessafrica.com

Volume 2 ISSUE 6, No. 10 • ISSN 2307-3535

a foodworld media publication

class in glass KIOO is the leading Container Glass manufacturer in East & Central Africa for packing Beer, Carbonated Soft Drink, Food & Liquor products on high speed & hot filling lines.

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SPECIAL REPORT:

20

Contents Nurtition & Health

16

Whole Grains: The importance of including whole grains in the human diet.

Packaging:

17

The Glass Advantage: The advantages of packaging foods and beverages in glass.

Processing:

24

Compressed Air: Uses and quality aspects

industry FOCUS:

27

Tanzania: A profile of the beer industry in Tanzania.

food safety:

18

Milling: The important food safety aspects in the milling of grains.

Pictorials:

19

Food Processing & Packaging Expo 2014

Regulars 2 Editorial 3 Calendar of Events

4 International Insights 8 African Insights

Cover Photo: Mr. Osman Maalim Mohammed, General Manager, Alpha Grain Millers foodbusinessafrica.com

HALAL: Halal foods are increasing in the African market. We provide a market analysis and pinpoint opportunities and challenges to their growth in Africa.

Company feature

24 In the

Alpha Grain Millers: A grain milling company in Kenya

Next issue

february/ march 2015

Special Report: Private Label Products in Africa Industry Focus: Maize Milling Industry in Kenya Packaging: Extended Shelf Life Packaging of Dairy Processing: Equipment Lubrication Formulation: Sodium reduction and Eggs PLUS Regular News, Nutrition & Health and Food Safety Food Business Africa | dec 2014/Jan 2015

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editorial www.foodbusinessafrica.com

Eac’s Food and Drugs Authority idea Commendable

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he news was buried deep in the pages of the local daily newspapers. Politics had to take precedence over the very critical subject of food safety. The news that the East African Community had advised countries belonging to the community to form food and drugs regulatory bodies, should have taken the lead if matters of food safety were given the prominence they deserve. Sadly this was and is still not the case.

“The ministers urge Republic of Kenya to enact a law for the establishment of Kenya Food and Drug Authority (KFDA),” read part of a communiqué issued after a meeting of the Council of Ministers of the EAC in October 2014.

Kenya would then follow Tanzania which has its own Food and Drugs Authority, as the region plans to form the East African Community Medicines and Food Safety Commission. Uganda, Rwanda and Burundi were also urged to form their own authorities by the community. By doing so, EAC countries would then join other African countries like Nigeria who have separated standards development from food safety regulation. This move is long overdue in the continent.

This directive by the EAC follows our own Power Talk article in the June-July 2014 issue of this magazine, where in an article, “Kenya in need of a strong food safety regulatory body” we urged for the creation of a food and drugs authority, in the face of many reports of a number of deaths resulting from consumption of unsafe food and drinks in the country.

We would want to repeat this call, but this time round to urge the food, feed and agriculture industry, Government and NGOs involved in the food supply chain in Kenya and other EAC countries not to rest on their laurels, but to be part of the formation of 2

dec 2014/Jan 2015 | Food Business Africa

these important authorities. We ask for the industry to create time and engage the Governments in a positive way that ensures the legislation that comes out of this process strengthens the food and beverage sector and improves consumer safety and health. Of critical importance will be legislation that includes capacity building of the industry and that encourages manufacturers to make safe food and enhance their ability to trade regionally and internationally. A weak legislation will not be in the best interest of all concerned.

Talking of food safety, the publishers of this magazine have announced the first food safety conference in the region. The Food Safety Summit Africa Conference and Expo will bring together regulatory authorities, food, feed and agro industry players, NGOs and the public to a two-day conference that will focus solely on food safety issues in Africa. The conference will provide an important forum to discuss the food safety agenda on the continent going forward. It is slated for May 2015 in Nairobi, Kenya.

In this issue, in our Industry feature, we are glad to have Mr Osman Maalim Mohammed, the General Manager and Mr Mohamednur Khalif, Managing Director of Alpha Grain Millers, a Nairobi, Kenya- based maize and wheat miller. Alpha Grain Millers is a great example of how Africa provides a great investment destination, having grown tremendously in a four year span. And with the father-son team of Mr Khalif and Mr Mohammed, with the older mentoring the younger generation, the future of this continent can only be brighter.

Have a good read.

Editor

Volume 2 issue 6, No.10 • ISSN 2307-3535 Publishers: Foodworld Media Editor: TJ Kwach Contributors: Bernard Maonga • Liz Wawire • Loretta Mugo Design & Production: Centrepress Media Advertising & Subscription: Selina Wangusi

Foodworld Media P.O Box 1874-00621, Village Market, Nairobi Kenya Tel: +254 20 8155022, Cell: +254 725 343932 info@foodworldmedia.net www.foodbusinessafrica.com

Food Business Africa Magazine Professional Network @Foodbizafrica Food Business Africa Magazine RELATED PUBLICATIONS

industry event

SUBSCRIPTION Contact: info@foodworldmedia.net Annual Subscription: Kenya: KSh 2900 (VAT inclusive); Africa: US$ 70; Rest of World: US$ 90 (including postage) Two Years: Kenya: KSh 5600 (VAT inclusive); Africa: US$ 130; Rest of World: US$ 170 (including postage) Food Business Africa (ISSN 2307-3535) is published 6 times a year by FoodWorld Media Ltd. Special event issues may also be published. The magazine is distributed for free to food and beverage processing companies in Africa. The publishers reserve a right to determine the number of free copies to any company. The magazine is available through subscription for the other stakeholders in the food chain, including suppliers to the sector. Postage is paid at Nairobi, Kenya. Send address changes to FoodWorld Media Ltd by phone or email.

Copyright 2015. Reproduction of the whole or any part of the contents without written permission from the editor is prohibited.

All information is published in good faith. While care is taken to prevent inaccuracies, the publishers accept no liability for any errors or omissions or for the consequences of any action taken on the basis of information published.

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EVENTS

EVENT

calendar

February 8-12: Gulfood, Dubai, UAE The biggest annual food and hospitality show in Dubai www.gulfood.com

preview

Region’s inaugural Food Safety conference and exhibition announced

March 2–3: Global Food Technology & Innovation Summit, London, UK The summit brings together world leaders in food research & development, food innovation, marketing and food technology to debate and shape the future of the food industry. www.foodinnovate.com March 17-19: Propak East Africa, Nairobi, Kenya Africa’s largest printing, packing and plastics exhibition now in East Africa www.propakeastafrica.com March 24-27: Anuga FoodTec, Cologne, Germany The leading global trade fair for the international food and beverage industry www.anugafoodtec.com March 28-31: Snaxpo 2015, Orlando, FL, USA The most comprehensive trade show devoted exclusively to the international snack food industry www.snaxpo.com April 1-3: Food Ingredients China Shanghai, China FIC 2015 is the most important international exhibition show on food ingredients and additives in Asia. www.chinafoodadditives.com April 19-20: Natural & Organic Products Europe - ExCel, London, UK Europe’s leading natural business event focused on natural and organic products www.naturalproducts.co.uk April 28-30: Agrofood Nigeria, Lagos, Nigeria 1st international trade show on agriculture & livestock, food, beverage & packaging technology and food, beverages & hospitality. www.agrofood-nigeria.com May 7-9: FoodAgro 2015 East Africa’s premier International Food, Hotel & Agriculture exhibition www.expogr.com/kenyafood May 14-15: Food Safety Summit Africa Conference & Expo The Summit brings together Government regulatory agencies and the food, feed and agro industries in Africa to discuss policy, regulation and consumer concerns on food safety. www.FoodSafetySummitAfrica.com May 19–23: Ipack-Ima 2015Milan, Italy Ipack-Ima is among the most attractive global exhibitions for suppliers of technology and materials for processing and packaging. www.ipack-ima.it/eng/home

Have an Event you would like to see here?

Contact us on info@foodworldmedia.net

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may 14 -15 2015, Nairobi kenya

he inaugural regional Food Safety Summit Africa Conference & Expo, due to take place in Nairobi, Kenya, in May 2015, has been announced.

According to the organizers of the first ever food safety summit targeting sub-Sahara African countries, FoodWorld Media, publishers of leading trade publications Food Business Africa and Agri-Business Africa, food safety remains one of the industry’s biggest draw-backs as the industry evolves in the Continent.

“Poor quality due to lack of knowledge and patchy enforcement of the law continues to plague African countries as they struggle to meet stringent quality requirements by their key trading partners in Europe and the US market”, note the organizers.

The recent case of the European Union warning several African countries including Kenya about their products failing to meet new EU regulations on pesticide residues comes to mind.

“The lack of a food safety culture in the industry and the region has affected Africa’s ability to trade with itself, with its key export markets and even more critically, the health of its own population, due to lack of systems to enforce the quality of locally consumed food and agro produce”, add the organizers.

The Food Safety Summit Africa Conference & Expo is a pioneer industry event that will bring international and regional service and product providers together with policy makers, regulatory agencies, entrepreneurs, managers and professionals in the food, feed and agro industries from across Africa.

The two-day conference will focus on current and emerging food safety issues in Africa. It is slated for May 14-15 2015 in Nairobi, Kenya.

The forum will take the farm-to-table approach - covering the entire value chain from production, handling and storage, processing, retail and distribution of food, beverages and agricultural produce.

Some of the key topics slated for discussion include chemical and pesticide residues in fruits and vegetables, GMOs, sanitation and cleaning, food safety systems, standards development and harmonization, aflatoxins management among many other topics.

More information is avialble on the events website: www.

FoodSafetySummitAfrica.com Food Business Africa | dec 2014/Jan 2015

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INTERNATIONAL Insights M&A

INNOVATIONS

Olam acquires ADM’s cocoa business

Dannon introduces Triple Zero yoghurt

SINGAPORE - Olam International, a leading agri-business has acquired the global cocoa business of Archer Daniels Midland Company (ADM).

The deal, valued at US$1.3 billion, pushes Olam to the top ranks of the cocoa business globally, alongside Barry Callebaut of Switzerland and Cargill of the US. The firm aims to use the acquisition to meet rising demand from emerging economies in cocoa based products.

The transaction has provided Olam with a platform of big brands from ADM, including deZaan, Joanes and UNICAO brands, and with a strong franchise of more than 2,150 customers globally Olam’s Co-Founder, Group MD and CEO, Sunny Verghese said: “With cocoa being a prioritised platform for investment, this proposed acquisition represents a transformational opportunity for Olam Cocoa to become an integrated global leader in a market with attractive growth prospects.”

ADM’s worldwide cocoa business (ADM Cocoa) comprises cocoa processing assets made up of 8 factories with total capacity of 600,000 MT. The combined capacity will be approximately 700,000 MT with processing facilities in the Netherlands, Germany, Brazil, Singapore, Ghana, Côte d’Ivoire and Canada to add to Olam Cocoa’s existing capacity Olam was established in Nigeria by the Kewalram Chanrai Group in 1989 currently operates across the agriculture value chain in 65 countries and is one of the top three traders of coffee and rice worldwide. Currently headquartered in Singapore, a unit of Singapore’s stateowned investment company Temasek Holdings Pte has 80% shareholding in the company.

