Food Business Africa October 2019

Food Business WWW.FOODBUSINESSAFRICA.COM

YEAR 7 | NO. 38 | OCTOBER 2019

AFRICA’S NO.1 FOOD, BEVERAGE & MILLING INDUSTRY MAGAZINE

MY FACTORY • MY STORY

CAPWELL INDUSTRIES LTD

EVENT PREVIEW AFMASS FOODTECH SOUTHERN AFRICA ZAMBIA EDITION

20 YEARS JOURNEY TO A FOOD & BEVERAGE COMPANY

INTERVIEWS

BUHLER NETWORKING DAYS 2019

STEFAN SCHEIBER - CEO & IAN ROBERTS - CTO

MB PLC ETHIOPIA

HAILU ESHETU - GM

Discover our

Innovation Application Centers Visit our brand new locations in Europe, Middle East & Africa We are proud to announce the opening of 3 new Innovation & Application Centers that are newly added to our global network, that is dedicated to stimulate and accelerate your innovation process and new product development. Boost your innovation pipeline with: • Innovative and inspiring product concepts, prototypes and market ready solutions • Co-creation workshops and joint development • Insight on handling of Premixes and DSM ingredients in a variety of applications • Trouble shooting and customized technical training for your specific application And much more! Book a session in your nearest Innovation Application Center by reaching out to your DSM contact person.

Kaiseraugst, Switzerland Supporting applications: Beverage, Dairy, Bakery, Confectionery, Fats & Spreads, Instant Powders

Cairo, Egypt Supporting applications: Tablets, Effervescent Tablets, Hard Gel Capsules, Powder Supplements

Isando, South Africa Supporting applications: Beverage, Dairy, Bakery, Staple Food, Instant Powders

FOODTECH CONFERENCES & EXHIBITIONS

AFRICA HAPPENS AT AFMASS TM

Africa’s Largest Food, Beverage & Milling Industry Conferences & Expos EDITIONS: KENYA • ZAMBIA • TANZANIA • RWANDA • ETHIOPIA • UGANDA • NIGERIA • GHANA

Africa’s MarketPlace for: Ingredients • Milling & Processing Equipment • Packaging • Food Safety & Laboratory • Engineering & Automation • Industry Services REGISTRATION OPEN.

FOR REGISTRATION, SPONSORSHIP & EXHIBITION OPPORTUNITIES,

CONTACT: INFO@FOODWORLDMEDIA.NET OR CALL: +254 725 34 39 32

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CONTENTS ON THE COVER

Food Business WWW.FOODBUSINESSAFRICA.COM

YEAR 7 | NO. 38 | OCTOBER 2019

AFRICA’S NO.1 FOOD, BEVERAGE & MILLING INDUSTRY MAGAZINE

MY FACTORY • MY STORY

CAPWELL INDUSTRIES LTD 20 YEARS JOURNEY TO A FOOD & BEVERAGE COMPANY

EVENT PREVIEW AFMASS FOODTECH SOUTHERN AFRICA ZAMBIA EDITION INTERVIEWS

RAJAN SHAH - CEO, CAPWELL INDUSTRIES LTD Capwell Industries is on a journey of transformation as it moves to become a total food and beverage company. We have a chat with the CEO and his team on the future of the company.

Read this and other issues of this magazine for free on www.foodbusinessafrica.com

BUHLER NETWORKING DAYS 2019

STEFAN SCHEIBER - CEO & IAN ROBERTS - CTO

MB PLC ETHIOPIA

HAILU ESHETU - GM

REGULARS 4 Editorial 6 Events Calendar 10 AFMASS FoodTech Southern Africa - Zambia Edition Preview 12 What they said 14 Food Business Africa News 29 Sustainability Business Africa News 42 New Products on the Shelf 44 Africa Dairy conference (AFDA) 2019 pictorials 45 Milling & Baking Africa News 58 Supplier News & Innovations MY FACTORY • MY STORY: Capwell Industries Ltd, Kenya

INTERVIEW: MB PLC, Ethiopia

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INTERVIEW: Buhler Networking Days 2019 50

NEXT ISSUE: DECEMBER 2019 MY FACTORY • MY STORY Raka Cheese | Kenafric Bakery

MILLING & BAKING: Baking: Fibre enrichment COUNTRY FOCUS: Dairy Industry in Kenya COMPANY FOCUS: Flour Mills of Nigeria TRENDS: Low alcohol beer PACKAGING: Stand-up pouches 4

OCTOBER 2019 | FOOD BUSINESS AFRICA

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OCTOBER 2019 | FOOD BUSINESS AFRICA

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EDITORIAL

Sugar reduction initiatives by UK food companies shows global progress is possible

A

recent report by Public Health England (PHE) provides evidence that sugar reduction in food products is possible, even as mixed results show that the amount of work to be done in some sectors of the industry remain monumental.

The report, Sugar reduction: progress between 2015 and 2018 showed a significant reduction in sugar content in retailer own brand and manufacturer branded yogurts and breakfast cereals by 10.3% and 8.5% respectively. It further revealed that since 2015, there was an overall 2.9% reduction for retailers and manufacturers while there was a 4.9% reduction in all food products in the country.

PHE seeks to have food companies hit the 20% reduction target in foods most commonly consumed by kids, including cakes, breakfast cereals and sweets to forestall the rise in obesity and associated health challenges in the country.

And significantly, there was a 28.8% sugar reduction per 100 ml in retailers’ own and manufacturers products and a 27.2% reduction per 100 ml for drinks consumed out of home, for products under the Soft Drinks Industry Levy (SDIL), showing the significant impact the UK government policy that imposed levies of high sugar products has had on this issue. The report added that consumer shift towards zero or lower sugar products had picked pace, with sugar purchased from soft drinks decreasing in all socio-economic groups, while 30,133 tonnes of sugar had been removed without reducing soft drink sales, resulting in around 37.5 billion fewer kilocalories sold in sugary drinks each year.

However, it also revealed the challenges with sugar reduction in some product categories, with biscuits, ice cream and chocolate/ confectionery products among the categories that barely moved the needle in their quest to reduce sugar, registering reductions below 0.6%.

“The report shows a mixed picture. Encouragingly, some businesses have made good progress in reducing sugar but some businesses and categories have made very little or none. We know the public wants the food industry to make food healthier. It is clear this can be done, but we urge the whole of the food and drink

industry to keep up the momentum to help families make healthier choices.” Commented Dr Alison Tedstone, Chief Nutritionist at PHE. Sugar reduction is possible in Africa The report comes at an important time, as the food and drink industry around the World, led by the sector that has faced the biggest backlash, the soft beverage industry has strived to reduce the sugar content if its products to either meet or forestall government regulations on sugar. A good example is Coca-Cola, which has taken its industry leadership a notch higher by rolling its Zero Sugar products around the World at break neck speed – seeking to define the future of carbonated soft drinks consumption even in the unlikeliest of places, Africa.

The UK report and the example set by Coca-Cola should provide a good example to the food industry that in some sectors of the industry, it is truly possible to reduce or eliminate sugar altogether, despite the often-held belief that it is impossible or even unnecessary to reduce sugar in Africa. While Africa still lags behind developed countries in its sugar consumption per capita, it already is carrying an increasing burden of lifestyle diseases that can only be exacerbated by rising sugar consumption.

In this issue we have an insight into the dairy industry in Ethiopia through an interview with the General Manager of MB Plc, one of the leading milk processors in the country. We also have a comprehensive review of Capwell Industries, one of Kenya’s foremost milling companies that has broadened its product portfolio into the cereal-based beverage categories. Plus many more We wish you a good read Francis Juma Publisher

SUBSCRIPTION

Email: info@foodworldmedia.net

www.foodbusinessafrica.com Year 7 | Issue 5 | No.38 • ISSN 2307-3535

FOUNDER & PUBLISHER Francis Juma EDITORIAL Clement Muriuki I Virginia Nyoro ADVERTISING & SUBSCRIPTION Jonah Sambai | Hellen Mucheru CONTRIBUTORS Ronald Onsare DESIGN & LAYOUT Frank Bett

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OCTOBER 2019 | FOOD BUSINESS AFRICA

FoodWorld Media

P.O Box 1874-00621, Nairobi Kenya Tel: +254 20 8155022, +254 725 343932 Email: info@foodworldmedia.net Website: www.foodworldmedia.net RELATED PUBLICATION

Food Business Africa (ISSN 2307-3535) is published 6 times a year by FoodWorld Media Ltd. The magazine is distributed for free to food, beverage, milling and foodservice companies and Government regulatory agencies in Africa. The magazine is available through paid subscription for the other stakeholders in the food chain, including suppliers to the sector.

Copyright 2019. 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 CALENDAR October 9-11, 2019

November 25-26

February 18-21, 2020

AFMASS FoodTech Southern Africa Lusaka, Zambia Focus: Food, Beverage & Milling www.afmass.com

Food West Africa Lagos, Nigeria Focus: Food & Beverage www.foodwestafrica.com

Dairy and Meat Exhibition Moscow, Russia Focus: Dairy www.md-expo.ru

October 12-15, 2019

November 27-29, 2019

March 3-5, 2020

NFRA Convention Frozen & Refrigerated Goods Orlando, USA Focus: Frozen & Refrigerated Foods www.nfraconvention.org

Drink Japan Tokyo, Japan Focus: Beverages www.drinkjapa.jp

Pack Expo East Philadelphia, USA Focus: Packaging Technologies www.packexpoeast.com

November 29, 2019

March 11-13, 2020

Africa Food Industry Excellence Awards Nairobi Kenya, Focus: Awards Ceremony www.awards.foodbusinessafrica.com

AFMASS FoodTech Eastern Africa Kampala, Uganda Focus: Food, Beverage & Milling www.afmass.com

December 9-11, 2019

March 24-26, 2020

FoodAfrica Cairo Egypt Focus: Food & Beverage www.foodafrica-expo.com

Agrofood Nigeria Lagos, Nigeria Focus: Food & Beverage www.agrofood-nigeria.com

December 10-12, 2019

March 30 - April1, 2020

Agrofood West Africa Accra, Ghana Focus: Food & Agriculture www.agrofood-westafrica.com

FoodEx UK Birmingham, UK Focus: Food & Beverage www.foodex.co.uk

December 3-5, 2019

April 15-17, 2020

Fi Europe & Ni Paris France Focus: Food & Beverage ingredients www.figlobal.com

Anufood China Shenzhen, China Focus: Food & Beverage www.anufoodchina.com

October 17-18, 2019 Future Food Tech Summit London, UK Focus: Food & Beverage www.futurefoodtechlondon.com

October 29-31, 2019 Gulfood Manufacturing Dubai, UAE Focus: Food & Beverage www.gulfoodmanufacturing.com