The transaction is subject to conditions including the necessary regulatory approvals and clearances.

It is expected to close June 2015.

US – Dannon, the US subsidiary of Danone has introduced a ‘first-of-its-kind’ yogurt protein snack with a strong nutritional profile. The product, named Triple Zero, has 0 fat, 0 added sugar, and 0 artificial sweeteners – plus 15g of protein per 150g pack.

The Dannon Oikos Triple Zero pack of high protein with zero added sugar, zero artificial sweeteners and zero fat is a unique formulation that fits in well with those looking for a healthy snack.

The product has been sweetened with Stevia, a zero–calorie sweetener and sugar substitute sourced from the stevia rebaudiana leaf.

It is available in six delicious protein-packed flavors – Vanilla, Coconut Crème, Strawberry, Banana Crème, Mixed Berry and Peach!

COMMODITES

World sugar prices to remain low, under pressure in 2015 - Rabobank

WORLD - World sugar prices are set to remain low in 2015, with abundant global sugar stocks continuing to weigh on world market prices.

According to Rabobank’s Sugar Quarterly Q4, although prices have been under pressure for some time, projections suggest that world production in 2014/15 will be little different from the previous year.

This is due to the fact that even with low prices, it has been difficult for farm4

dec 2014/Jan 2015 | Food Business Africa

ers to switch to other alternative crops, and low commodity prices worldwide.

Developments in oil prices over the last three months have emerged as a new potential driver of prices in 2015.

“80% of global sugar production today comes from cane. Cane is a semi-perennial crop, meaning that if farmers do not like the current cane price, it nevertheless takes them time to switch land out of cane into other crops. Another reason is the diminishing incentive to switch to other crops, given that the prices of many other agricultural commodities are also falling along with sugar prices” explained Rabobank’s Andy Duff.

The principal driver of price developments has been the continued weight of global sugar stocks on the market, currently predicted to diminish only modestly over 2015, according to Rabobank.

Raw sugar retreated more than 50 percent from a 30-year high in 2011 as world supplies consistently surpassed demand. Global output will lag behind

consumption by about 500,000 tons in 2014-2015 as production stabilizes, London-based Czarnikow was quoted by Bloomberg.

“We are likely to see the market swing back into deficit, mainly because of a reduced production in Center-South Brazil and Thailand and increasing global consumption,” Tom McNeill, director at Green Pool Commodity Specialists, a Brisbane-based researcher told Bloomberg.

In terms of production, the European Union is forecasted to grow volumes by 12% to reach 18.6 million tonnes raw for the 2014/15 year and India is set to increase their production to 25.5 million tonnes, as a result of increased planting, and favourable monsoon rains.

Brazil is estimated to harvest between 550 million to 580 million tonnes, with China and Thailand expected to have reduced yields, with both countries harvesting 12% less cane than last year.

foodbusinessafrica.com

INTERNATIONAL Insights

MARKETS

Food processing, retail to grow aggressively in GCC Countries - Frost & Sullivan

UAE - Increased focus on reduction of food imports by Gulf Cooperation Council (GCC) countries and a rising young

population are driving the prospects for food processing and retail in the region.

According to a recent report by Frost & Sullivan, the food processing market is set to boom in the region, growing 8.5% annually to 2018, creating opportunities for allied industries like processing machinery, packaging and logistics..

“With an increased focus on local food processing so as to decrease dependency on imports and increase value to cost, the food processing industry in the GCC is set for high growth. Also, about 54 per cent of the population in the GCC is under the age of 25, making the region a potentially favourable market for products such as biscuits, snacks, and confectionery items”, according to Aparajith Balan, Program Manager, Chemicals and Foods Practice, Middle East and North Africa, Frost & Sullivan, The report notes that 70 per cent of food products in the GCC are imported of which cereals comprise around 55 per cent of total food imports.

As per Frost & Sullivan, the GCC packaged food industry was valued at US$ 25 billion in 2013 and is projected to increase at a compound annual growth rate (CAGR) of 8.5 per cent till 2018.

Bakery products have the highest value in the region, contributing up to 30 per cent of the total packed products market, followed by dairy at 25 per cent.

The top players in the GCC packaged food market are Almarai Co. Ltd. with around 9 per cent market share, followed

by Nestle Saudi Arabia at 5 per cent and Danone Group at 4 per cent, according to the report.

Food retailing is also thriving in the GCC due to exposure to global markets and is estimated to be worth US$ 155 billion by 2018, the report states.

The Gulf Cooperation Council countries include Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain, and Oman.

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Food Business Africa | dec 2014/Jan 2015

5

INTERNATIONAL Insights SAFETY

M&A

BRC publishes seventh issue of global food safety standards

SIG Combibloc Group acquired

by Onex for $4.7 billion

UK - The British Retail Consortium has released its latest issue of its global food safety standards.

Published every year, by the British Retail Consortium (BRC), considered the lead trade association for the retail industry in the UK, the BRC Global Standard for Food Safety, has become an accepted benchmark worldwide and is widely utilized by market leaders, a measurement for good manufacturing practices (GMPs) in all things related to food safety.

Though there is still continued emphasis on Hazard Analysis and Critical Control Points (HACCP)-based programs, as well as management support and commitment, issue seven is focused on

maintaining consistency within the audit process, while providing site-specific flexibility in order to reduce the audit burden; reducing fraud by encouraging plants to develop and incorporate protective systems; promoting ever greater traceability and transparency in the global food-supply chain; encouraging BRC Standard adoption as a means by which small facilities can improve food safety while developing their own processes; and urging increased emphasis on those areas which most often result in recalls and withdrawals, such as mislabeling associated with allergen management.

Audits incorporating Issue Seven’s standards will begin in July 2015.

SWITZERLAND - Private equity firm Onex Corporation has acquired packaging producer SIG Combibloc Group AG (“SIG”) in a deal up to $4.7 billion.

SIG is the second largest provider of aseptic carton packaging globally. Based in Switzerland, SIG provides beverage and food producers with aseptic carton sleeves and closures, as well as filling machines. The company operates seven production facilities in Europe, South America and Asia Pacific. SIG has 5,200 employees serving a mix of leading multinational and regional customers in more than 40 countries worldwide. The transaction is anticipated to close in the first quarter of 2015, subject to customary conditions and regulatory approvals.

INVESTMENT

Mahindra Agribusiness to enter the dairy sector as private equity interest heats up INDIA - Mahindra Agribusiness plans to acquire a dairy for up to Rs 5 billion (about US$ 80 million), eyeing a slice of the Rs 3 trillion (US$ 48 billion) dairy market in the country, reports the Economic Times of India.

The dairy sector in India, quite disorganised, is the world’s top consumer and producer of milk, has been on the radar of companies and private equity investors.

“With over 80% of the market under unorganised sector, the company sees a huge business potential in the segment.

It will not be just a pilot project. Dairy will be a key growth sector,” Mahindra’s chief executive of agri and allied business Ashok Sharma told the Times.

“We wish to seal the deal in the current financial year,” he said. The company may retain the acquired brand, he added. “The company will launch its own brand only if required.”

Apart from corporate interest, private equity deals of at least $1 billion are expected in the current year and next, Rabo Equity Advisors chairman Rajesh Srivastava told the Times.

“Private equity (PE) investments are rising steadily in agri and food sectors,” Srivastava told ET. Along with dairy, processed food and food services have been the most attractive sectors for PEs. “Last few years have seen between 25 to 30 deals valued at $250 million to 650 million. The largest numbers of deals have been in processed foods followed by food services, which should be the case in the next two years as well,” said Srivastava. “Dairy is one of the most sought after sectors but not the only one for sure”. – Economic Times

INNOVATION

Coca-Cola joins the dairy industry with milk brand US – Coca-Cola, the world’s leading soft drinks maker plans to venture into the dairy category by launching a high end lactose free milk brand in the US early this year.

The milk brand, named Fairlife is will cost twice as much as regular milk and will have 50% more protein and 30% less sugar. It will also be lactose free.

“We’re going to be investing in the milk business for a while to build the brand, so it won’t rain money in the early couple of years. But like Simply [Coke’s premium fruit juice line], when you do it well, it rains money later,” Sandy Douglas, Coke’s Senior Vice President and Global Chief Customer Officer and President Coca Cola North- America told 6

dec 2014/Jan 2015 | Food Business Africa

a conference The U.S. milk industry remains highly fragmented and with declining consumption, down from 260 pounds in 1975 to below 200 pounds per capita currently, according

to the USDA, Coke is relying on its marketing prowess to make some good money from this venture Fairlife is the product of a joint venture formed by Coca-Cola and dairy co-operative Select Milk Producers in 2012. Coke saw the partnership as an opportunity to develop “higher quality value-added health and wellness beverages.”

Fairlife is made through “a proprietary milk filtering process that allows you to increase protein by 50%, take sugar down by 30%, and have no lactose”, according to Douglas.

foodbusinessafrica.com

briefsbriefs Africa international

The Coca-Cola Company plans to reduce its workforce by 1,600-1,800 jobs globally as part of a US$3bn cost-cutting programme Following concerns that they mislead consumers, authorities in Hong Kong propose banning the use of nutritional claims on infant formula products.

Netherlands bans food products advertising to kids below 12 years, which is an extension of a code of practise pioneered by the food industry association Dutch Food Industry Federation, but which will now apply to all food manufacturers Brazilian juice maker Cutrale and investment firm Safra Group successfully complete the acquisition of fresh fruit producer Chiquita Brands International, after shareholders rejected the deal with the Fyffes group that would have created the world’s largest banana supplier, with $4.6bn in annual revenues Beer producer Carlsberg reveals that it could close some of its breweries in Russia, following suspended production at four of Russian plants following the economic crisis in the country Dairy giant Danone acquires an additional 21.75% shareholding in Centrale Laitière (Morocco) from SNI for an amount of €278 million. The transaction raised Danone’s equity stake in Centrale Laitière to 90.86%.

In a deal worth US$9.9m, Israeli flavour house Frutarom acquires Slovenian company Vitiva, who are specialized in R&D, production and distribution of specialty natural extracts from plants.

INVESTMENTS

Amul to invest Rs. 50 billion in expansion to grow capacity INDIA - The Gujarat Cooperative Milk Marketing Federation (GCMMF), which markets the popular Amul brand of milk and dairy products, has drawn up a plan to invest at least Rs 50 billion to expand production capacities by more than a third over the next 2-3 years.

The dairy giant, growing at around 24% annually, expects to maintain the growth rate on the expanded capacities as well to cross Rs 500 billion sales by 2020 from Rs 220 billion crore this year, said managing director RS Sodhi.

Sodhi said the decision to augment capacities was aimed at meeting the growing demand for its products, both in the domestic and global markets.