October 30 - November 1, 2019 China Fisheries & Sea FoodExpo China Focus: Seafood & Aquaculture www.chinaseafoodexpo.com

November 3-6, 2019 IAOM Middle East & Africa Dubai, UAE Focus: Milling www.iaom-mea.com

November 5-8, 2019 Aquatech Amsterdam Amsterdam, USA Focus: Water Technology www.aquatechtrade.com

November 11-14, 2019 Foodex Saudi Saudi Arabia Focus: Food & Drink www.foodexsaudi.com

November 13-16, 2019 Vietnam FoodExpo Vietnam Focus: Food & Beverage www.foodexpo.vn

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OCTOBER 2019 | FOOD BUSINESS AFRICA

January 28-30, 2020 International Production & Processing Expo Atlanta, USA Focus: Meat, Poultry and Animal Feed www.ippe.org

February 2-5, 2020 ISM Cologne Germany Focus: Confectionery & Snacks www.ism-cologne.com

February 16-20, 2020 Gulfood Dubai, UAE Focus: Food & Beverage www.gulfood.com

HOSTING AN EVENT IN AFRICA? We provide events listing services to event organisers in Africa. You can list your event here and on the www. foodbusinessafrica.com website by contacting us on +254 725 34 39 32 or email: info@foorworldmedia.net

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OCTOBER 2019 | FOOD BUSINESS AFRICA

9

AFRICA

DATE: OCTOBER 15-16, 2020

BUSINESS

VENUE: NAIROBI, KENYA

SUMMIT

www.africabusinesssummit.com

Welcome to Africa’s business transformation and innovation conference and expo At Africa Business Summit conference sessions, some of the notable thinkers and doers from across Africa and the World will share best practices, experiences and opportunities that can be harnessed to make businesses in the region more agile, competitive, profitable and sustainable.

The Africa Business Summit is the premier annual forum that brings together passionate key decision makers to discuss the latest economic trends, technologies, regulations, market trends and opportunities in subSaharan Africa.

Held in Nairobi, Kenya, the Summit is the region's largest meeting place for industry leaders, investors and innovators; Government regulators and policy makers and other stakeholders, with a focus on the fast growing and changing entrepreneurship landscape in Africa.

To complement the Summit will be an Expo Hall with a collection of local, regional and international suppliers of various products and services to Africa's business, Government and development community - and where the Summit delegates shall discover the latest technologies and solutions aimed at the growing investment space in Africa.

The event is structured in panel discussions and plenary sessions, with each session focused on a particular sector of the economy or issue of concern to the stakeholders.

Register today to attend Africa's meeting place of winners.

Sign up today opportunities to Sponsor, Exhibit, Speak and participate at Panel Discussions at Africa’s premier business conference and Expo.

INVESTMENT OPPORTUNITIES

TECHNOLOGY TRENDS

Contact FW Media Tel: +254 725 343 932; +254 20 8155022 Email: info@foodworldmedia.net

BUSINESS GROWTH & MANAGEMENT

MARKET TRENDS

AFRICA Inc. MOST INNOVATIVE COMPANIES AWARDS

Apply to be among the select enterprises that will be feted at the Africa Inc.’s Most Innovative Companies Awards during the Africa Business Summit.

The Awards recognise organisations that are at the cutting edge of transforming the industry, the economy and the society in Africa. Be they large conglomerates or young start-ups, the Awards provide the opportunity to be recognised as a leader in your field, while your team’s efforts are validated - boosting team morale.

Apply today and stand a chance of being crowned one of Africa’s most innovative companies.

CATEGORIES:

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SUSTAINABILITY

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PEOPLE & SKILLS MANAGEMENT

The 2020 edition of the Awards is seeking entries in the following categories from Africa: Food - Food products and technologies of delivery, processing and availing food that change what we eat and how we eat sustainably Beauty - Cosmetics products and technologies that change the game in the way we take care of our skin, face and hair Healthcare - Applications, devices and technologies redefining healthcare delivery and patient care.

Fitness & Wellness - Outlets and technologies redefining the delivery of fitness and wellness to individuals and corporates Social Media - New technologies and platforms that are changing the way people interact with each other online Agriculture - Products and technologies that are changing the way agriculture and agribusiness is done, improving yields, reducing disease and improving sustainability Education - Products and technologies that are changing the way learning is carried out, boosting learner outcomes Television - Media companies redefining the way content reaches audiences using new technologies and concepts Fashion & Style - Companies that are defining the future of fashion and dressing in our times Real Estate - Companies redefining the future of urban leaving with sustainability and access in mind Financial Services - Products and technologies that are changing the way wealth is created and managed and financial services reach more people Travel - Companies that are redfining the future of traveling Hospitality - Companies that are redfining the future of business and leisure hospitality Transport & Logistics - Companies that changing the game in the field of delivery of goods across the Continent.

HOW TO APPLY Log onto www.africabusinesssummit.com and apply online. Submission of Entries open March 1, 2020

EVENTS PREVIEW

Event: AFMASS Southern Africa Zambia edition When: October 9-11, 2019 Where: Radisson Blu Hotel, Lusaka, Zambia Timings: 09.00 am to 06.00 pm daily

Top food industry leaders set to speak at AFMASS FoodTech Southern Africa Zambia edition

T

he 2019 edition of AFMASS FoodTech Southern Africa edition is set to welcome some of the most outstanding industry leaders from across Southern Africa as the food, beverage and milling industry stakeholders come together at the region's largest industry event.

Set to be hosted on October 9-11, 2019 at the magnificent Radisson Blu Hotel, the event has a program full of unique insights and opportunities in the region.

Strong speaker and panelist profiles The 2019 edition of the event will be graced

by Tafadzwa Musarara, who is the National Chairman of the Grain Millers Association of Zimbabwe, who will share with the attendees the opportunities, challenges and future porspects of the milling industry in his country and the region. He will be joined by Andrew Chintala, the President of the Millers Association of Zambia, Fisho Mwale, the Director of leading fish ing industry player Yalelo, Monica Musonda, the CEO. Others in the high level panels include Gaurav Vijayvargiya, the Strategy Director at Seba Foods and Founder of Java Foods and Sylvia Banda, the CEO of Sylva Food Solutions.

The trade event, which marks the second year in a row that the event is

12 OCTOBER 2019 | FOOD BUSINESS AFRICA

hosted in Zambia, will showcase the latest processing, packaging and food safety technologies, market trends and investments opportunities in the growing Southern African region.

With a new venue at the magnificent Radisson Blu Hotel in the middle of Lusaka, Zambia, the event features an improved conference program, a bigger Expo Hall and many more opportunities to network and trade with some of the region's key decision makers in the private sector, Government, NGOs and other stakeholders.

More than 1,000 delegates and visitors from across southern Africa and the World are expected to grace the event, as Lusaka hosts Southern Africa's largest food, beverage and milling industry event.

The organisers are looking forward to an improvement in attendance from across the region, from the more than the 700 delegates and visitors who graced the event in its inaugural edition , which was held last year in October.

The 2018 event saw the participation of delegates from across the SADC region, including South Africa, Zambia, Zimbabwe, Botswana, Malawi, Namibia, Angola, DRC and Tanzania. The SADC economic block brings together 16 southern and central African countries.

"We look forward to hosting an

improved AFMASS FoodTech Southern Africa 2019. We hope that this event will continue our tradition of delivering value for the key stakeholders that attend the events across Africa," says Francis Juma, the team leader at FoodWorld Media, the organisers of the event.

More sponsors, exhibitors and partners Continuing with the goal of bringing together the food manufacturing, retail and food service sectors of the industry together, this edition of AFMASS FoodTech Southern Africa has received impressive support from a number of sponsors, exhibitors and partners.

"We are excited with the preparations so far from across the industry, with hundreds of delegates already confirmed, while the list of sponsors, exhibitors and partners has increased substantially, with Tetra Pak, the leaders in processing and packaging technologies having confirmed their premium sponsorship of the event. The list of exhibitors has also grown, providing the most diversified solutions at the Expo Hall to the event's visitors.

This year's event is sponsored by Tetra Pak, Buhler, Atlas Copco, Pingle and Apple Max fruit juice.

You can find out more information about the events at www.afmass.com.

FOODBUSINESSAFRICA.COM

FREE

FOODTECH SO UTHER N A FRICA Z A M B I A KEYNOTE SPEAKER

TAFADZWA MSARARA Chairman, Grain Millers Association of Zimbabwe.

SPEAKER

ANDREW CHINTALA President, Millers Association of Zambia

SPEAKER

MONICA MUSONDA

CEO & Founder, Java Foods

ENTRY

OCTOBER 9-11, 2019 RADISSON BLU HOTEL Great East Road

LUSAKA, ZAMBIA

E D I T I O N SPEAKER

SPEAKER

GAURAV VIJAYVARGIYA Director – Strategy Seba Foods

SLYVIA BANDA

MD Slyvia Food Solutions

SPEAKER

CHOMBA MWANSA BOWA

MD - Meraki Cakebar & Cafe

SPEAKER

ESTHER NGOMA MAPENDA

Regional Brewing & Quality Manager Zambia,Botswana,Namibia - AB InBev

SPEAKER

FISHO MWALE

Director, Yalelo Ltd

Welcome to the 2nd edition of Zambia & SADC region’s Food, Beverage & Milling Industry Conference & Expo

WWW.AFMASS.COM/ZAMBIA2019 SPONSORS

PARTNERS MAZ

WHAT THEY SAID

“We have set up a leadership group that engages the ministers of finance. Setting up nutrition country frameworks can’t be done without a minister of finance”.

The African Development Bank President Akinwumi Adesina at the SUN Movement meeting underlining the critical role of sound nutrition and the urgent need to engage ministers of finance on the continent to put nutrition high on their national budgets.

“Lack of access to electricity and unreliable electricity supply are key constraints to doing business in Nigeria,” The International Monetary Fund (IMF) in its latest report on Nigeria, forcing households to spend US$12 billion a year on fuelling generators, twice the country’s infrastructure budget, with an annual economic loss of US$29 billion.

“We will have two flexible packaging manufacturing units in Africa, Everest and the recently opened facility in Egypt. With these two sites we will be in an excellent position to tap into the growth opportunities of this exciting region.”

Olli Koponen executive vice-president of Huhtamaki’s Flexible Packaging division speaking on the company’s recent acquisition of Everest Flexibles, a packaging firm in South Africa “The animal protein market is evolving, and consumer focus on animal health and well-being is becoming increasingly important.

“It’s a key area for growth, and we intend to better serve customers in this rapidly evolving market.”

“With its strong naturals portfolio in perfumery, flavors and ingredients, Robertet is well positioned to benefit from consumers’ continued demand for authentic natural products. This investment is fully in line with our vision for sustainable and natural solutions.”