The world’s fastest-growing dairy organisation, currently ranking 15th globally, will increase capacity to 32 million litres a day from around 23 million litres today. The demand for milk and milk products in India, the world’s largest milk market with 140 million tonnes, is currently growing at healthy double digits, Sodhi said.

The company will expand existing facilities in and around Gujarat and also set up 8-9 new plants across the country. It currently has more than 50 dairy plants – Economic Times

Giving new life to fruit...

Nestlé sells its ice-cream business in Mexico to Grupo Herdez,, in a deal worth US$69m

Suppliers of: h Fruit concentrates & pulps h Blends & compounds h Technical assistance

PepsiCo opens a new manufacturing factory in Saudi Arabia, as the company looks to expand its presence in the Middle East.

h Clear fruit juice concentrates & NFC h Canned fruit h Fruit sweets h Citrus cells

Dutch ingredients company DSM appoints Ilona Haaijer as President and CEO of DSM Food Specialties, one of the five divisions of Royal DSM NV

h Dried fruits h Citrus oils

Unilever acquires Minneapolis Minnesota, US-based gelato producer Talenti Gelato & Sorbetto for an undisclosed sum Coca-Cola Beverages Pakistan to invest US$300m to set up three bottling plants in Multan, Islamabad and Karachi Hindustan Coca-Cola Beverages, India, reveals plans to build a new Rupees 10bn soft drinks facility in Karnataka state.

Factory Locations: • Paarl: Western Cape • Malelane: Mpumalanga • Hoedspruit: Limpopo • Kirkwood: Eastern Cape • Citrusdal: Western Cape • Nelspruit: Mpumalanga

Enquiries: Tel: +27 (0)13 790 3015 • Cell: 27 79 577 8941 email: sales@capefruits.co.za • website: www.capefruits.co.za CapeFruitA4-2014.indd 1

foodbusinessafrica.com

2014/09/03 9:33 PM

Food Business Africa | dec 2014/Jan 2015

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Africa Insights M&A

INVESTMENT

Coke partners SABMiller to create African beverage bottling giant

Uganda opens ultramodern chicken farm and processing facility

AFRICA – Competition in the bottled water category is expected to lessen as South African brewing giant SABMiller has combined with The Coca-Cola Company to bottle and distribute its beverage brands in southern and eastern Africa, in a move expected to create the region’s biggest soft beverages bottler.

The new bottler, Coca-Cola Beverages Africa, enables SABMiller and the Gutsche Family Investments (GFI, majority shareholders in Coca-Cola Sabco) to combine their bottling operations of their non-alcoholic ready-to-drink beverages businesses in Southern and East Africa. It will serve 12 high-growth countries accounting for about 40 per cent of all Coca-Cola beverage volumes in Africa.

With more than 30 bottling plants and over 14,000 employees, Coca-Cola Beverages Africa will be the largest Coca-Cola bottler in Africa.

On full completion of the proposed merger, Coca-Cola Beverages Africa will be majority owned by SABMiller (57.0%), with GFI taking 31.7% and The Coca-Cola Company having 11.3%.

“A combined Coca-Cola bottling operation is further evidence of our commitment to Africa, and our firm belief in the tremendous growth prospects that the continent offers,” said Muhtar Kent, Chairman and CEO of The Coca-Cola Company.

“Soft drinks are an important element of our growth strategy. This transaction increases our exposure to the total beverage market in Africa. The opportunity is significant, 8

dec 2014/Jan 2015 | Food Business Africa

with favourable demographics and economic development pointing to excellent growth prospects,” said Alan Clark, SABMiller Chief Executive. “This also signifies a strengthening of our strategic relationship with The Coca-Cola Company.”

The merger brings SABMiller and Coca-Cola together after a number of years of direct competition with each other in the region. SABMiller has over the last few years acquired a number of leading water companies in the region, including leading player Keringet in Kenya and Ruwenzori in Uganda, which competed aggressively with Dasani, Coke’s flagship bottled water brand. The deal brings these competing brands under one roof, putting an end to this competition.

Coca-Cola Beverages Africa will initially produce and distribute Coca-Cola beverages in nine countries: South Africa, Kenya, Ethiopia, Mozambique, Tanzania, Uganda, Namibia, Comoros and Mayotte, with Swaziland, Zambia and Botswana expected to be added at a later date after approvals from shareholders.

As part of the deal, Coke will also acquire SABMiller’s Appletiser brands on a worldwide basis, and acquire or be licensed rights to a further 19 non-alcoholic ready-todrink brands in Africa and in Latin America, for an approximate cash consideration of US$260m. SABMiller will retain ownership of its non-alcoholic malt beverages.

Phil Gutsche will be Chairman of Coca-Cola Beverages Africa which will be headquartered in Port Elizabeth, South Africa.

UGANDA - The meat industry has a received a major boost when a new ultra-modern broiler farm and chicken-processing facility was opened in the Central Uganda district of Luweero.

Rafik Manji, the company’s Managing Director said Hudani Holdings is responding to the demand for chicken protein which is on the rise in Uganda especially among the growing middle-class, whose lifestyles are changing to appreciate white–meat based diets.

Manji explained that the farm intends to focus on filling this supply gap with a fresh approach to poultry, through consistent production and assured product availability.

The farm consists of a four metric tonne feed-mill, four 25,000 capacity broiler houses, two-newly commissioned environmentally controlled and automated broiler houses with a capacity of 40,000 birds each and a 15,000 square metre abattoir as part of an integrated agri-business venture.

The farm’s processing facility is also the first highly mechanized abattoir in Uganda and the largest chicken processing facility in East Africa, according to the company. The farm’s abattoir processes about 2,500 birds per hour and 220,000 birds per week. The current capacity is 260,000 birds per eightweek cycle.

Already the farm is supplying Kentucky Fried Chicken, a global fast food franchise which recently opened in Kampala as well as Fresh Cuts, a leading food processor in Uganda – The Independent

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Africa Insights

PEOPLE

Danone creates Africa division, appoints regional head

AFRICA - French dairy and food company Danone has created an African division and appointed a new vice president to head the region, as the company moves to consolidate its recent investments in the continent.

Pierre-André Térisse, who has been the company’s Chief Finance Officer since 2008, has been appointed Executive Vice

foodbusinessafrica.com

President of the new Africa division.

The company has invested heavily in the continent in the last two years and has consolidated existing positions and entered new markets on the continent, generating revenues of €1.2 billion, according to a statement by the company.

The company, which has had strong presence in Africa through diverse investments in Southern and Northern Africa, has upped its investments in the continent since 2013. In 2013, the company, together with the Abraaj Group bought Fan Milk International, a Danish firm, that began in Ghana and grew into the western African countries of Nigeria, Togo, Benin, Ivory

Coast, Liberia and Burkina Faso with its ice cream, juices, frozen yoghurt and flavoured milk products.

Last year, the company bought a 40% interest in Eastern and Central Africa’s biggest dairy concern Brookside. It remains to be seen how the company intends to use its shareholding in Brookside to grow further into Kenya, Uganda, Ethiopia, Tanzania and probably Zambia and Malawi and other countries in the region.

The company also raised equity stake in Centrale Laitière of Morocco to 90.86% at the end of last year.

According to the statement, the company “has set up this new multi-business structure to accelerate expansion in this strategic region”.

Against this backdrop, Danone will continue to expand capacity rapidly and build development platforms in fast-growing regions, particularly Asia and Africa, the statement adds.

Food Business Africa | dec 2014/Jan 2015

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Africa Insights PRODUCTION

Zambia’s Illovo unit breaks sugar production record ZAMBIA - Illovo Sugar’s Zambian unit has said it had posted record production of 424,024 tonnes during the milling season ending December 2014.

“This is the highest tonnage produced by a single sugar factory on the African continent in any given season,” said Zambia Sugar’s acting MD, Rebecca Katowa, referring to the company’s Nakambala complex in south-western Zambia.

Zambia Sugar which is listed in Lusaka is 76.4% held by Illovo, which in turn is a subsidiary of London-based Associated British Foods. Thanks

to an expansion project at Nakambala, completed in 2009, Zambia Sugar is Illovo’s second-biggest contributor to profit after Malawi.

An expansion project finished in 2009 boosted Zambia Sugar’s milling capacity from 240,000 tonnes a year to 450,000 tonnes.

It also expects record sugar production in Mozambique.

Illovo MD Gavin Dalgleish said last month his company planned to build an alcohol distillery in Zambia as part of its long-term strategy to generate 20% of operating profit from downstream sources. It was awaiting board ap-

proval for the project.

Illovo recently commissioned a distillery in Tanzania, which Mr Dalgleish said was operating at its full capacity of 14-million litres thanks to strong demand for potable alcohol across East Africa.

Ms Katowa said in the season ended December, Zambia Sugar crushed a record 3.417-million tonnes of sugar cane.

According to Mr Dalgleish, Illovo plans to start redirecting a large portion of its European exports to regional African markets, due to removals of production quotas in Europe “We are having a real look at our various routes to market, and we’re looking at developing prepacked brands in largely direct consumer markets. So we’ve already got a lot of activities under way to reposition under the new EU reality.” he said. – BD Live

M&A

Abraaj Group exits leading Tunisian baked goods manufacturer TUNISIA - The Abraaj Group has announced the successful full exit of its investment, through one of its Funds in Moulin d’Or, a leading producer of baked goods in Tunisia.

Founded in 1990 as a small bakery specializing in packaged bread, Moulin d’Or’s product range now includes a variety of packaged cakes, baked snacks and packaged bread. The Company has grown to become a leader in its industry, contributing 47 per cent market share in the cake segment in

Tunisia.

The Abraaj Group invested in Moulin d’Or in 2012. The Group’s close operational and financial support has enabled the expansion of the Company’s regional footprint, namely through the creation of a joint venture in Algeria and the increase of exports to Libya, where the business has now successfully developed a significant presence in addition to its market-leading position in Tunisia.

M&A

Nigerian Breweries, Consolidated Breweries gets final approval NIGERIA - Nigerian Breweries has confirmed that its merger with Consolidated Breweries plc has now been finalised with effect from December 31, 2014.

According to a company statement signed by Nicolaas Vervelde, the managing director/CEO of Nigerian Breweries the name of the enlarged company arising from the merger will be ‘Nigerian Breweries Plc’ and the company will remain quoted on the Nigerian stock exchange.

With the merger, the combined company expects to hit the 70% market share in the highly competitive Nigerian beer market.

Nigerian Breweries, majority owned by 10

dec 2014/Jan 2015 | Food Business Africa

Heineken, has grown turnover consistently from N164.21 billion in 2009 to a peak of N268.61 billion in 2013. It is expected to maintain the continuing growth trend in sales revenue in 2014.

The company maintains a leading net profit margin in the breweries sector at 16 per cent in 2013.

Consolidated Breweries, which is also majority owned by Heineken, emerged from the merger of Continental Breweries Limited and Eastern Breweries Limited in 1982, has also achieved a continuing growth in

sales revenue in the past five years, with sales revenue improving every year from N20.21 billion in 2009 to N33.91 billion at the end of 2013.