Gilbert Ghostine, CEO of flavours and fragrances company Firmenich, when the company the acquisition of a minority stake in French company Robertet.

“The solar plant in Dubai is an important contribution to Nestlé’s global ambition to achieve zero net greenhouse gas emissions by 2050. We are embracing the most ambitious aim of the Paris Agreement to limit global temperature rise to 1.5°C.” Marco Settembri, Project Head and Dean of the Swiss Federal Institute of Technology Lausanne (EPFL) in the Middle East speaking at the commissioning of solar energy plant at Nestle’s Dubai factory, said to be the largest ground-mounted private solar plant in the UAE that will generate 7.2GWh of electricity per year and supply 85% of the factory’s annual electricity consumption and eliminate 4.5 million kilograms of CO2 per year.

“We undoubtedly have a role to play in addressing the challenges of the modern food system, from climate change and resource scarcity, to packaging waste and income inequality. As we strive to use our global scale for good, we are deeply committed to accelerating progress in our sustainability agenda.”

Ramon Laguarta, PepsiCo’s CEO and Chairman, talking when the company launched its 2018 sustainability report

David Webster, head of Cargill Animal Nutrition and Health, said as he announced a new structure for its animal nutrition business a new and leadership team in response to growing concerns about animal health and wellness – and rising opportunities for the company around the World

“Combining sun and wind as energy sources makes a lot of sense in a country like Denmark due to its climate. In addition to sharpening our own commitment to a sustainable future, we are proud of actively contributing on a national level through this agreement.”

“Our strategy will see us focus on world-class dairy ingredients for our customers around the world, and innovative ingredients that meet nutrition needs right across people’s life stages. We will focus on ingredient categories: Paediatrics, Medical and Ageing, Sports and Active, and Core Dairy. This focus on dairy ingredients and foodservice will see us playing to our strengths and driving more value from the parts of our business that consistently perform.”

Annemarie Meisling, Senior Director of Sustainability, Chr. Hansen at the unveiling of a new 10-year agreement that enables Chr. Hansen Denmark to utilize 100% green power from two solar parks to power its factories and facilities

Fonterra CEO, Miles Hurrell, when he unveiled a new strategy and a revamped leadership team at the dairy giant following a tough two years of major challenges with its former strategy, which has seen the dairy sell of various assets across the World “This Transaction is in line with and a continuation of the Group’s strategic vision, which will allow Zambeef to focus on growing its core business, which is the production and retailing of cold chain meat and dairy products and stockfeed, delivered through the Group’s extensive processing, distribution and retail network.’’

Dr. Jacob Mwanza, Chairman of Zambeef Products Plc on the abribusiness giant’s planned sale to Chenguang Biotech (Zambia) AgriDev Limited of its Sinazongwe Farm located in southern Zambia.

14 OCTOBER 2019 | FOOD BUSINESS AFRICA

“This high-tech mill offers unparalleled advantages, including the most up-to-date monitoring and quality-control equipment; swift and efficient packing and transportation options; and the ability to mill a wide array of wheat varieties to ensure we are meeting the needs of all of our customers across the Midwest.”

Kevin Like, president of ADM Milling at the inauguration of the company’s mill in Illinois, USA, said to be the largest in North America.

“By continuing to expand our footprint in Zambia, we illustrate our commitment to the development and growth of our country.

This is our 37th Shoprite store in Zambia and with its opening, we’re creating 200 jobs.”

Shoprite Zambia General Manager, Charles Botha speaking at the opening of the retailer’s newest outlet in Lusaka, Zambia at the East Park Mall.

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FOODEX AFRICA FOOD INDUSTRY EXCELLENCE AWARDS

GALA DINNER

NOVEMBER 29, 2019 SAFARI PARK HOTEL, NAIROBI, KENYA

SIGN UP TO ATTEND AFRICA’S MOST PRESTIGIOUS FOOD INDUSTRY AWARDS CEREMONY GALA DINNER

Send Sponsorship and attendance queries to: TEL: +254 725 343 932; INFO@FOODWORLDMEDIA.NET SPONSORS

• US$100/KSH 8620+VAT PER PERSON (FOOD INDUSTRY, GOVT, RETAILERS ETC) • US$120/KSH 9900+VAT (SUPPLIERS & CONSULTANTS)

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UPDATES M&A

Danish Brewing acquires Carlsberg distributor in Kenya King Beverage

KENYA – Danish Brewing East Africa Limited, a subsidiary of Bounty Global Management firm, has acquired Carlsberg and Tuborg beers distributor in Kenya, King Beverage Limited from Centum Investments.

Established in 2014, King Beverage enjoys exclusive rights to import and distribute such brands as Carlsberg and Tuborg beers, Teacher whisky and Jim Beam whiskeys in the country. Centum Investment sold King Beverage, in which it held 100% of the issued shares, for US$1.3 million (Sh130 million) against the US$5 million (Sh500 million) it had invested in the company.

Centum’s decision to offload the business comes five years after it invested in the company, with the investment firm noting that it has been struggling to make the business profitable. It had expected to shift part of the business from import to local manufacturing, however, it has cited challenges in the alcoholic beverages industry to impede the expansion.

“The strategic intent by Centum was to grow volumes of the business, initially under an import model and later under local production. However, due to various industry challenges, including competition from gray products and parallel imports of similar products, it was evident that the business would not be able to scale up volumes to warrant the further investment

by Centum into local production,” said Centum in a statement.

Centum added that it would in future avoid investing in new ventures or start-ups and instead go for more mature investments where returns are almost guaranteed. The company recently announced it was selling all its shares in two Kenyan Coca-Cola franchise bottlers; Almasi Beverages Limited (ABL) and Nairobi Bottlers (NBL) to Coca-Cola Beverages Africa (CCBA) for US$192.5 million (KSh19.5 billion).

M&A

Coca-Cola Beverages Africa acquires majority stake in Eswatini bottler ESWATINI – Coca-Cola Beverages Africa (CCBA) has acquired 60% shareholding in the soft drinks business of Eswatini Beverages.

The non-alcoholic ready-to-drink business in Eswatini, in which the remaining 40% is owned by Sovereign wealth fund Tibiyo Taka Ngwane, will be known as Eswatini Coca-Cola Beverages (ECCB) and will operate as a subsidiary of CCBA. Following the transaction, ECCB has appointed Logico Unlimited as the official distributor of all CocaCola products in Eswatini optimize the distribution system. Logico Unlimited will be responsible for the collection of monies owed, while ECCB will be responsible for the negotiations of trading terms and relationships with customers.

“Eswatini customers will benefit from being part of a consolidated, successful Coca-Cola ecosystem that spans the continent, creating new opportunities for everyone across the value chain,” ECCB country manager Sanele Khumalo said. “We will also be able to respond to consumer demand more quickly. Expanding our African footprint brings huge benefits to local consumers and businesses. By leveraging scale, we can do more for our customers and also drive our sustainability goals. The creation of ECCB is another milestone in that strategy,” Khumalo added.

CCBA was formed in 2016 through the combination of the African nonalcoholic ready-to-drink bottling interests of SABMiller, The Coca-Cola Company and Gutsche Family Investments. AB

"ESWATINI CUSTOMERS WILL BENEFIT FROM BEING PART OF A CONSOLIDATED, SUCCESSFUL COCA-COLA ECOSYSTEM THAT SPANS THE CONTINENT, CREATING NEW OPPORTUNITIES FOR EVERYONE ACROSS THE VALUE CHAIN" Sanele Khumalo InBevlater acquired SABMiller and reached an agreement to transfer AB InBev’s 54.5% equity stake in CCBA to Coca-Cola.

Earlier this year, The Coca-Cola Company said that it will retain its majority stake in CCBA for the foreseeable future, despite previously announcing its intention to refranchise the African bottler.

CCBA has since then continued to consolidate its soft beverage bottling operations in Africa. In December last year, CCBA acquired its Coca-Cola bottling business from Zambia Breweries, a subsidiary of Anheuser-Busch InBev. In June, CCBA entered into an agreement to acquire stakes in two Kenyan Coca-Cola franchise bottlers from public investment company, Centum Investments in a US$192.5 million valuation.

Coca-Cola Beverages Africa is the 8th largest Coca-Cola bottling partner in the world by revenue and the largest on the continent. It accounts for 40% of all CocaCola products sold in Africa by volume.

INVESTMENT

Ethiopian firm inaugurates US$1.37m coffee processing plant ETHIOPIA – Melange Coffee Roasters, a family-owned coffee roaster company has inaugurated a new coffee roasting and packaging plant after investing US$1.37 million (40 million Br).

The facility has a daily capacity of roasting 7,500 kilograms and a packaging capacity of 3,600 kilograms of coffee per hour.

Solomon Kassa, co-owner and operations director of Melange Coffee Roaster notes that the company has secured a 1,000 tonnes contract for one year and is about to export its first batch of roasted coffees with an immediate entry to Chinese and South African markets. The automated packing unit has a capacity of packing 1,800

bags, each containing 250gm of processed powder coffee, an hour.

In a country where coffee is a major agricultural commodity, Solomon is confident that there is a huge demand for value added coffee from Ethiopia. Despite being the leading coffee exporter in Africa, the country have been struggling with market challenges in the international market especially with regards to trade prices and contract breaches.

In the concluded budget year, Ethiopia earned US$763 million from the export of 230,764 tonnes of coffee, the second highest in Ethiopian history, lower than last year’s highest export level.

INNOVATIONS

Müller introduces Müllerlight gin and tonic-inspired yogurt in UK

UK – Müller has introduced a new Müllerlight gin and tonicinspired yogurt, a high in protein fat free yoghurt containing no added sugar.

With the product, which is Müller’s first ever gin and tonic inspired yogurt, the company is continuing with its strategy to add inspiration to its core range of branded yogurts, Müllerlight and Müller Corner, as it targets category growth.

Müllerlight Gin & Tonic inspired yogurt is available in six pack format (three Gin & Tonic flavour yogurt and three Pink Gin & Elderflower flavour yogurt) in Tesco and Asda at a RRP of £3.

Michael Inpong, Chief Marketing Officer at Müller said

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“Müllerlight is one of the nation’s favourite yogurt brand, but with constant shifting consumer behaviour, we need to find smart ways to grow the brand and drive category growth.

“We’ve already strengthened the core with a new and improved recipe, and we’re launching two new limited editions, Müllerlight Irish Coffee Flavour Yogurt and Müllerlight Mince Pie Flavour Yogurt.”

Inpong also unveiled that the company will be launching disruptive innovations like Müllerlight Amore and bringing Müllerlight into a segment where it has been absent, with Müller’s first ever range of natural yogurt.