The company alcoholic and non-alcoholic beverages include ’33’ Export Lager Beer, Turbo King Dark Ale, Williams Dark Ale, HiMalt and Maltex Malt.

With the conclusion of the merger, the enlarged Nigerian Breweries is now enabled to fully capitalise on the opportunities of the Nigerian beer and malt drinks market and create significant value through delivery of broader product offering, operational efficiencies and access to new markets.

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Africa Insights

MARKETS

ECONOMY

Oceana keen to feed African fish demand

SOUTH AFRICA - Fishing conglomerate Oceana is looking to cast the nets of its highly profitable canned fish business into African markets.

Tiger Brands-controlled Oceana owns the best-selling Lucky Star canned Pilchard brand, which provides more than 3-million meals a day as the protein staple in local households.

Writing in the company’s annual report, CEO Francois Kuttel said that after the continual growth experienced over previous years by canned fish operations, there were signs of a flattening in conventional growth opportunities in the domestic South African market.

But he said Oceana saw significant potential for growth in sales volumes in southern and East African markets, where the per

capita consumption of canned fish is substantially lower than in SA. “In these markets, we will be seeking an increase in sales volume through a low-risk strategy that focuses primarily on identifying and securing the route to market.”

But Oceana struggled to land acceptable profits from African markets in the year to end-September with Mr Kuttel noting several setbacks in the first half.

Mr Kuttel said West African markets were highly commoditised and were already large canned fish markets and “we reached the conclusion that it was not economically viable to compete with existing players in those markets in the medium term,” but the company was committed to expanding into southern and East African markets The canned fish and fishmeal division is Oceana’s largest contributor, accounting for more than 60% of revenue. In the year to September the canned fish and fishmeal division pushed revenue up 17% to R3.1bn, with operating profit jumping 77% to R381m. - BD Live

INVESTMENT

New brewery Raya Brewery enters Ethiopian market ETHIOPIA - Raya Brewery S.C. is to start testing its factory in 15 days to begin production of beer before the end of the December.

The Raya Brewery, located near Maichew Town, 667km north of Addis Ababa, began construction in 2013.

The company acquired the Bedele and Harar breweries in 2011 for 163.4 million dollars and has constructed a new factory,

near Kilinto in AkakiKaliti District, where it has been producing its new and popular Walia brand since September, 2014.

Raya has its eye on the growing demand and dominance in the northern market, according to Yemane Kidane, a shareholder in the company. Raya’s production capacity is 600,000 hectolitres (about 180 million bottles of beer annually). – Addis Fortune

Africa economy to grow 50% by 2019 on demand jump, Deloitte says AFRICA - Africa’s gross domestic product may expand by 50 percent to $3.7 trillion by 2019, boosted by an emerging middle class and increased household demand, according to Deloitte.

“Rising consumer demand, aligned with annual growth of around 8 percent is likely to add around $1.1 trillion to African GDP by 2019, with Ethiopia, Uganda and Mozambique among the fastest expanding markets,” the auditing company said in an e-mailed report.

While growth in demand for consumer products, including luxury items and smartphones offered opportunities, different regulations in individual markets were hurdles to set up businesses and companies need long-term strategies for investment in Africa, Deloitte said.

“Where there are challenges, there are also opportunities to innovate,” it said. “Given the potential for growth the continent offers, the business opportunities in Africa could outweigh the risks.”

Mobile-phone penetration is set to rise to 97 percent by 2017 from 72 percent, with about 334 million smartphone subscribers, the company said.

RETAIL

Debonairs to partner Shoprite in Angola ANGOLA - Famous Brands, owners of the Steers and Debonnairs Pizza fast food chains, will open seven Debonairs Pizza restaurants in Angola next year, making the fast-growing oil economy its 14th operation on the continent outside of its home market.

The pizza outlets, starting at the coastal city of Benguela, will be opened in shopping centres aligned to food retailer Shoprite, the company said.

“There’s a natural alignment with Debonairs Pizza and

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the Hungry Lion brand,” said Darren Hele, the Chief Executive of Famous Brands’ food service.

The fast-food chain’s expansion in the Southern Africa nation will mirror that of Shoprite, which has been on the ground for 11 years. “The seven stores will be a balance of new Shoprite centres and existing ones,” said Mr Hele.

Famous Brands has “been seriously” exploring its options to enter Angola for at least the last three years, said Mr Hele.

Shoprite will have the management responsibilities as a master franchisee in Angola.

“We’re exploring similar growth opportunities with Shoprite in other countries on the continent,” said Mr Hele.

Famous Brands operates in 13 countries on its own, while Shoprite has been operating a network of stores outside SA, now numbering 290, for the past 17 years. The grocer operates 33 stores in Angola, as well as 34 stores in Zambia and 10 in Nigeria. – BD Live

Food Business Africa | dec 2014/Jan 2015

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Africa Insights

briefs Africa

Egyptian snack maker Edita plans $200 million stock market listing EGYPT - Egyptian cake and biscuit maker Edita Food Industries plans to list its shares on the Egyptian stock exchange early next year, tapping into a revival of investor interest in the Cairo bourse.

The initial public offering (IPO) could value the food company at around 1.5 billion Egyptian pounds ($209.79 million), industry sources said. The IPO is planned for the first quarter of 2015.

The Edita IPO is part of a flurry of mergers and rights issues that has boosted activity on the Cairo exchange. – Reuters

Natfoods COO appointed CEO ZIMBABWE - Listed grains processor National Foods Holdings Limited (Natfoods) has appointed its chief operating officer (COO) Michael Lashbrook as chief executive.

His appointment, effective from January 1, 2015, follows the resignation of Jeremy Brooke last October.

Clover, Dairybelle merger approved SOUTH AFRICA - The Competition Tribunal has approved a merger between Clover and DairyBelle’s yoghurt/UHT milk business.

However, the tribunal ordered on that Clover must continue to supply Danone Southern Africa with secondary distribution services until June 2015 and both parties were ordered not to retrench any of their employees for three years from the merger approval date, the tribunal said in a statement.

Nigerian Breweries introduces ready to drink product to market NIGERIA – Leading Nigerian brewing company Nigerian Breweries has launched its ready-to-drink sparkling alcoholic beverage in Nigeria.

Christened ACE, the drink is focused on young aspiring and daring youths who want to live the good life within their means, according to the Marketing Director, Nigerian Breweries, Mr. Walter Drenth.

The product has 5.5% alcohol by volume and and is available in 330 ml bottle.

INVESTMENT

Zambeef to process edible oil

ZAMBIA - Zampalm, a subsidiary of Zambeef Products Plc, is expected to process its first palm into edible oils in 2015.

The development is also expected to transform the outlook of Zambia’s edible oil industry, which has been relying on palm oil and processed cooking oil imports.

Zambeef Products Plc joint chief executive officer Carl Irwin said in an interview

Delta’s Gowero appointed to Nampak board

Guinness’ Meta Abo brewery launches new beer

ZIMBABWE - Delta Corporation (Delta)’s chief executive Pearson Gowero has been appointed to Nampak Zimbabwe Limited (Nampak Zim) board following the merger of Hunyani, CarnaudMetalbox and MegaPak. This comes as South Africa-based packaging group Nampak Holdings (Nampak) wholly-acquired the Zimbabwe Stock Exchange-listed Hunyani and merged it with two other local units in a share swap deal.

Nampak’s group finance director Alan Harvey Howie has also been appointed to the board.

ETHIOPIA - Meta Abo Brewery S.C., a Diageo subsidiary has lauched a new lager beer in the Ethiopian market.

Zemen Lager Beer is “a refreshing, superior quality light beer with an alcohol by volume (ABV) of 4.5%”. It is available in 330 ml bottle.

Meta Abo Brewery Managing Director, Francis Agbonlahor said, “Meta continuously pushes the boundaries to develop innovations that meet consumer preference and demand”.

Diageo acquired Meta Abo Brewery S.C., in January 2012. Meta was formerly a stateowned Beer factory located in Sebeta near Addis Abeba

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dec 2014/Jan 2015 | Food Business Africa

that the company has since started erecting a mill that will crush the palm at the Mpika-based company.

The over US$20 million investment becomes the first commercial palm project in Zambia, which will remove Zambia from being an importer of edible oil to a producer.

“Zampalm will in 2015 crush its first palm from the 2010 flagship plantation and the palm will become Zambia’s first commercial project,” he said.

He added that the first crop will be harvested on 980 hectares with the next crop expected to be harvested on 1,300 hectares.

The country is expected to save over US$50 million a year in foreign exchange expenditure once the company begins to process the commodity, according to the company

The only technical food & beverage industry magazine in subSahara Africa, outside of South Africa Provides well researched industry information and analysis written by professionals in the sector Read by key decision makers with direct responsibility for purchasing of equipment, ingredients, chemicals, packaging and other services Focused solely on the food and beverage sector in sub-Sahara Africa, like no other magazine Available in both print and as an e-reader that is available online, a first in the region

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PEOPLE

New boss at New KCC has his work cut out as Langat leaves KENYA - Mr Nixon Sigey has been appointed as the new Managing Director of New KCC, one of the leading dairies in Kenya.

The appointment of Sigey, effective January 1st 2015, through a gazette notice by the Cabinet Secretary of Industrialisation, Adan Mohammed, brought an end the term of former boss Kipkirui Langat three months ahead of an extended contract. The Cabinet Secretary had previously extended Langat’s term of office for an extra year, at the end of his three year contract with the firm, in March last year.

“I appoint Nixon Kipkemoi Sigey to be the managing director of the New Kenya Co-operative Creameries Ltd, for a period of three (3) years with effect from January 1, 2015,” said Mr Mohamed in the the Kenya Gazette.

“The appointment of Dr Kipkirui Lang’at is revoked with effect from January 1, 2015.”

Sigey takes over at a time when the market has changed dramatically from the time Dr Langat took over New KCC in March 2011.

The issue of privatisation, talked about by successive Governments, but never implemented, is one key deliverable for the incoming CEO, according to the Chairman of New KCC, Matu Wamae.

“The privatisation of New KCC is set to provide financial resources that will be ploughed back into the firm and used to increase the production of dairy products across the value chain. As you take this high office, you will be expected to guide the process,” Mr Wamae stated during Sigey’s incoming reception in Nairobi.

New KCC started off as a farmers’ cooperative in the 1920s.

A plan by the Privatisation Commission proposes giving farmers a major stake after privatisation with a 42% shareholding, employees 4%, while 42% floated at the Nairobi Securities Exchange and the government retaining a 20% stake. However, farmers want an 80% stake.

The Danone effect

Privatisation aside, Mr Sigey takes over at a critical time in the dairy industry in Kenya with the recent acquisition of a 40% stake in Brookside by the French dairy and food giant Danone.