“Whether eaten on its own, or with fruit, nuts, or granola, we think Müllerlight Natural and Müllerlight Greek Style Natural appeal to everyone, especially those following various weight management programmes.

“Müller is here to add taste to everyday life, and we know that Müllerlight shoppers enjoy eating our yogurts throughout the day.

Gin is the UK’s favourite spirit, and now people can enjoy the taste in a yogurt that is also fat free, high in protein and contains 0% added sugar,” Inpong added.

The launch will be supported by an ongoing Müllerlight multimedia campaign, featuring brand ambassador, athlete Katarina Johnson-Thompson.

Müller says that its overall approach to achieving category growth is to strengthen its core brands, develop a leading private label proposition and innovate to target the 46% of the yogurt category where the brand has limited or no presence.

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STRATEGY

Fonterra reports annual loss, unveils new strategies to drive profitability NEW ZEALAND – Fonterra reported an annual loss of NZD 605 million ($380.1 million) for the year to July as the dairy cooperative struggled with writedowns across its business amounting to NZD787m (US$497.4m).

Fonterra witnessed a tough financial year as reflected by loss widening by 208% from last year’s loss of NZD 196 million ($123.9m), which has seen the dairy company embark on reviewing its business in a bid to drive profitability.

Last year, Fonterra set out a three-point plan: take stock of the business, get basics right and ensure more accurate forecasts which Hurrell notes that it definitely helped focus the Co-operative.

As part of taking the stock taking strategy, the company reviewed its asset portfolio and made significant calls on three assets including the sale of Tip Top for NZD380 million (US$240.1m) and offloading the stake in DFE Pharma for NZD633 million (US$240.1m).

Fonterra wound back its relationship with Chinese infant formula maker Beingmate and is now looking at options to reduce our financial stake in the company.

“Taking stock of our business didn’t stop there. We also exited our Venezuela businesses, announced the closure of our Dennington manufacturing site in Australia and kicked off a strategic review of DPA Brazil and two of our farm-hubs in China.

“As part of the three-point plan, we also set a goal in FY19 to reduce our debt

by NZD800 million. Tip Top made a significant contribution and, along with the sale of DFE Pharma, we expect to exceed this target in FY20.

“We also set ourselves a target to reduce capital expenditure by NZD200 million in FY19 and we achieved NZD261 million.

We reduced our operating expenses by NZD185 million, year on year,” Hurrell said.

New strategy unveiled Going forward, Fonterra has now unveiled a new operating model and organization strategy introducing a new customer-led operating model to best deliver the new strategy.

OUR STRATEGY WILL SEE US FOCUS ON WORLDCLASS DAIRY INGREDIENTS FOR OUR CUSTOMERS AROUD THE WORLD, AND INNOVATIVE INGREDIENTS THAT MEET NUTRITION NEEDS RIGHT ACROSS PEOPLE'S LIFE STAGES

This will see the co-operative move from a two central businesses; ingredients, and consumer and foodservice to a three

customer facing-sales and marketing business units.

The three units will include Asia Pacific (APAC); Greater China (GC); and Africa, Middle East, Europe, North Asia, Americas (AMENA).

In line with that the Fonterra has appointed Judith Swales as the new CEO for the APAC unit and Kelvin Wickham to head the AMENA region while Marc Rivers will remain the CFO, Deborah Capill as MD People and Culture and Mike Cronin as MD Co-operative Affairs.

“Our strategy will see us focus on world-class dairy ingredients for our customers around the world, and innovative ingredients that meet nutrition needs right across people’s life stages.

“We will focus on ingredient categories: Paediatrics, Medical and Ageing, Sports and Active, and Core Dairy. This focus on dairy ingredients and foodservice will see us playing to our strengths and driving more value from the parts of our business that consistently perform.”

“We will also create new opportunities in new ways for foodservice. This will include building on our foodservice success in China and developing new markets, particularly in Asia Pacific.

“This focus on dairy ingredients and foodservice will see us playing to our strengths and driving more value from the parts of our business that consistently perform.”

M&A

Carrefour pulls back from China business as local company buys US$670m stake CHINA – Chinese retail giant, Suning has completed acquisition of 80% stake in French supermarket Carrefour’s China business in an all cash transaction worth 4.8 billion yuan (US$670 million).

The deal was announced in June this year in a move that the Nanjing-based Suning said would help the retailer to tap online food sales and expand its physical presence.

“This is a key step in Suning’s smart retail plan. Carrefour’s FMCG experience and supply chain capabilities can be integrated with Suning’s full-scenario retail model, solid logistics network and advanced technology,” said Zhang Jindong, chairman of Suning Holdings Group.

“With our smart retail capabilities, Suning can transform the Carrefour stores into fully integrated online-and-offline supermarkets to meet evolving consumer demands.

“The comprehensive digitization

of retail elements is the first priority of traditional retail industry facing future development.”

Following the transaction, with Tian Rui, Vice President of Suning has been appointed as the new chief executive of Carrefour China business. Moving forward, Suning has unveiled a new business development plan for Carrefour China.

Zhang Jindong confirmed that Carrefour China will open 300 new stores in China’s tier 1-3 cities over the next five years.

He also revealed that Carrefour’s Chinese brand and operation will remain independent, while benefiting from Suning’s retail cloud model, open technology, logistics and supply chain capabilities to better access the lower tier markets.

In the future, Carrefour stores in China will also incorporate other Suning assets.

Ultimately, Suning seeks to create a onestop community center, integrating goods, services, experience and leisure.

The transaction represents the latest acquisition by Suning following those of Dia China and Wanda Department Stores, as Sunning continues to accelerate the expansion of its brick-and-mortar portfolio for its full-scenario retail model.

Analysts are positive about the synergies brought by the acquisition, which will further enhance Suning’s competitiveness by accelerating the company’s development in the FMCG category, enriching its smart retail portfolio, and helping reduce procurement and logistics costs.

With a presence in China dating back to 24 years, Carrefour China operates a network of 210 hypermarkets and 24 convenience stores, covering 22 provinces and 51 large and medium-sized cities. In 2018, it generated net sales of nearly RMB 30 billion (US$4.21bn).

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INVESTMENTS

Coca-Cola plans US$1bn investment in Southern and East African regions AFRICA – The Coca-Cola Company plans to invest US$1 billion in its Southern and East Africa region operations over the next five years.

Speaking during the World Economic Forum (WEF) on Africa conference in South Africa, president South and East Africa business unit, Bruno Pietracci said that the local market still held great potential for the group. Pietracci noted that the Southern and East Africa region was already one of the top 10 regions for the group in the world in terms of size, both in terms of volume and profit.

The company plans to use the US$1bn investment on the introduction of new products, expansion of its capacity and distribution network, innovations and to support the group’s brands. Coca-Cola believes Africa will be a very important growth engine for the group in the next five to ten years both for the sparkling and clear drink markets. As a region, the group was growing in single digits, generally in terms of volumes and profit, but there were some countries where the group was growing in double digits. However in some countries, such as Zimbabwe, the growth was very low.

Pietracci called for renewed cooperation between the public and private sectors in the region, which he believed would be essential for African countries to grow in the future. He cited, as an example of a successful private and public sector partnership, Coca-Cola’s Petco recycling programme of plastic beverage bottles that was started in South Africa in 2004.

The programme had also been introduced to Kenya and was in the process of being rolled out in Tanzania and Ethiopia.

The project, apart from recycling almost two-thirds of the plastic bottles filled by Coca-Cola in South Africa, also provided a source of income for some 60,000 people, said Pietracci. He said the 4th industrial revolution would enable a group like Coca-Cola and its bottlers and franchises to use more sophisticated processes to provide more solutions for consumers and customers. Pietracci also cited the publicprivate sector partnership as a major step by the government to reduce sugar intake for health reasons, a trend that was likely to continue.

20 OCTOBER 2019 | FOOD BUSINESS AFRICA

REGULATORY

European brewers to include ingredient and calorie counts on beer labels

EUROPE – European beer producers have committed to add ingredients and calorie information on all beer bottles and cans in the EU market by 2022.

This follows the recently signed a memorandum of understanding (MoU) between the brewers and the European Commission to provide clear information regarding ingredients and energy values on labels. The voluntary MoU was officially signed by the Brewers of Europe – which brings together national brewers’ associations from 29 European countries – on behalf of the representative body for drinks manufacturers and suppliers in Ireland.

According to Patricia Callan, director of Drinks Ireland, brewers in the Irish market have been rolling out ingredients and energy labelling on a voluntary basis. The new commitment, she notes, demonstrates “a strong commitment by brewers in Ireland and across the EU to provide this information, with ambitious timelines for delivery.”

Pavlos Photiades, president of The Brewers of Europe, said: “This is a significant step in a process we started four years ago, demonstrating our members’ ambition to ensure all beers label ingredients and calories. Fulfilling this commitment, Europe’s brewing sector is meeting the expectations of consumers on how alcoholic beverages should be providing ingredients and calorie information.”

Thirty-seven initial signatories, including 25 national brewers’ associations, have put their names to the MoU and the Brewers’ Ambition 2022. According to Brewers of Europe, the purpose of the MoU is to ensure that companies take public responsibility for the declaration of ingredients and energy information on the labels of their products.

The MoU is open to companies and associations from all alcoholic beverage sectors, provided that the signatory fully endorses the MoU and its commitment to the on-pack labelling of both ingredients and energy values. “The ultimate wish is that consumers receive understandable, recognisable, comparable and accurate information for all alcoholic beverages.”

While beer is exempt from EU food labelling regulations, those who do provide such information voluntarily must follow the same rules as food and non-alcoholic beverages.

M&A

AB InBev’s Carlton & United Breweries enters wine category with Aussie wine maker buy AUSTRALIA – Brewing giant Carlton & United Breweries, a subsidiary of AB InBeV has acquired Australian wine company Riot Wine Co, for an undisclosed sum.

The deal marks Carlton & United Breweries’ entry into the wine category, expanding outside its key beer portfolio which includes Foster’s and Victoria Bitter and craft acquisitions Pirate Life and Four Pines. Founded in 2016, Riot wine sells wine exclusively in kegs and cans and has significantly grown its wine concept by encouraging consumers to switch from bottles to aluminium cans and steel kegs.

Riot co-founder and general manager Joe Cook said that the entry of the company in the alcoholic market was aimed at starting a wine revolution in Australia by getting venues and consumers to switch from bottles to steel kegs and cans.

“Wine drank this way is fresher and easier plus it’s more sustainable because one keg saves roughly 23,000 bottles from

entering the environment. Our kegs prevent wine oxidising and our wine has a fun and fresh taste profile, with less sulphur making it cleaner than traditional wine,” Cook said.