With Brookside having grown and overtaken New KCC in a short 20 years of existence, the former giant’s management will have to craft new ways to use its huge asset base around the country to up its game in the dairy sector. With the Danone entry into Brookside, it is expected that Brookside’s regional growth plans shall be given a priority, and in the local market, the recently unveiled milk powder plant and factory expansion will give the rest of the sector, New KCC included, competition in milk sourcing and for the consumer is expected to rise in the next few years. Mr Sigey will not only have to fight for milk from farmers with the Brookside-Danone team but also fight for the consumers in Kenya and the region.

It is important that Mr Sigey handles the said privatisation process well for this remains the most viable option for New KCC to remain relevant in the local and regional market going forward. foodbusinessafrica.com

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• Networking with industry peers, Government and industry leaders from across the food supply chain and the region • Learn the latest food safety focused innovations, technologies and practices that will boost the industry and consumer health • Grab business opportunities in the region, not only in food safety arena, but also learn the opportunities in regional and international trade • Understand the basics of food safety and standards regulation in the region that are vital in your day-to-day business

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nutrition & health whole grains

The whole grain advantage

T

he term whole grain refers to unrefined cereal kernels that still contain the bran, germ and endosperm. The kernels don’t necessarily have to be intact (as in brown rice for example), they may have been cracked, cut or broken and the edible layers may have been separated, for example through the grinding process to make flour, but they must be present in their natural proportions.

Refined grains on the contrary, are processed and milled until only the starchy endosperm is retained. This gives the grains finer texture, and an ‘easier’ and finer taste than the full flavour of whole grains. Most importantly, this process considerably extends the shelf life of the flour, while wholemeal flour is more subject to nutrient degradation. A major drawback is that a lot of nutrients and almost all of the fiber are lost in the process.

Enriched grains are refined grains fortified with some of the nutrients that were lost in the milling process, for example B vitamins or iron, but not fiber.

Spoilt for choice Some of the most common grains in the East African region are wheat, rye, oats, barley, maize, hominy, millet, sorghum and amaranth. Other whole grains that many consumers and producers in the region are yet to discover are brown rice, wild rice, bulgur, kamut, kasha, quinoa,

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urban areas, refined products such as white bread, white rice and white flour have in recent years become almost a sign of wealth, very similar to the 19th century industrial age when white bread was a privilege of the upper classes in Europe. Countries in the West, however, are seeing a very conscious return to whole grain products, powered by dietary guidelines encouraging a higher intake of whole grains and health campaigns in favour of unprocessed and unrefined foods. Unfortunately, wholegrain products are often far less available and can even be more expensive than their refined counterparts, especially in urban settings. faro, teff, triticale, wholewheat couscous and buckwheat. Spelt (especially spelt bread and spelt pasta) is currently all the rage in many European countries since it has a much higher nutritional value than whole wheat. Another new favourite in the culinary world and especially popular with dieters is freekeh: young, green cracked wheat with a rich, smoky flavour.

Full of health benefits Grains in general, and especially whole grains, form an essential component of a healthy diet. They provide complex carbohydrates as well as protein, phytochemicals, vitamins and important minerals, and are naturally low in fat.

Whole grains take considerably longer to digest than their refined counterparts and may help in weight management. The fiber-rich bran in whole grains can do wonders for the digestive system. Many, though not all, whole grain products are good sources of fiber. The consumption of whole grains reduces the risk of type 2 diabetes and lowers total cholesterol and lower LDL (=bad) cholesterol. Whole grains are also linked to a lower risk of cardiovascular disease and some cancers such as colorectal cancer. According to Harvard University, whole grains should fill up at least a quarter of our plate.

Wealth over health In the African region and especially in

Processors take note Food manufacturers can jump on the bandwagon by reformulating existing products. It can be as simple as adding wholemeal flour or other grains such as oats and spelt to products using mainly refined wheat flour. To ease consumer acceptance, manufacturers can choose whole grains that are naturally light in colour. There is even an albino variety of wheat with a flavour that is more similar to that of a refined grain while providing – almost – the same nutritional value of whole grain. New processing techniques can also help to make wholegrain flour look and taste more like white flour.

Legislation For prepacked foods, the use of whole grains should be indicated in the ingredient list. The informed consumer will be on the lookout for terms like ‘whole’ on the product label and will also want to see the specific whole grains appear at the top of the ingredient list. Nonetheless, regulations vary in different countries and the term whole grain does not always mean that 100% of the cereal kernel was retained. In Kenya, for example, bread can be sold with the label ‘wholemeal’ even if part of the flour used contains only 60% wholemeal wheat.

In the US, on the contrary, consumers can trust in the Whole Grain Council’s ‘100% Whole Grain’ stamp which guarantees all of the grain was retained foodbusinessafrica.com

PACKAGING Glass

GLASS: The ultimate package

E

arlier on in time, man fashioned containers from natural materials such as woven reeds, animal organs and hollowed logs. Food packaging descended from these primitive forms of containment to paper and paperboard (the oldest form of flexible packaging) and soon after to the most sustainable form of packaging yet, glass.

Although glass-making began in 7000 B.C. as an offshoot of pottery, it was first industrialized in Egypt in 1500 B.C. Often optically transparent; it is an amorphous “inorganic” product of fusion that has cooled to a rigid state without crystallizing.

To put into perspective the fame of glass in Africa - In South Africa alone, glass is consumed in excess of 3.1 million tons a year of which two thirds is recyclable. The two main types of glass containers used in food packaging today are bottles and jars with a wide opening, with plastic or metal closures. Glass closures were once used but are not common today.

In Africa, a wide range of food manufactured both here and elsewhere for our market, is packed in glass containers. Examples are as follows: instant coffee, sugar preserves (jams and marmalades), spices, mineral water, baby food, dairy products such as milk powder, syrups, processed fruits and condiments. Glass bottles are widely used for beers, wines, spirits, liqueurs and soft drinks.

Despite the higher cost, glass still remains a popular choice of food packaging in the world. This could be attributed to the fact that the glass package has a modern profile with distinct advantages which include: Consumer acceptability – Consumer research has consistently proven that consumers attach a high quality perception to glass packaged products and are prepared to pay a premium for them.

Glass provides this extra edge to a food or beverage product that just draws in the consumer. These products tend to have a “pick-me-upfrom-the-shelf ” effect on consumers and this could be attributed to five key elements: aesthetical appeal, quality perception, preferred foodbusinessafrica.com

taste, product visibility hence appetite appeal and to some extent, resealability.

Impermeability – For all practical purposes in relation to the packaging of food, glass is impermeable. This also makes it tamper proof especially when the closure has a plastic shrinkable sleeve around it. This factor adds to the food safety component of food, as glass packaging add an extra barrier that consumers trust.

Chemical Integrity – Migration studies on glass has shown that glass is chemically inert with regards to its application in food packaging and from a health and hygiene view point. It is odorless and tasteless, without imparting any foreign taste or odour to the food product.

There are also no risks of Bisphenol A (linked to cases of hypertension) or plasticizers leeching out into the food and drinks as is observed with plastics and cans.

Heat Processable – Glass is thermally stable which makes it suitable for hot filling, in-glass sterilization and pasteurization. Glass is also open to microwave penetration. Glass is used widely in ovens and freezers with ease making it a versatile packaging option that keeps food safe in any environment.

UV protection – Amber glass protects food against UV rays and in some cases green glass as well. This preserves the organoleptic qualities of food which would otherwise be altered by exposure to UV radiation.

Design Potential – Glass can be molded into different distinct shapes to enhance brand recognition. Leading glass manufacturers have state of the art design expertise and systems that can be readily integrated to meet the requirements of the food manufacturer, branding, marketing and distribution. Its many beautiful shapes, colors and textures command attention on store shelves that is attractive to the consumer.

Strength – Glass has a high top load strength which eases filling, storage and distribution. It may be brittle but it is also elastic which means glass absorbs energy up to a point of impact hence can withstand high top load with minimal secondary packaging.

Hygiene and health – Glass surfaces can be easily wetted and dried prior to filling and hence cleanliness can be guaranteed where glass packaging is involved. Glass keeps food in its prime condition due to its inert nature, preserving even vitamins and minerals in the food.

In one survey, 90 percent of Americans said glass is the healthiest packaging option because it doesn’t leach anything into food or drinks.

Sustainability – Glass is returnable, re-usable and 100% recyclable and is the number one choice for sustainable packaging. Glass purity and quality never fade. In a world where many interesting packaging concepts are developing, glass is the trusted and proven packaging for health, taste and the environment.

It is also the only widely-used food packaging granted the FDA status of “GRAS” or generally recognized as safe – the highest standard. In a world of toxic threats, glass is the responsible choice to help protect your health and the environment for generations that follow Food Business Africa | dec 2014/Jan 2015

17

FOOD SAFETY milling

Food Safety concerns in milling of grains

T

he milling of grains into flours is probably one of the earliest unit operations as man became civilised from the days of hunting and gathering for food. It therefore follows that a mill is one of the first food processing equipment to arrive in a village – with African villages being home to probably tens of thousands of maize mills of various kinds.

The widespread occurrence of these mini-mills across the continent of Africa, providing essential means to feed the population, is a strong incentive to ensure that the food safety message reaches deep into the valleys and hills of the continent. The food safety concerns of small-scale milling, however, are not isolated. Even the biggest and most sophisticated mills, increasingly feeding the continent’s population, face the same challenges as the small-scale millers.

A number of physical and biological food safety concerns are inherent in the milling of grains. These hazards can affect the quality, taste and safety of the flour and have to be controlled to ensure safe food for the population. Millers have the challenging task to control the hazards though processing and convert the raw agricultural commodity into safe food grade ingredients.

As the continent moves towards sophisticated milling equipment, “the role of the miller is key in ensuring food safety”, states Dr. Béatrice Conde-Petit, Group Expert Food Science & Technology, Buhler AG.

Below are a number of microbial and physical hazards that need to be well monitored in grain milling operations to enhance food safety: Metallic matter – Metallic matter not only interferes with the mill’s operations and can lead to a shut-down of the whole mill, but they are also important in food safety as some metals can be hazardous to the consumer and can also affect the organoleptic quality of the food. It is important to install metal detectors in the mill to eliminate this hazard, and to ensure that the detectors work in prime condition by servicing them regularly.

“The miller must have a robust food safety system that ensures grain and flour meet the requirements” Foreign matter – Foreign matter including pests like insects, glass, wood, rodents and birds are hazards that need to be controlled. “A state of the art mill is today equipped with the necessary technology to control a number of hazards such as elimination of foreign matter and reduction of biological contaminants by mechanical cleaning, grading, separation, optical sorting and fractionation processes”, says Dr Conde-Petit. “In a mill, stringent grain intake quality control and grain cleaning

technologies such as size separation, gravity separation, and removal of fines through aspiration systems will reduce the risk of any food safety hazards”, adds Matthias Graeber, Head of Corporate Technology Satellite, Buhler Sortex Limited.

Aflatoxins – Africa lies in the tropical and subtropical regions, and with aflatoxins being one of the key microorganisms that grow and produce toxins in these climatic zones, aflatoxin control has become a critical public health concern. “Dietary aflatoxins have been linked with liver cell cancer, stunting in children, and reduced immunity.

In terms of economic damage, lots with aflatoxin levels above the maximum levels suffer from significant value loss”, according to Graeber. Aflatoxin control is therefore a priority for every miller.

Aflatoxin B1 is among the most toxic compounds for animals and humans which is the reason why regulation has set legal limits to protect consumers, notes Dr Conde-Petit.

“Hygienic design from plant lay-out to equipment design and well trained personnel are essential elements to ensure the safe processing of grains”, she adds.

A recent study by Buhler and the University of Bari showed that mechanical cleaning and optical sorting is particularly capable of reducing the levels of Aflatoxin

Quality management system It is important that the miller puts in place a robust food safety system that ensures that grain as received meets the requirements of the miller and that of the regulatory authority. Other pertinent quality parameters like moisture content can be fairly good indicators as to the suitability of the grain to meet requirements of the miller and should be controlled before the grains are received into the meal. The quality of water for conditioning purposes should also be monitored, as this can be a source of contamination.

Quality control measures should be enforced throughout the handling, processing and storage to ensure safe food.

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dec 2014/Jan 2015 | Food Business Africa

“HACCP (Hazard analysis and critical control points) risk management plans need to be in place along the whole value chain from farm to fork, ensuring safe feed and food. Finally, well trained personnel are essential elements to ensure the safe processing of grains”, concludes Graeber.

Differences in technology aside, the same principles apply to ensure that, whether at the small scale village hammer mill or in highly sophisticated mills, food safety of milled grains is guaranteed. The above principles will ensure this goal is achieved.

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pictorials fppe 2014

food processing & packaging expo 3-5th november, 2014, Nairobi kenya

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Food Business Africa | dec 2014/Jan 2015

19

special report halal

Halal Foods Rise to Prominence T

here is an increasing demand for Halal certified products in the Eastern African market due to an increased awareness of the importance of Halal products and the Halal certification mark from consumers in the region. This is the conclusion of Mr Fauz Qureishi, the Managing Director of Kenya Bureau of Halal Certification (KBHC).

“The Halal concept has been well embraced by both Muslims and non-Muslim consumers in the country and within the region. This is evident by the growing number of companies and establishments that are seeking Halal certification”, notes Mr Qureishi in an interview we had at their Nairobi, Kenya offices.

However, according to Mr Idris Sambuli, who heads the Regulatory Department at the KBHC, it has not been an easy ride for the non-profit organisation, as the knowledge of what Halal was at the time KBHC was being established in 2007, was quite scanty, even to the Muslim population in the country.

A walk down the aisle of the major supermarkets in Eastern Africa reveals that the Halal mark is one of the key labels one notices on the products, ranging from sugar, tea beef and milk products.

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Growing market demand The situation in Kenya is reflective of the challenges and opportunities that are faced by the food and beverage industry and consumers around the world.

“The approach to explain and promote halal in much the same way as organic products, focusing on wholesomeness, safety for consumption and use, and higher quality of ingredients is attracting shoppers from more diverse ethnic backgrounds and religious beliefs” states Datamonitor, a leading research firm. The company adds that with halal food and beverage market valued at $1trillion in 2012, and “growing faster than other consumer markets” halal products have “received special attention worldwide as one of the most potential-rich markets to be explored and developed”. With the Muslim population expected to grow to 26% of the world’s population by 2030 Halal products have a bright future.

The demand for Halal products around the world is increasing aggressively, with Muslim countries like Saudi Arabia, Malaysia and Indonesia offering mouthwatering prospects due to rising incomes and changing lifestyles. In Malaysia, setting itself up as the capital of Halal food products,

Kellogg’s the cereal maker, announced plans to build a US$ 130 million facility, and Nestle announced plans to expand its facilities in the country last year, according to the Oxford Business Group. United Arab Emirates (UAE) is planning to be major originator for Halal food products in the Middle East.

Dubai is creating a “Halal Cluster” that will offer manufacturing and logistic companies that will handle and manufacture halal food and other products in the Dubai Industrial City. said the idea to create a zone just for halal manufacturers was driven by the increased demand locally and internationally for such products.

“This industry itself, we know it is growing,” Dubai Industrial City CEO Abdullah Belhoul told The Associated Press.

“So we think there is a lot of opportunity... and we need to capitalize on this.”

Growth is also seen in non-Muslim countries like India, China, US and Thailand, with Asia and the Middle East the biggest growth driver currently.

In terms of sheer numbers, Africa, with a Muslim population of over 580 million Muslims and where Muslims constitute foodbusinessafrica.com

be certified Halal, but that with consumer education, the organisation has succeeded to a great extent.

53% of the population, according to www. muslimpopulation.com, the future potential of Halal products is huge, as the rising incomes, increasing urbanisation and improving economies will boost the demand for Halal products for this population going forward. Key Muslim population areas of North, Horn of Africa and the Sahel regions of Africa plus other countries with significant Muslim population including Nigeria, Tanzania, Ethiopia, Ivory Coast, Uganda and Kenya Halal origin According to the World Halal Council halal certification started in the West in the mid ’60s in the US, as a necessity for Muslims living in non-Muslim societies, to allow Muslims to preserve their identity and fulfil their religious obligations. It started as a means to make the foods acceptable to the Muslim population, just like the common Jewish kosher certification.

Originally focused on meat products for the reason that the meat halal slaughtering is made mandatory to all Muslims by the Holy Qur’an, Idris contends that it has taken KBHC to inform even Muslims in the country that other products should foodbusinessafrica.com

Consumers equate Halal to food safety “Halal is no longer about religion, but rather about safety, hygiene and quality,” Mohamed Hazli Mohamed Hussain, group CEO of DagangHalal, told a digital marketplace for halal products as well as a repository of halal certificates in Malaysia told the Oxford Business Group.

Mr Fauz agrees. “Besides fulfilling the Islamic dietary law, which is a must for Muslims, the food safety factor plays a significant contributor in determining the wholesome (safe, clean, nutritious, quality) aspects of the food. These aspects have been addressed through our KBHC Halal Standard and Halal Food - Production, Preparation, Handling and Storage - General Guidelines”.

KBHC has certified more than 140 establishments which include food processing companies, abattoirs, butcheries, restaurants, hospital kitchen facilities and many more; both locally and across the border in Tanzania and Uganda – a good indicator of the importance attached to the Halal certification by consumers, adds Idris.

Halal certification is also important in international trade. “Halal certification of products being exported instills confidence to the consumers in the importing countries that these products have been strictly inspected right from their source to their point of sale and the certifying body guarantees that the products meet the required dietary standards” states Idris, adding that the requirement to have products certified, and which used to be carried out by religious leaders without any formal process, is what led to the setting up of KBHC to bring order to the process.

Certification agencies grow into Africa Apart from KBHC, there are a number of Halal certification agencies in Africa.

These include the Muslim Association of Malawi, Tanzania Halal Bureau, Uganda Halal Bureau while South Africa has several agencies including The South African National Halaal Authority (SANHA), Islamic Council of South Africa (ICSA) and National Independent Halal Trust (NIHT).

Challenges remain in Halal industry growth According to the Datamonitor report, Halal: Boom market held back by significant challenges, there are some headwinds to the growth of Halal products, including the fact

Classification of Halal foods • Halal is an Arabic word that means lawful or permissible. With regards to food, Halal is the Islamic dietary standards, as prescribed in the Holy Qur’an.

• Haram – Harama products are the Opposite of Halal. Haram means unlawful or prohibited. Examples include pork, alcohol and gelatine.

• Mushbooh - Mushbooh is an Arabic term that means doubtful. Anything whose Halal status is not clear and can neither be categorized as Halal nor Haram is Mushbooh.

• The Halal Certification process is an assurance that a particular product has been thoroughly examined and found to conform to Islamic Dietary Laws and is therefore suitable for consumption by all.

• It is our responsibility at KBHC to ensure that a product does not contain, or is not derived from or does not come into contact with any non halal substances such as alcohol or pork products • When a product is Halal certified, the consumer has full confidence and assurance that there are no doubtful ingredients whatsoever contained in the product and therefore the consumer has no cause to worry on the Halal status of the product. - Kenya Bureau of Halal Certification

that Halal products are difficult to control and guarantee. Even KBHC warns on its website that unscrupulous traders pass on non-certified products as certified by simply affixing the Halal logo on their products.

Lack of certification in some countries also affects the growth of halal products.

While increasingly, the numbers of countryspecific Halal authorities have arisen, some countries still lack the requisite human capacity to audit and enforce Halal products’ handling and manufacture.

Further, a crowded market of halal accreditation agencies affects the integrity of halal regulatory framework. Some products are also quite difficult to substitute or replace.

Despite these challenges, Halal products have created a unique value proposition to consumers, and will continue to rise in value and coverage around the world. Africa is going to be a key market for these products going forward

Food Business Africa | dec 2014/Jan 2015

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processing compressed air

Importance of compressed air in the food and beverage industry Compressed air is a key utility in the manufacturing industry. Every modern food manufacturing facility employs the use of compressed air extensively in the plant, to the extent that the facility cannot function without it. But we ask, “Why is compressed air so essential in food and beverage industry?” in the following text, we shall examine the various uses of compressed air in the food and beverage industry, factors affecting the quality of air and steps to take to ensure that your air meets the quality requirements.

Uses of compressed air: Compressed air is used in a wide range of food and beverage applications which include: Packaging and filling systems – Compressed air is used in packaging processes and conveying systems to move food, raw materials and ingredients as well as in bulk packing and palletising machinery. It is also used in machinery that fills products such as cakes, pies and liquid products.

Cleaning systems - Compressed air is used in pneumatic systems for cleaning-in-place (CIP) operations and in dry cleaning operations, for example in bakery operations to blow off crumbs during cutting and cleaning, and in cleaning of containers prior to product filling such as in canned fruit industry Fluid pumps – Diaphragm pumps use compressed air to move products in the production and filling process of various food products.

Cutting operations – Compressed air is used to operate knives that act as a clean medium for cutting or peeling products such as fruits and onions.

Automated product sorting - Compressed air is used to sort a number of particulate food products during production of food.

Nitrogen generation - Compressed air is filtered to produce nitrogen which is used for packaging, considering that air is 78% nitrogen.

Why use compressed air?

Compressed air is a highly flexible utility, comparable to a muscle and can be used at high pressures of up to 750 psi for blow moulding operations as well as at very low pressures of 15 psi for blow off operations. Pneumatic systems are preferred over hydraulic systems because of the low maintenance and downtime associated with pneumatics as well as its clean nature.

Air quality Compressed air is not clean by nature. Untreated compressed air contains many potentially harmful or dangerous contaminants which must be removed or reduced to acceptable levels in order to protect the consumer and provide a safe and cost effective production facility.

Contaminants that may be a potential hazard for human consumption need to be controlled.