Carlton said it planned to invest further into the Riot business, by helping the company upgrade its cellar door and a new canning line in the inner western Adelaide suburb of Brompton. creating a revamped hospitality space with food and wine. Rose Scott, CUB Sales VP for Australia and NZ, said: “Riot Wine Co has witnessed rapid expansion in just three years, an indication that venues and retailers have confidence in the business. We plan to accelerate the expansion of this growing business through our large on-tap network and more than 100 years of draught experience.

Under the agreement, Riot’s management would stay on to run the business, which has a big ”sustainability” focus. Riot was originally established by Joe Cook and Tom O’Donnell.

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M&A

Firmenich to acquire minority stake in French-based flavor company Robertet SWITZERLAND – Leading flavors and fragrance company, Firmenich has secured a deal to acquire 17% stake in French based flavor firm Robertet.

The swiss company reached the agreement with First Eagle Investment Management to acquire the stake held by its advisory clients in Robertet at a price of €683.30 per security.

Robertet produces a wide range of flavours for customers in the food industry, and operates 15 manufacturing sites around the world.

Commenting on the deal, Patrick Firmenich, Chairman of the Board of Firmenich said, “Firmenich has the greatest respect for Robertet, with its family values, long term vision of the industry and leading capabilities in natural ingredients.

“As a long-term oriented shareholder, this investment reflects Firmenich’s commitment to best support Robertet’s continued growth.”

Gilbert Ghostine, chief executive officer of Firmenich added, “With its strong naturals portfolio in Perfumery, Flavors and

Ingredients, Robertet is well positioned to benefit from consumers’ continued demand for authentic natural products.

“This investment is fully in line with our vision for sustainable and natural solutions.”

Firmenich said that it is prepared to be a passive long-term shareholder of Robertet alongside the Maubert Family and welcomes discussions for a larger participation or establishing a broader collaboration to support the long-term success of the company.

“Firmenich may also consider taking a controlling interest in Robertet,” the company said in a statement.

Investing sustainably At the United Nations Climate Week, Firmenich engaged with leading businesses and heads of state to accelerate the race for climate.

Committed to limiting the global temperature rise to 1.5°C, Firmenich is making its inclusive capitalism business model work for the planet, supported by ambitious science-based targets.

FIRMENICH SAYS IT IS PREPARED TO BE A LONG-TERM PASSIVE SHAREHOLDER IN ROBERTET BUT MAY CONSIDER TAKING A CONTROLLING STAKE IN THE FRENCH COMPANY IN THE FUTURE “Stepping up leadership and measurable actions to tackle climate change is a necessity. Business, government and society need to shift gears and work together for exponential climate progress,” Ghostine said.

“With our science-based targets, we are making great inroads on our vision to be carbon neutral. For instance, today we operate exclusively with renewable electricity across Europe, North America and Brazil and are well on our way to achieving 100% worldwide by 2020.”

NUTRITION

UK food industry makes further progress on sugar reduction

UK – Public Health England (PHE) has published its second-year highlighting the progress made by the food industry to voluntarily reduce sugar in everyday foods-indicating that food manufacturers have scaled up their efforts in the drive.

According to the report, ‘Sugar reduction; progress between 2015-2018’ retailers and manufacturers had managed an overall sugar reduction of 2.9% (in sales weighted average sugar per 100g) over the period.

The reduction has been recorded in both the in home sector and out of the home sector including restaurants, pubs and cafes) in foods contributing the most sugar to children’s diets, such as cakes, breakfast cereals and sweets. The out of home sector, where data is more limited, achieved a 4.9% sugar reduction (simple average sugar per 100g). According to the report, the out of home sector has made more progress.

However, some food categories have shown greater progress than others. Notably, 22 OCTOBER 2019 | FOOD BUSINESS AFRICA

retailer own brand and manufacturer branded yogurts and fromage frais, and breakfast cereals have reduced sugar by 10.3% and 8.5% respectively.

In addition, the report also looks at progress made under the Soft Drinks Industry Levy (SDIL), showing a 28.8% and 27.2% reduction per 100ml in retailer own-brand and manufacturer-branded products and drinks consumed out of home respectively. A total of 30,133 tonnes of sugar were removed without reducing soft drink sales, resulting in around 37.5 billion fewer kilocalories sold in sugary drinks each year.

Overall the total tonnes of sugar sold in foods included in the reformulation programme from the in-home sector has increased by 2.6% between 2015 and 2018(excluding cakes and morning goods), whereas the sugar sold in soft drinks subject to SDIL has decreased by 21.6%.

Duncan Selbie, Chief Executive of Public Health England, comments: “We are seeing some encouraging progress from the food industry.

“Our second year report shows some food categories reducing sugar faster than others but this is realistic at this early stage.

We are confident that the industry as a

whole understands their responsibility to step up and deliver for children and their families.”

Selbie noted with concern that a third of children leave primary school overweight or obese, while severe obesity in Year 6 children has now reached an all-time high.

“To help them play their part in addressing this, businesses have 3 options to meet the 20% ambition: reduce sugar levels (reformulation), produce smaller portions, or encourage consumers to purchase lower or no sugar products,” Selbie said.

Progress vs Target In March 2017 PHE published guidelines for the total sugar content per 100g and for the calorie content of products likely to be consumed in a single occasion for the food categories included in the sugar reduction programme.

These were designed to help industry achieve the 20% sugar reduction ambition accompanied by reductions in calories where possible.

In addition, PHE said it was undertaking final work towards setting guidelines for the foods to be included in its calorie reduction programme, for which a 20% reduction target has been set by 2024.

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OCTOBER 2019 | FOOD BUSINESS AFRICA

23

INNOVATIONS

Namibia Breweries launches first locally brewed non-alcoholic beer

NAMIBIA – Namibia Breweries Limited (NBL) a subsidiary of the Ohlthaver & List (O&L) Group has launched Windhoek Non-Alcoholic beer with less than 0.5% alcohol.

The beer, which is Namibia’s only nonalcoholic beer brewed locally, was inspired by the companies strive of tapping into new global markets and by the consumers evolving taste. The new non-alcoholic beer is an addition to the breweries premium Windhoek range which include Windhoek Lager, Windhoek Draught and Windhoek Light, all brewed in accordance with the stringent German Reinheitsgebot.

“Innovation within all spheres of our business is a strong focus for NBL and supports both volume growth and bottomline performance as we continually strive to be ahead of the curve in meeting the ever-changing needs of consumers,” said NBL Managing Director, Marco Wenk.

It is important that we keep up with the trends, as a leading beverages producer in Namibia and the world, and also that we do not allow ourselves to be limited by the economic challenges faced today. But that we persevere and remain passionately dedicated to owning the future, creating new realities and enjoying the journey,” Wenk stated at the presentation of the NBL Financial Results for the year ended 30 June 2019.

The breweries delivered a strong financial performance in 2019 with revenues increasing by 15.3% to N$3 billion (US$200m) and overall volume growth of 13.8%. The company noted that, for the first time in three years, volumes in Namibia started picking up again, delivering 3.9% growth on 2018 against a recessionary backdrop. Operating profit of the company went up by 6.3% to N$652 million (US$43.52m).

Almost 50% of the group’s profit came from NBL’s investment in Heineken South Africa which returned to profit after incurring a series of losses. According to the company, volume growth to South Africa reached a stellar 44.8% while export volumes decreased by 31.2%.

24 OCTOBER 2019 | FOOD BUSINESS AFRICA

INVESTMENTS

Arla Foods scales up commitment to develop a sustainable dairy sector in Nigeria NIGERIA – Arla Foods, Denmark-based dairy firm has partnered with the Kaduna State Government in Nigeria to establish a dairy development programme that aims at developing the dairy sector.

To strengthen the private-public partnership, Arla Foods, the Federal Government and Kaduna State Government have signed a a memorandum of understanding to develop of a long-term sustainable dairy industry in the country.

The agreement will benefit 1,000 small scale farmers through the provision of necessary infrastructure while Arla as the commercial partner, will buy the milk, collect, process and bring it to market.

Kaduna state and the federal government have committed to improving the structural conditions for the livestock farmers in the region. Securing the infrastructure such as roads, power and water, which are necessary to process and bring the milk to market, is also part of the public commitment. Arla will invest in establishing milk collection centres.

Steen Hadsbjerg, vice president, subSaharan Africa region for Arla Foods, said the partnership will build Nigeria’s dairy sector and “achieve Arla’s ambitions in West

Africa”. The project will primarily be funded by loans provided by the Central Bank of Nigeria (CBN) and guaranteed by the local state. The collaboration works on a fiveyear project – the Milky Way Partnership – to develop a socially, environmentally and economically sustainable dairy value chain.

This new public-private partnership builds on the success of a collaboration initiated in 2016 with Kaduna state, the federal government, Arla and several NGOs including the Danish Agricultural and Food Council.

Arla’s move comes after the government of Nigeria’s recent move to stop the provision of foreign exchange to importers of dairy products to force them to develop local production of milk, that has been roundly criticized by industry stakeholders.

M&A

Chinese dairy Mengniu to acquire Australian infant formula maker for US$1bn

CHINA – Mengniu Dairy, one of China’s largest dairy companies has offered to acquire Australia’s leading organic infant formula producer, Bellamy’s for approximately AUS1.5 billion (US$1 billion).

The deal will see Mengnui add to its portfolio one of the premium brands in the fast growing infant formula market, in a country which ranks as the world’s largest importer of infant formula products.

Currently, Bellamy’s does not have a licence to operate within the Chinese market from China’s State Administration of Markets/Regulations (SAMR) and is pursuing entry into the market. The offer

from Mengniu would not change the likelihood of Bellamy’s receiving Chinese approval. Mengniu stated that it will seek to increase the company’s sales in Australia and throughout the Asia Pacific region, if the transaction is approved. The deal will help Mengniu extend its portfolio into premium products boosted by its presence in the sector through the controlling stake it holds in lower-end maker, Yashili International Holdings Ltd. Bellamy’s CEO, Andrew Cohen, noted that the Chinese dairy firm is a pre-eminent dairy company in the Asian country and an ideal partner for its business. He said that the transaction could further deliver on Bellamy’s founder’s original vision of a truly iconic Australian brand and ‘A Pure Start to Life’ for the world.

Mengniu has been eyeing overseas acquisitions as China’s appetite for milk and infant formula grows with its middle class.

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INVESTMENTS

India’s Luxmi Tea to invest US$30m in Rwandan unit to expand processing capacity

RWANDA – Luxmi Tea, an India based tea processing company, will be investing between US$28 million and US$30 million in its Rwandan subsidiary, Rugabano Tea Factory to ramp up processing capacity.