Sources and types of contamination in a compressed air system To ensure compressed air quality, it is critical first to understand the sources of compressed air contamination and the types of contaminants which must be reduced or eliminated. Typically, there are ten major contaminants that have to be removed or reduced to guarantee food safety and provide a safe and cost effective production facility.

These contaminants originate from various sources, including atmospheric air (water vapour, atmospheric dirt, oil vapour, and 22

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micro-organisms), the air compressor (liquid oil, oil aerosols, oil vapour, liquid water and water aerosols), compressed air storage devices (rust) and air distribution piping (rust and pipe scale).

Effects of contaminants in compressed air It is critical to maintain good air quality, failure to which reliability of the compressed air will be compromised and further, food safety can be compromised.

• Saturated air, water aerosols and liquid water cause corrosion to the storage and distribution system; damage valves, cylinders, tools and production equipment; damage to products and packaging in direct contact with the air; increase microbiological contamination; and reduce production efficiency and increased maintenance costs.

• Oil vapour can taint products and packaging with an oily smell and/or make workers feel unwell.

• Micro-organisms - Atmospheric air can contain up to 100 million micro-organisms per cubic metre. Bacteria, viruses, fungi and spores are drawn into the intake of the air compressor and due to their size; will pass directly through the compressor intake filters and into the compressed air system. The warm, moist compressed air provides an ideal environment for their growth. Many critical applications require sterility and if contaminated compressed air can directly or indirectly contact products, packaging or production machinery, then sterility will be compromised.

• Atmospheric dirt - Atmospheric air in industrial and urban environments will typically contain 140 - 150 million dirt particles in every cubic metre. As 80% of these particles are less than 2 microns in size, they are therefore too small to be captured by the compressor air intake filter and will travel unrestricted into the compressed air system.

• Liquid oil and oil aerosols - The majority of air compressors in use today still use oil in their compression stage for sealing, lubrication and cooling. The oil is in direct contact with the air as it is compressed, however due to the efficiency of modern air oil separators built into the compressor, only a small proportion of this lubricating oil is carried over into the compressed air system as a liquid, an aerosol or as oil vapour.

How to remove the contaminants?

As we have already discussed, the air produced by a compressor is hot, wet and dirty. Modern compressors have highly efficient systems to remove these contaminants if they are well serviced and maintained. Further, the choice of compressors, with various efficiencies and functionalities are available. It is critical to talk to a vendor with experienced staff and capability whenever you plan to buy a compressor for the best option available in the market

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KIFARU NGANO AND KIFARU MAIZE MEAL “THE BRAND OF CHOICE”

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lpha Grain Millers’ Kifaru Ngano and Kifaru Maize brands of flour have grown in popularity and proven to be favourites of Kenyan households and hospitality institutions. The superior quality of Kifaru is unmatched in the market and great care is taken to ensure that Kifaru’s consumers get the best. Rich with vitamins, healthier and delicious, Kifaru Ngano and Kifaru Maize meal products are products of choice. Kifaru Ngano and Kifaru Maize meal are available in 1kg, 2kg, 5kg and 10kg. The Kifaru brand of products is available in all Supermarkets, Dukas, Kiosks and wholesalers throughout the country.

ALPHA GRAIN MILLERS CONGRATULATE PETER MULEI ON THEIR RE-BRANDING AND UNVEILING OF THEIR NEW LOOK.

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Food Business Africa | dec 2014/Jan 2015

We are your true partners and are proud to be associated with you.

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COMPANY FEATURE ALPHA GRAIN MILLERS

Young Miller, Big Ambitions Alpha Grain Millers is one of the fastest growing flour milling businesses in Kenya. Having been started just four years ago, the company recently inaugurated a new wheat milling plant that has nearly doubled its production capacity.

Selina Wangusi sat down with Mr. Osman Maalim Mohammed, the General Manager, and Mr. Mohamednur Khalif, the Managing Director to discuss more about the company.

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o many observers, the KIFARU brand of maize and wheat flours appears to have been in the Kenyan market for ages. The brand, which is the flagship brand for Alpha Grain Millers’ maize and wheat flour products, has been in the market for only four years according to Mr. Mohammed, the General Manager of the company, during our interview in their Embakasi, Nairobi, Kenya office.

The disbelief on our faces aside, the fact that this brand is one of the most recognized brands in the Kenyan market is an indicator as to how fast the brand’s reputation has grown in the market, and how consumers have adopted this relatively new brand 24

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with ease. “The brand is a household name in Kenya”, noted Mr. Khalif, the Managing Director. “Our brand is available in all the leading supermarkets, wholesale outlets and small shops and kiosks thoughout the country.”

However, it has not been an easy ride for this family owned business that has its roots in Moyale, a town on the Kenya-Ethiopia border, to get into grips with the rigours of the flour milling industry.

FMCG distribution experience Alpha Grain Millers is a member of the Alpha Group of Companies which started as a distribution business in the 1970s in

Moyale Kenya.

Started as a humble retail shop (duka) in the far northern Kenyan town of Moyale in 1978, the company has grown in leaps and bounds before getting into the milling business. According to Mr. Khalif, after a few years in Moyale the business moved to Nanyuki town before ending up in Nairobi, under the name yh Where the company was involved in distribution of fast moving consumer goods (FMCG) manufactured by some of the biggest food companies for many years. This business grew aggressively and provided a vital learning ground for the company to start thinking of going into the flour milling business. foodbusinessafrica.com

The vast experience that the company had gathered in its distribution business was the vital incentive for the company to get into the milling business. “Our many years’ experience in distribution placed us in good standing with our customers. Although we were distributing other companies’ products our customers had grown to rely on us, and trusted us to deliver excellent service”, Mr. Khalif informed us.

Having been major distributors of sugar, cooking oils and other consumer goods, Mr. Khalif informed us that the decision to venture into milling was a no-brainer. “We were looking for a product that could serve the majority of our customers and which could ride on our distribution experience.

Milling fits into this perfectly. The demand of flour in the country is high and growing fast due to rising incomes, rapid urbanisation and increasing population”.

The company realized that in order to set up a mill it had to look for premises which they eventually found on Airport North Road, Embakasi, near the Jomo Kenyatta International Airport (JKIA), where it set up its manufacturing plant, warehouses and head office. It has also set up a modern weighbridge to weigh both incoming and outgoing products.

The operations Alpha Grain Millers specializes in processing of maize meal and wheat meal under the KIFARU brand. Its operational structure consists of maize and wheat mills, packaging plants and distribution depots.

The company started by producing KIFARU maize flour. The original maize meal plant, with a capacity of 60 metric tonnes (MT) per day was inaugurated four years ago at the Embakasi Plant. However, this capacity was soon exceeded by market demand, leading to the company putting up another mill barely a year later. The new 150 MT per day maize plant was commissioned in 2012 to meet this demand.

The company then added further capacity and added wheat milling to its operations in 2014 by buying out a small miller in Athi River town, 30 kilometers from Nairobi. The mill 90 ton maize mill foodbusinessafrica.com

at its Athi River Plant was rehabilitated and improved to modern standards after which the company later installed a new 150 MT per day wheat mill. It was commissioned in June 2014. The new plant gave rise to the KIFARU NGANO wheat flour brand. The company also set up a modern weighbridge to weigh both income and outgoing products.

In terms of man-power, the mill started with a work force of 50 people and within a year increased its workforce to 150. The same year it set up a transport division and invested in small and medium trucks totaling to more than 60 to facilitate distribution of its products to the market. Currently the man-power is about 400 people.

Efficient milling operations Alpha Grain Millers has invested heavily in modern and technologically advanced computerized milling machines and superior packaging machines for its products. “In today’s competitive regulated milling environment, we combine the latest global milling technology with cost-effective investment in civil, material handling and plant automation. In addition, we create fitfor-purpose sites, ensuring longer term local availability of feedstock and lower delivery costs to market.” Mr. Khalif informed us.

The company has installed highly efficient Buhler milling plants at both the Embakasi and Athi River Mr. Khalif explained that the firm prefers these mills for their efficiency and quality of the flours they produce.

Mr. Khalif added that for proper functioning, the mills are run by a team of highly-qualified engineers and production personnel. These comprise millers, mechanical and electrical engineers. “These are highly skilled professionals who are experts in their areas of specialization. We hire the best personnel to ensure that we offer our customers the quality of maize and wheat flour that they deserve. We are planning for more trainings in the future for our technical personnel”, Mr. Khalif informed us.

Alpha relies on imported wheat for milling, which requires large storage capacity. However it does not require Food Business Africa | dec 2014/Jan 2015

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plenty of storage for maize since the grain is obtained from within East Africa; currently the company has a storage capacity of 6,000 mts tonnes. “We plan to commission a 14,000 mts tonnes silo for storing the wheat flour” Mr. Khalif said.

If the customer response of the wheat flour is anything to go by, then their plan is to double the capacity in a short time, according to the Managing Director.

Processing The company receives the bulk of its grains by road from the port of Mombasa for wheat and from the East African region for maize. The produce is sampled to check their compliance to Kenya and company standards after which conforming produce is received into the company’s storage.

At the commencement of processing, the grains are cleaned to remove any debris, stones, and other foreign matter through a cleaning process that ensures only clean grains pass on for processing. Metal detectors installed along the lines ensure that any pieces of metal are removed from the system to ensure the meal is safe for consumers. The cleaned grain then undergoes a tempering operation that adjusts moisture (water) content to set level, after which the grain goes through highly automated gentle milling operations that reduces the particle size to the required consumer specification.

The milled flours are then blended with fortification agents that meet the requirement of the Kenya Bureau of standards, through an online dosing machine that incorporates vital vitamins and minerals into the flour, ensuring the flour is wholesome meal to the consumer.

The fortified flours are stored in bins, from where the flour is packaged through high speed packaging lines in the appropriate packages ready for the market.

Quality is Key Quality starts with the grain procurement for milling. This goes through a vigorous process of grading, right moisture level, aflatoxin testing etc. Mr. Khalif says they can only get high quality flour if the grains they receive from their suppliers meet the criteria for the raw material they need. .

The company maintains a fully functional quality management system, with certification to ISO 9001 is planned.

To ensure that only good quality flour is milled, all incoming grains are tested for a number of parameters including moisture content, foreign matter and aflatoxin. Only batches meeting the requirements are allowed into the process. Further online 26

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and in-process tests are carried out regularly in the company’s laboratory located at the Embakasi factory. The laboratory also carries out daily sensory testing of the milled flours, where the product is cooked and tasted by the quality team personnel to ensure the sensory quality is maintained.

The company is capable of carrying out both quantitative and qualitative tests for aflatoxin in their laboratory, hence improving on the speed and costs of this key quality attribute. Testing for vitamins and minerals are carried out by the Kenya Bureau of Standards and other private labs on a regular basis.

“We plan to establish a fully equipped laboratory in our Athi River Plant soon”, Mr. Khalif informed us.

Products and markets Alpha Grain Millers is a market focused and customer oriented organization with dedicated and hard-working team of well trained staff from wheat and maize procurement to flour milling, product development, quality control and sales and this has enabled them to leave a positive imprint in the market.