Luxmi unveiled the investment plan during the inauguration of the plant in Karongi District, Western Rwanda, making it the first Indian firm to set up a greenfield project in tea processing in the country.

Rugabano Tea currently has an installed capacity to produce 1,000 metric tonnes per annum of premium black tea for the export market. Through the investment, Luxmi aims to enable Rugabano Tea factory reach its full capacity of producing 4,000 metric tonnes of processed tea every year in the next 10 years.

According to Rudra Chatterjee, the Managing Director of Luxmi Group, the subsidiary also aims to expand its portfolio.

The factory will have an industrial block of 438 hectares and an out-grower scheme of over 4,000 hectares. Luxmi Tea has partnered with The Wood Foundation Africa and DFID, who will be funding the project.

“Our goal is to make sure that Rugabano make the best tea in Rwanda,” Chatterjee noted, adding that they have invested in other tea estates, including Pfunda and Gisovu, where Luxmi and The Wood Foundation are majority shareholders, with a 50 percent stake in Pfunda and 90 percent in Gisovu.

The factory becomes the 18th tea processor operating in Rwanda after Sorwathe company, one of the oldest tea companies in Rwanda opened a new green tea factory in Kinihira, Rulindo district in the country’s Northern Province in last year.

In Africa, Rwanda leads the list of countries where consumption is expected to show higher growth at the rate of 9%, followed

by Uganda, Kenya, Libya, Morocco and Malawi.

26 OCTOBER 2019 | FOOD BUSINESS AFRICA

INVESTMENTS

University of Idaho to develop largest dairy research facility in the US USA – The University of Idaho in Idoha, Northwestern US, will be raising US$45 million to facilitate development of the largest and most advanced research center in the US, targeting the dairy and allied industries.

The Center for Agriculture, Food, and the Environment (CAFE) is currently being designed at the university, with plans for large scale research. The facilities will be focused on research, dairy production, public outreach and food processing, supporting a sustainable dairy production system in a semi-arid environment. The center will house 2,000 cows, alongside a demonstration farm for nutrient management research and a discovery complex for agro-tourism.

Jim Miller, director of developmentat the university said that the planned research and outreach facilities seek to address the top agricultural commodity in the state and provide relevant research for producers.

As a part of the main dairy, CAFE will consist of 1,200 additional acres for agronomic research, feed production, and nutrient management, studying the

interactions between dairy and water and soil health.

The facility’s animal and environmental research unit will aim at addressing concerns like determining the best practices for animal health and welfare with highquality milk production. It will also focus on implementing robotic systems into herd management and milking as well as lowstress handling and transportation.

“CAFE research will improve sustainability in the industry by enabling producers, dairies and food processors to adopt practices and policies to meet the sustainability requirements of their customers,” a report from the university notes.

The research centre will also address the economic, social and cultural sustainability of rural communities and diverse populations as well as the quality and sustainability aspects as impacted by the dairy industry.

The university said that it will also encourage the development of innovative new food products and product attributes, along with identifying new market opportunities nationally and internationally.

M&A

South Africa’s Zeder Investments acquires stake in East African Seeds Company SOUTH AFRICA – Zeder Investments, a South African agribusiness group, has secured an agreement to acquire 40 percent shareholding in East African Seeds (EAS) Company.

The investment in EAS, a seed company with operations in Kenya, Tanzania, Uganda, Rwanda and Zambia is expected to support Zeder’s expansion in East and Central Africa. The PSG-controlled agribusiness giant said that its subsidiary, Zaad had identified East and Central Africa as an important growth area for both seeds and agrochemicals. Zaad operates as the company’s agri-input firm and has holdings in companies that specialise in seed production, plant nutrition and agrichemicals.

The group also said that the introduction of Zaad’s seed products and genetics will enhance the profile of the EAS group of companies. The deal whose value has not yet been disclosed also gives Zeder and option of acquiring an additional stake in future.

THE INTRODUCTION OF ZAAD’S SEED PRODUCTS AND GENETICS WILL ENHANCE THE PROFILE OF THE EAS GROUP OF COMPANIES WITH AN OTPTION OF ACQUIRING ADDITIONAL STAKE IN FUTURE Zeder, which has substantial stakes in listed food business is also expected to fetch US$412 million from the sale of its 28.23% stake in Pioneer Foods to US multinational food company, PepsiCo. Zeder also holds significant shareholdings in several food and beverage companies including in Quantum Foods, Capespan, Kaap Agri and Agrivision Africa.

In April this year, the agribusiness conglomerate said that the companies under its control were open to making acquisitions citing that some of their competitors are being revaluated.

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INVESTMENTS

REGULATORY & POLICY

Central Bank of Nigeria adds cassava to forex ban to Zambian agribusiness firm to invest US$200m in a palm scale up efforts to capacitate local food industry NIGERIA – The Central Bank of Nigeria oil project

ZAMBIA – Consolidated Farming Limited, subsidiary of Sable group, will be investing US$200 million in setting up a large -scale palm oil processing industry in Luapula Province, Zambia.

The investment will also cover a 10,000 hectares anchor farm and an out-grower scheme. The company’s director Essof Alloo said that upon completion of the project, the company will be producing palm oil as edible oil for both the local and Great Lakes markets.

The company will initially set up a 100 hectares oil palm nursery in Mbereshi area before the 2019/20 rainy season, Mr. Alloo said. This will be followed by planting of 2000 hectares every year for the next five years totalling 10,000 hectares.

Chilangwa was confident that the project will succeed owing to the favourable climatic conditions that supports the growth of oil palms citing the Luapula River valley as the best place that will support the plantation.

The Sable group is a diversified investment firm in Zambia with businesses in sugar production and milling, commercial farming of maize, soya beans, and wheat, and cattle farming. The company’s sugar operations are run through its subsidiary, Kafue Sugar, under the management of Consolidated Farming Limited. Kafue Sugar controls about 30% of Zambia’s sugar industry, with the remainder being held by its biggest competitor, Ilovo Sugar.

In total the Sable group operates about 18,400 hectares of farm land in Lusaka and Sinda. The investment in the oil palm industry will further support its diversification strategy.

28 OCTOBER 2019 | FOOD BUSINESS AFRICA

(CBN) has introduced a new policy to further augment the country’s efforts of developing the local food industry.

After the recent ban on use of Bills for Collections as means of payment for milk importation and its related products, the Bank has now added cassava and its derivatives (starch, ethanol and others) to forex restriction list to boost production.

The move is aimed at improving local production as the country seeks to gears up to becoming self-sufficient in cassava production, one pf the major commodities in the country’s food basket. Despite Nigeria being the largest world producer of cassava tubers, the west African country still spends more half a billion dollars (US$600 million) annually on importation of cassava and its derivatives, due to low yields averaging 20 tonnes/hectare, which the CBN Governor notes with concern is very low compared to other countries.

To improve the cassava seed productivity, the bank is collaborating with the International Institute for Tropical Agriculture (IATA) on the production and supply of cassava cultivars that can increase yield up to 40 tonnes.

The forex restriction is also an initiative of the CBN seeking to improve cassava productivity, stabilize prices and encourage local processing to generate employment, among other collaborations with states.

Mid this year the bank introduced a new policy restricting the sale of foreign exchange to milk importers with an aim

of stimulating investments in local milk production. Nigeria’s local milk production capacity is unable to meet the country’s annual demand. According to the Bank, over 95% of milk products consumed in the country is imported consuming about US$1.5 billion annually. Against the estimated annual milk demand of about 1,300m metric tonnes, Nigeria local dairy production currently stands at 700,000 metric tonnes, leaving a supply gap of 600,000 metric tonnes.

To change the narrative, the Bank has supported four dairy products manufacturers have commenced local production of milk under the livestock development initiative by the Niger state in partnership with the Central Bank of Nigeria. The four companies targeted under the initiative are Friesland Campina WAMCO, Neon Agro, Chi Limited and Irish Dairy who have expressed interest to invest in Bobi Grazing Reserve in Niger State.

INVESTMENTS

China Development Fund to co-finance US$100m cocoa processing plant in Ghana GHANA – The Ghana Cocoa Board (COCOBOD) has entered into a public private partnership with the China Development Fund and Genertec International Corporation to establish a cocoa processing plant at Sefwi Wiawso in the Western region of Ghana estimated to cost US$100m.

The main financier of the project is the China Development Fund and construction is expected to commence in the first quarter of 2020. Once completed it is expected to process about 40,000 metric tonnes of cocoa beans for export to the Chinese market.

It will benefit cocoa farmers, open rural economy for the community and strengthen the cocoa supply chain by increasing productivity and value addition

of the product to be competitive in the emerging world market.

According to Mr Joseph Boahen Aidoo, the Chief Executive Officer of COCOBOD the country is hoping to expand its production from the current 850,000 metric tons to 1.5 million metric tons annually in the long term. In addition, the country also seeks to convert waste from cocoa beans that accounts for 20 per cent of the total volume into organic substance for domestic use.

Endorsing the partnership, Mr Aidoo said the project is a Sino-Africa model, the first of its kind in the Africa region and was excited to witness the signing ceremony as way of exploring business opportunities for the two countries.

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PEOPLE

Kenya’s standards body appoints Bernard Njiraini as managing director

KENYA – The Kenya Bureau of Standards (KEBS), the government agency responsible for governing and maintaining the standards and metreology has appointed Bernard Njiraini as its Managing Director, for a three-year term.

Bernard Njiraini was serving as KEBS acting managing director since May this year, taking over from Mr. Bernard Nguyo – who was also in an acting capacity. Njiraini holds a BSc. degree in Mechanical Engineering from Jomo Kenyatta University of Agriculture and Technology and a Master of Science in Mechanical Engineering from the same University. He also holds Post Graduate Diploma in Strategic Studies from the University of Nairobi. He is also a member of the Institution of Engineers of Kenya (IEK).

Mr. Njiraini is also the managing director of the Numerical Machining Complex for three years, a position he took early this year in January. Prior to his appointment, he was a Production Manager at the Kenya Ordnance Factory Corporation (KOFC).

In his new capacity, Njiraini is expected to streamline the agency’s operations – that have come under scrutiny in the recent past.

This has seen former managing directors ousted from office in unclear circumstances following claims of corruption.

30 OCTOBER 2019 | FOOD BUSINESS AFRICA

M&A

Kenya’s Quickmart Supermarket merges with Tumaini Self Service KENYA – Mauritius-based private equity firm Adenia Partners has concluded a deal to acquire majority stake at the emerging retailer Quickmart Supermarket through its special purpose vehicle Sokoni Retail Kenya, at an undisclosed amount.

Sokoni Retail Kenya holds the controlling stake in Tumaini Self Service.

The transaction will see Sokoni merge the operations of Quickmart and Tumaini Self to form a single retail operation under Quickmart brand name. The process has already been approved by industry regulator Competition Authority of Kenya (CAK) giving the investor a stronger footing in Kenya’s competitive formal retail space.

Quick Mart Supermarkets has 11 branches operating in Nairobi, Nakuru and Kiambu counties while Tumaini has 13 branches in Nairobi, Kisumu and Kajiado counties. Through the merger, the company is set to create a network of 30 stores by the end of 2019 all located in the urban and peri-urban residential areas.

Commenting on the merger, Quick Mart managing director Duncan Kinuthia and his Tumaini counterpart Moses Nditika issued a joint statement stating: “The RESEARCH

merger will bring together two emerging retail chains both undergoing rapid growth. The combined company will create a network of 30 stores at the end of 2019, all located in convenient neighbourhood locations,” the joint statement read.

According to statement by CAK the transaction involved acquisition of over 50% of Tumaini’s shares. The combined turnover of the parties was over Ksh1 billion (US$10 million) for the year 2017, thus qualifying for the merger.

Mr Peter Kang’iri has been appointed as Group CEO and managing director to steer the transition and implement business strategy and expansion. The operational tie-up will be implemented over a period of approximately 12 months after the legal merger takes effect.

The merger is an indication that Kenya is still a promising spot for retail investments, benefiting from rising middle-class purchasing power and robust macroeconomic growth, even as the giants Carrefour and Shoprite take up their place as the leading international retailers in a market that was previously held by family owned retailers Nakumatt, Tuskys and Naivas.

SMEs control majority of food systems in Africa – AGRA study AFRICA – According to a recent report on 2019 Africa Agricultural Status by The Alliance for a Green Revolution in Africa (AGRA), 64% of food consumed across the continent is controlled by small and medium-sized enterprises (SMEs).

The report indicates that the SMEs drive “quiet a revolution” across the continent’s agriculture sector by connecting smallholder farmers to markets. The businesses include food processors, wholesalers and retailers, service providers from transport and logistics to the sale of inputs, which are often women-led. The report indicates that only about 20% of the food consumed in Africa fits the notion of subsistence agriculture, meaning food is consumed directly by farming households growing it. The other 80% comprises of food which flows through private sector value chains managed by SMEs. The SMEs purchase commodities directly from smallholder farmers, process, package, transport and sell the food products to consumers. This has been due to the mushrooming of urban developments

leading to 80% of the total food basket of rural Africa to be purchased through supply chains.

“This represents a shift from just decades ago. There has been a ‘quiet revolution’ in the agri-food private sector value chains, linking smallholder farmers to mushrooming urban markets. This has spurred farmers’ participation in food and farm input markets,” said Michigan State University’s Dr Thomas Reardon, a lead author of the report.

He further added that over the past 25 years, there’s been an 800% increase in the volume of food being moved from rural areas to African cities. Describing how African farmers and SMEs are ready, waiting and willing to expand into new areas, Dr Agnes Kalibata, the President of Agra, noted that SMEs are the biggest investors in building markets for farmers today, and will likely remain so for the next 10-20 years.

The report signals a renewed effort to bring SMEs into the light through investment and support to help them become vibrant and visible.

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RESEARCH

USDA invests in scientific research programme to promote sustainable agricultural practices

USA – The US Department of Agriculture (USDA) through the National Institute of Food and Agriculture (NIFA) has invested US$77.8 million in research that will focus on sustaining a more abundant, nutritious, and accessible food supply.

The funding will see eight landgrant universities lead projects aimed at integrating sustainable agricultural approaches covering the entire food

production system. USDA’s Deputy Under Secretary, Scott Hutchins says that the investment will enable adoption of climate smart agriculture techniques to ensure sustainable productivity in the sector.

“Investing in high-value research that promotes sustainably intensified agricultural practices, while addressing climate adaptation and limited resources, ensures long-term agricultural productivity and profitability,” Hutchins said. “This provides unprecedented opportunities for American farmers and producers. USDA continues to support our nation’s farmers through investments that help strengthen our rural communities.”

Western Illinois University, part of the eight universities leading these projects, will lead research aimed at developing pennycress as an oilseed crop that can be used as biofuel. The goal is to help farmers throughout the US Midwest Corn Belt and in other temperate-regions to grow pennycress as a winter-annual cash cover crop. Pennycress is a unique, high-yielding oilseed crop that can provide environmental benefits including reducing nitrogen runoff and preventing soil erosion.

Also participating in the research, the New Mexico State University will focus on improving the efficiency of Southwestern ranches. It will be using systems models and linking the socioeconomic and environmental trade-offs associated with heritage cattle genetics, precision ranching and range finishing. This is expected to eventually help Southwest producers find more economical and sustainable ways to raise beef cattle using precision farming techniques.

North Carolina State University will be leading a multi-institutional project that focuses on increasing crop productivity, conserving natural resources, and reducing the agro-ecological footprint using cover crops.

This research investment taps into creative intellect from 19 universities and scientific experts from USDA’s Agricultural Research Service.

This research investment is part of a new program within NIFA’s Agriculture and Food Research Initiative’s (AFRI) Sustainable Agricultural Systems program, the nation’s leading and largest competitive grants program for agricultural sciences.

RETAIL

Mark & Spencer to open first in-store urban farming in its UK outlet UK – Leading UK retailer Marks & Spencer (M&S) is on track to launch the first in store vertical farming in the UK as a response to avail more sustainably sourced fresh produce.

The retailer has announced that it is partnering with urban farming platform infarm to deliver a range of fresh produce grown and harvested in some of its stores starting with a newly reopened South West London store. It will subsequently roll out the model to a further six stores by the end of the year.

According to the retailer, each in-store farm unit uses 95% less water and 75% less fertilizer than traditional soil-based agriculture and is capable of producing the equivalent of 400 square meters of farmland. M&S says that this results in a more sustainable use of natural resources and ensures zero pesticide use.

Infarm’s farming technology combines highly efficient vertical farming units FOODBUSINESSAFRICA.COM

with the latest Internet of Things (IOT) technologies and machine learning to deliver a controlled ecosystem with the optimum amount of light, air and nutrients.

Each unit is remotely controlled using a cloud-based platform, which learns, adjusts and continuously improves to ensure each plant grows better than the last one.

INFARM’S FARMING TECHNOLOGY COMBINES HIGHLY EFFICIENT VERTICAL FARMING UNITS WITH LATEST IoT TECHNOLOGIES THAT DELIVER CONTROLLED ECOSYSTEM WITH OPTIMUM AMOUNT OF LIGHT, AIR AND NUTRIENTS.

“Infarm’s innovative farming platform is a fantastic example of what can happen when passionate agricultural, food and technology experts work together,” says Paul

Willgoss, Director of Food Technology, M&S Food. “We operate as part of a complex global food supply chain and want to understand the emerging technologies that could help provide more sustainable solutions, while also delivering fantastic products with exceptional taste, quality and freshness.” Erez Galonska, co-founder and CEO of infarm adds that London represents many of the sustainability challenges that people will experience in cities over the next several decades.

M&S is the first UK retailer to work with infarm and the partnership will be supported by the construction of a series of infarm distribution centers in and around London. infarm is one of the world’s largest urban farming platforms harvesting and distributing more than 200,000 plants each month across its network. It currently operates across Germany, Switzerland, France, Luxembourg and the UK, where it has deployed more than 500 farms in stores and distribution centers.

OCTOBER 2019 | FOOD BUSINESS AFRICA

31

RETAIL

Amazon India aims to eliminate single use plastic packaging by June 2020

INDIA – Amazon India, a subsidiary of American online retailer and technology company, has committed to eliminating single use plastic from its packaging in India by June 2020, as part of its long term sustainable packaging initiative.

The company is introducing environment friendly and fully recyclable packaging solutions ‘paper cushions’ to replace plastic dunnage like air pillows and bubble wraps across its fulfilment centers in

India. It has already launched the packaging in select fulfilment centers (FC) and will be extended across all FCs of Amazon in the country by the end of the year. In addition, the plastic currently used in packaging mailers and bubble bags is made of 20% recycled content, and is also recyclable.

Amazon India is also developing plastic free alternatives for packaging mailers, bubble bags, stretch wrap and tape used in the packaging which will help the company eliminate all forms of plastic used in its packaging. The company has further reiterated its commitment in collection and recycling of plastic packaging material, pledging to collect plastic, equivalent to all of the plastic packaging material used by the Amazon Fulfilment network in the

country from September 2019.

The company said it will also educate sellers who directly fulfil customer orders to curb their reliance on single-use plastic. In line with its commitment to sustainability, Amazon India launched PackagingFree Shipments (PFS) last year and has expanded to 13 cities in less than a year.

With packaging-free shipments, the company minimizes secondary packaging required for individual shipments by securing multiple shipments together in a reusable crate or a corrugate box. This move follows Flipkart’s announcement that it had already cut its reliance on single-use plastic by 25% and intended to move entirely to recycled plastic consumption in its supply chain by March 2021.

INVESTMENTS

Unilever invests in Kenya-based plastic recycler to expand operations KENYA – Consumer goods company, Unilever in partnership with DOB Equity and Global Innovation Fund (GIF) have coinvested in Mr. Green Africa, a Nairobi based recycler and recycled plastics supplier.

The investment will allow Mr. Green Africa to expand and build on the aggregation model which enables it to scale the trade of recyclables while building a strong and reliable supplier network.

It will also enable the company to increase its processing capacity and produce higher value recycled products in larger volumes to supply consumer goods companies.

Justin Apsey, Unilever East Africa CEO said that the Unilever’s strategic partnership with Mr. Green Africa has opened new frontiers in confronting the plastic challenge in a more collaborative and sustainable way.

Mr. Green Africa recycles and sells ethically sourced materials with a traceable social and environmental impact. It currently engages over 2,000 previously marginalised waste collectors and sells over 2,000 metric tons fairly sourced recycled materials for local and international markets.

ENERGY

Mr. Green Africa said that the investment will enable the company to expand its plastic recycling operations in Kenya, where only 10 percent of plastic waste is currently being recycled.

MR. GREEN AFRICA RECYCLES AND SELLS ETHICALLY SOURCED MATERIALS WITH A TRACEABLE SOCIAL AND ENVIRONMENTAL IMPACT AND CURRENTLY ENGAGES OVER 2,000 PREVIOUSLY MARGINALISED WASTE COLLECTORS The investment by DOB Equity, a leading Dutch family-backed impact investor in East Africa, is its second investment in the sector following a recent investment in Zanrec, a waste management company on Zanzibar. Saskia van der Mast, Investment Director of DOB Equity,said that the company expects the demand for recyclable materials in emerging markets such as Kenya to overtake that in developed countries.