“Within a short period of time, the KIFARU product has grown in popularity and is now a favorite in many household This is due to its quality products which consumers have come to appreciate and identify with says the Managing Director.

Mr. Khalif also cites fair pricing as another factor behind the popularity of the KIFARU brand of flours in all leading supermarkets and retail shops in the country.

KIFARU maize and wheat flours are available in 1, 2, 5 and 10 kg consumer packs, offering choice and variety to consumers of the company’s products The products are widely available in the country, with some products finding their way into Uganda and Tanzania through distributors, even though the company doesn’t distribute directly to these countries.

The future The company has a wide distribution network within Kenya but plans to increase its production to meet rising demand.

“Demand for our products is quite high in the country, especially in Nairobi,” according to the MD. He adds that this gives them the incentive to invest more so that they can meet local demand and plan to get into the regional market in the near future.

Therefore, the company is planning to increase capacity of both the maize and wheat milling operations to reach this rising market and to get into the bulk baking

market so as to cater for the needs of the local baking industry.

It has plans to venture into animal feed processing within the next one year.

CSR activities Alpha Grain Millers has a number of community activities that it involves itself in to further the interest of the community.

The company has done various activities in conjunction with Uchumi Supermarket in Dagoretti area of Nairobi and with Mulleys Supermarket at a children’s home in Machakos County in Kenya, We also donated some food during last year festive season at the Kenyatta National Hospital the sick children’s ward and visited kayole children center(children home).

They have also taken part in a golf tournament organized by the Kenya Wildlife Service, where the proceeds of the competition went towards protecting the rhinos in the country

ALPHA GRAIN MILLERS AT A GLANCE HISTORY: Year of Incorporation: 2009; Year Operations Commenced: 2010 MANAGEMENT Managing Director: Mohamednur Khalif; General Manager: Osman Maalim Mohammed Group Chief Executive: Yunis Khalif Chairman: Ibrahim Khalif Mohamed VISION: To be the preferred manufacturer of maize, wheat and animal feeds using the latest technology within East and Central Africa.

MISSION: To obtain and sustain an enviable market space with the provision of un-paralleled quality consumer goods and services.

SLOGAN: Quality is our recipe.

PRODUCTS: KIFARU brand maize and wheat flours. Available in 1, 2, 5, and 10 kg packages Contact Address Location: Airport North Road, Embakasi, Nairobi, Kenya Tel: +254 20 2583080; +254 734 445444 Email: sales@alphagrainmillers.com

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industry focus beer industry in tanzania

managing director of SABMiller Africa has been quoted as saying.

Rising incomes, rapid urbanisation and bright prospects for Tanzania’s economy offer an excellent incentive for beer and other fast moving consumer companies to invest in Tanzania. We explore what makes this country’s beer industry tick and seek out opportunities and challenges for growth.

Key market drivers Euromonitor International, a leading research firm, has identified Tanzania as one of the 20 Markets of the Future that will offer the most opportunities for consumer goods companies globally. Tanzania is one of the fastest growing and most promising economies in sub-Saharan Africa; with anticipated real GDP growth of 7% over 2013-2020, exceeding the sub-Saharan, states the firm.

Tanzania has one of the fastest-growing populations in sub-Saharan Africa, recording a compound annual growth rate (CAGR) of 3% between 2009 and 2013 according to Euromonitor. A young and growing urban population numbering 49 million people in 2013, majority being below 20 years is bound to increase the number of consumers of beer in the medium and long run.

International audit firm, PriceWaterhouseCoopers, projects that Dar es Salaam, the capital city of Tanzania, will be one of the “Next 10” cities of Africa, cities that are expected to double their population and triple their economic output by 2030, and which will grow their populations by around 32 million people, the rapid rise in urbanisation will drive beer volumes up as well in the country. Dar es Salaam is expected to grow its population from the current 4 million to about 8 million in 15 years, while other towns like Arusha, Mbeya and Mwanza will continue to attract rural folk.

he beer industry in Tanzania is reminiscent of the “second scramble for Africa” – or the battle for the consumer that pits the four major beer majors – SABMiller, Heineken, Castel and Diageo – in a quest to grab the world’s last beer frontier, Africa. Grabbing this last frontier has been a priority to these four giants, with SABMiller already dominant in the South African economic area and some East African countries, Heineken having Nigeria and Congo while Diageo has its pulse on Kenya. Castel dominates the French speaking regions of the continent.

In beer terms, Africa grew its beer volumes by a mouth-watering 6% between 2012 and 2013. This growth beats Asia (which grew 3.9%) and Latin America (0.8%), the two regions that are driving global growth in beer volumes followed by Africa, and beats Europe and North America

Battle between SABMiller and Diageo According to Canadean, the total volume of beer consumed in Tanzania was 440 million litres. The country is among the top countries in Africa in beer production.

The Tanzania beer market is dominated by two majors – South African origin SABMiller-owned Tanzania Breweries (TBL) and British beverage giant Diageoowned East African Breweries (EABL), which owns the Tanzanian subsidiary Serengeti Breweries (SBL).

This market duopoly is quite reflective of the beer market in Eastern Africa, with Kenya, Uganda, Ethiopia and Rwanda serving as other examples where one dominant player has the market, with a second or third player (and some imports) angling for the rest of the market.

The period 2002 to 2010 were very critical in the current shape of the beer

The Beer Industry in Tanzania

T

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which had negative growth of 2.5% and 2.7% respectively, according to data published by Kirin, a major Japanese beer company.

Africa also provides the real prospect of future growth in beer volumes, on the back of improved economies, as the continent’s population drinks a paltry 8 litres per person per annum compared to the US that consumes 70 litres. The continent, which consumed 6.9% of the world’s beer volumes, provides these beer majors with a huge incentive as per capita consumption figures will grow, complemented with growth in population, driving beer volumes up on the continent.

“The positive economic backdrop in Africa, very favourable demographics and current low levels of consumption underpin our confidence in making additional investment to meet the strong demand for our products in the region”, Mark Bowman,

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industry in Tanzania. Having decided to enter each other’s markets in the 1990s, with TBL building a brewery in Thika, Kenya and EABL doing the same in Moshi, Tanzania, the bruising battle for market in the key Kenyan and Tanzanian markets was settled by both sides closing these new ventures. A deal was than crafted where EABL took up 20% shareholding TBL and TBL took up the same shareholding in EABL, with each of the parties brewing and distributing the rival’s products in their core markets. However this deal did not last for long, collapsing in 2010.

EABL has since bought out Serengeti Breweries, a smaller brewer in the country and built a new brewery in Moshi, northern Tanzania, as it strives to wrestle market share from its former partner.

The players Tanzania Breweries Ltd Tanzania Breweries Ltd (TBL) is the oldest brewing company in Tanzania and continues to maintain its position as the largest brewer in the country with a 74% market share, according to the company. SABMiller owns 36% of the company according to the company’s website, having been chosen by the Government in an auction for the brewery.

Established in 1930, TBL operates breweries in Dar-Es-Salaam, Mwanza, Arusha and Mbeya, as well as a malting plant in Moshi.

TBL brands include Safari, Ndovu, Castle, Castle Lite, Eagle and Kilimanjaro Premium Lager. Other regional brands are also available. Tanzania is a fairly huge country, and with limited infrastructure, TBL also owns a share of Tanzania Distilleries, a producer and marketer of wines and spirits and recently bought a 60% stake in Darbrew, a producer of sorghum based opaque beer, Chibuku. Tanzania Distilleries Limited continues to record excellent volume growth, ending the year with a 17.4 % growth in 2013.

TBL’s domination is hinged on the legacy of the company’s brands and national sentiment of the consumers, as the consumers perceive the brand to be a national icon brand. The company has also invested heavily in social schemes that endear the consumers to its brands, including sponsoring the national football team and the two leading football clubs, Simba and Yanga, two clubs with fanatical following in Tanzania.

The company’s multiple plants serve the various regions of the country, considering Tanzania is a fairly vast country, with limited 28

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infrastructure. The company’s Mbeya plant, the newest in the group and built for US$ 55 million according to sources, is reputed to be one of the most efficient in Africa.

Serengeti Breweries Ltd The company was incorporated in 1988 as Associated Breweries Limited and changed its name to Serengeti Breweries Limited in 2002. EABL acquired a 51% in Serengeti Breweries for about US$ 60.4 million in October 2010 at the end of its deal with TBL. Diageo, the majority shareholder of EABL last year pushed forward its intention to buy the remaining 49% of Serengeti.

The company produces a number of alcoholic and non-alcoholic brands including its mainstream Premium Serengeti

“Value brands including Eagle and Chibuku are also widely available in regional markets in the country” Lager, Serengeti Platinum and a number of EABL brand including Tusker and Tusker Malt.

The company has three plants in the country, Dar es Salaam, Moshi and Mwanza to serve its market requirements.

Product categories Mainstream lager beers dominate the Tanzanian beer landscape. Leading brands, Safari, Kilimanjaro, Castle, Premium Serengeti, and Tusker are the leading beer brands in the country. On the premium side, Castle Lite, a fairly recent introduction by TBL, has performed well in a market that could be thought of as value driven. Value brands including Eagle and Chibuku are also widely available in regional markets in the country.

Imported, mostly premium brands, including Heineken, are common in major towns and cities around the country, as the race for the premium market heats up with rising incomes and increasing exposure of consumers to the international brands.

Challenges to future investment A complicated and unpredictable business environment stands out as the main drawback for Tanzania in its quest to grow the beer industry. Recent changes in excise duties have adversely affected the industry, with TBL reporting a fall in volumes in the year 2013 due to a 25% hike in excise duty.

There exiats also the risk of change in alcohol policy which would affect the volume of business for the brewers, as has happened in Kenya recently. Cheap, easily available and unregulated local brews will also play a role in curbing growth of the beer market in the country.

According to Euromonitor, “corruption, bureaucracy and complicated land rights poorly protect investors and deter some investors from starting operations in the country. A low infrastructure level and still poor electricity coverage also diminish the country’s competitiveness”, factors which means the beer companies have to invest quite heavily in their own infrastructure to ensure beer reaches the far flung parts of the country without the basic infrastructure.

On the supply side, the bulk of the brewing raw materials are still being imported into the country. These include barley and malt, specialty white sugar, other adjuncts like starch and fine chemicals required for beer brewing.

Even for locally available materials like sorghum, the biggest challenge remains establishing a supply chain from the farms deep in rural areas to the brewing plants, despite erratic production and availability all year. This seriously affects the ability of the breweries to maintain low costs for their beers.

Tanzania, with other sites located in Dar es Salaam and Mwanza.

Future prospects The future of the brewing industry in Tanzania is bright and will grow. Infrastructural challenges aside, it is the company that will take advantage of the current short comings that will come out on top of the industry. The rapid population growth, increasing incomes, rapid urbanisation will continue to drive the industry forward foodbusinessafrica.com

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