Ardent Mills signs 25-year sustainable energy deal with US Solar USA – Flour milling and ingredient company, Ardent Mills has signed a 25year energy agreement with US Solar to purchase 1.8 million kWh of power annually under a subscription plan.

The deal, which supports US Solar’s Goodhue County, Minnesota solar gardens, is expected to reduce energy costs at its mill in Hastings, Minnesota.

Jeff Zyskowski, vice-president of supply chain at Ardent Mills and the senior leadership team sponsor regarding sustainability said that the agreement strengthens the company’s ambitions of investing sustainably. “These projects are in line with our commitment to sustainable energy and will further bolster the 32 OCTOBER 2019 | FOOD BUSINESS AFRICA

renewable energy market in Minnesota,” Jeff said. “Supporting renewable energy in any capacity is a priority for Ardent Mills and critical piece of our strategic plan for growth.”

Although the solar gardens will not directly power the mill, Ardent said its subscription plan, and the subsequent construction of the solar gardens, will bring more solar energy onto the local electrical grid.

Ardent Mills has built a team to conceptualize, research and implement projects that will make a positive environmental impact, including hiring a full-time Sustainability Lead, Phoenix Dugger. Last year, it also invested in

sustainable energy solutions in Kansas at its Newton and Wichita community mills.

The facilities enrolled in Westar’s new Green Energy Program, under which program they anticipate receiving a substantial portion of their energy from the newly-constructed Soldier Creek Wind Energy Center.

New recycling standards and electrical service upgrades are among the steps Ardent Mills has taken to reduce its environmental impact, according to a recent sustainability report released by the company in July. By choosing renewable energy, Ardent Mills estimates that it will reduce its total carbon footprint by over 29,000 metric tons each year.

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INVESTMENTS

British brewers achieve 42% reduction in CO2 emissions within 10 years UK – The brewing industry in the UK has attained 42% reduction in total C02 emissions in the last decade, representing a reduction of 202,952 tonnes- according to new research conducted by the British Beer & Pub Association (BBPA).

The research also found that during the 10-year period (2008-2018) the energy used to brew a pint of beer in the UK reduced by 20% while the water required to brew one hectolitre of beer has also reduced to an average of just 3.5 hectolitres. Separate data from the Environment Agency acquired by the BBPA also found that UK breweries

now recover and re-use 98% of their waste.

The research, published in a new report by the BBPA, called ‘Brewing Green: A Greener Future for British Beer & Pubs’, comes as the UK’s brewing and pub sectors begin setting their next sustainability targets to meet the UN’s Sustainable Development Goals.

According to the report, all pub operators surveyed by the BBPA stated that reducing food waste and improving energy efficiency was important or very important to them. In terms of food waste, all pubs surveyed said they had trained

staff on how to reduce food waste, with 86% now offering smaller portion sizes to customers to help further reduce waste. In addition, 83% of pub operators surveyed said they used insulated cellars in their pubs to reduce energy consumption while 71% noted that they had smart meters installed in their pubs.

Major brewing companies operating in UK including Heineken and Molson Cooors have underscored the role of brewers in helping to create a more sustainable future and committed to reducing their carbon footprint.

ENERGY

Chr. Hansen seals agreement to switch to 100% renewable energy in Denmark

DENMARK – Global bioscience company Chr. Hansen has entered into a long term power purchase agreement with Better Energy to ensure Chr. Hansen Denmark’s annual electricity usage is 100% covered by renewable energy.

The new 10-year agreement enables Chr. Hansen Denmark to utilize 100% green power from two new solar parks established

by Better Energy, which are scheduled for completion by April 2020. Energy Denmark will support the agreement by being responsible for creating a balance between consumption and production of

electricity and handling the difference that will always exist when the sun doesn’t shine.

In that way Chr. Hansen’s energy supply will be secured with power production from a mix of several other renewable sources like wind and biogas.

“We want to contribute positively to the transition to green energy,” says Annemarie Meisling, senior director of Sustainability, Chr. Hansen. “That is why we have decided to commit to a long term agreement to buy solar energy from two new parks so that our good bacteria and natural colors have a green footprint, both externally with our customers and on our home turf where some of our largest production sites are located.”

The agreement underlines Chr. Hansen’s commitment to a sustainable future and will create more green energy capacity to the benefit of all of Denmark.

Rasmus Lildholdt Kjaer CEO of

Better Energy says that the new agreement demonstrates how companies can assume joint responsibility for creating new energy from renewable sources to the benefit of the entire country: He noted that the agreement will see Chr. Hansen benefit from Better Energy’s solution including; competitive prices, direct association with specific solar parks and the subsequent creation of new renewable energy capacity in Denmark. Better Energy will establish and operate the new solar parks and sell the produced energy to Chr. Hansen at an agreed fixed price.

Chr. Hansen Denmark’s annual energy need corresponds to the consumption by almost 15,000 Danish households. Energy Denmark will match, on an hourly basis, Chr. Hansen’s consumption pattern with the energy production from a mix of several renewable sources to ensure balance.

PACKAGING

Molson Coors commits to achieving sustainable packaging by 2025 CANADA – Molson Coors Brewing Company has launched a new set of global packaging goals and plans to make 100% of its packaging reusable, recyclable, compostable or biodegradable by 2025.

Molson is strengthening its goals to drive down packaging emissions, use more recycled materials in its plastic packaging and improve recycling solutions in its key markets. The world’s seventh largest brewer is seeking to achieve at least 30% recycled content in its PET bottles, plastic film wrap and plastic rings.

As part of the commitments, which the company highlighted in its annual sustainability report, Molson is aiming to remove plastic rings from Carling and Coors Light cans sold in the UK by the end of March 2021, switching to 100% recyclable cardboard sleeves. The UK business also plans to remove the plastic film wrap from large multipacks by the end of March 2020, moving these packs into cardboard packaging.

“As a global brewer with a strong family heritage, we have always taken seriously our responsibility to brew a more sustainable 34 OCTOBER 2019 | FOOD BUSINESS AFRICA

future,” Molson Coors outgoing chief executive Mark Hunter said.

“Plastic waste poses a clear environmental challenge, and as a consumer-packaged goods company, we play an important role in helping to solve the global waste crisis.”

The report also details the company’s latest performance against its 2025 sustainable packaging ambitions and its recently approved science-based emission reduction target in line with the Paris Climate Agreement.

Molson Coors’s 2025 goal to lower absolute emissions by 50% within its direct operations was determined as ambitious enough to meet the requirements of the 1.5°C pathway. Additionally, the company says it has achieved zero waste to landfill at 17 of its brewing and manufacturing facilities, representing an improvement of three sites over the last year.

Molson Coors has also invested in technologies and education programmes to minimise water use on barley farms, research and development of specially bred barley strains, as part of a commitment to source 100% of its barley and hops from sustainable suppliers in key growing regions.

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FOODWORLD MEDIA PO BOX 1874 - 00621 Village Market, Nairobi, KENYA Tel: +254 20 8155022 | Cell: +254 725 343932 Email: info@foodworldmedia.net OCTOBER 2019 | FOOD BUSINESS AFRICA www.foodbusinessafrica.com

35

INVESTMENTS

Nestlé opens new research centre to accelerate sustainability agenda

SWITZERLAND – Food giant Nestlé

has inaugurated the Institute of Packaging Sciences, the “first-of-its-kind in the food industry”, to further reinforce the company’s sustainability agenda.

Located at Nestlé’s Research facilities in Lausanne, Switzerland, the Institute leverages the company’s existing research capabilities in food safety, analytics and food science. The new institute will enable Nestlé to accelerate its efforts to bring functional, safe and environmentally friendly packaging solutions to the market and to address the

global challenge of plastic packaging waste.

The Nestlé Institute of Packaging Sciences focuses on a number of science and technology areas, such as refillable or reusable packaging and simplified packaging materials. The facility will also focus on recycled packaging materials, high-performance barrier papers as well as bio-based, compostable and biodegradable materials.

The world’s leading food and beverage company has also announced its ambitions to achieve zero net greenhouse gas emissions by 2050. As part of its commitment to tackle climate change, the company has also signed the Paris Agreement to limit global temperature rise to 1.5°C, the “Business Ambition for 1.5°C.” In addition to the commitments, Nestlé poses that over the past four years, it has aligned its objectives with science-based targets to keep the temperature increase below 2°C. According to the company, the efforts build on a decade of work to reduce greenhouse

gas emissions and reflect its determination in playing a leading role in tackling climate change and build on a decade of work to reduce greenhouse gas emissions. Over the next two years, Nestlé says that it will lay out a time-bound plan including interim targets consistent with the 1.5°C path and review its progress annually to ensure it is on track.

THE NESTLÉ INSTITUTE OF PACKAGING SCIENCES FOCUSES ON A NUMBER OF SCIENCE AND TECHNOLOGY AREAS, SUCH AS REFILLABLE OR REUSABLE PACKAGING AND SIMPLIFIED PACKAGING MATERIALS.

To achieve its 2050 ambition, the Nestlé has laid outs some specific actions to include use 100% renewable electricity in its operation, scale up initiatives in agriculture to absorb more carbon and speedup the transformation of products.

STRATEGY

Mondelez International commits to sourcing 100% of cocoa from Ghana by 2025 GHANA – Mondelez International, world’s leading chocolate company, through its Cocoa Life Sustainability Programme plans to increase its 40% cocoa sourcing from Ghana to 100% by 2025.

The head of Cocoa Life Program in Ghana, Yaa Peprah Amekudzi said that to ensure the farmers produce cocoa of global standards, the chocolate maker has committed to support the farmers by strategically enhancing their performance using modern and mechanised farming PACKAGING

methods.

“Cocoa Life has been supporting farmers in the country to ensure they enhance productivity by shifting from manual farming to a modernised or mechanised farming,” she stressed. In this regard, Cocoa Life presented the first batch of 100 motorised trimmers worth US$1,000 to 50 farming groups to enhance their productivity. In addition, 29,116 registered farmers in 334 cocoa communities received about 18 million Ghana cedis (US$3.28m) for the 2018/2019 crop year as sustainability

premium to implement their development plans.

Cocoa Life is a sustainable programme which assists cocoa growing communities to strengthen their capacities by determining and achieving their own long-term goals geared towards driving economic development and prosperity.

According to Mondelez, 43% of its chocolate including Milka, Cadbury Dairy Milk, and Côte d’Or brands already carry the Cocoa Life logo, meaning they are made from cocoa that is sustainably sourced.

PepsiCo accelerates plastic waste reduction efforts with new commitment USA – Multinational soft beverage giant, PepsiCo has unveiled a new sustainability target seeking to reduce 35% of virgin plastic content across its beverage portfolio by 2025.

To achieve this, the company said it will be working towards increasing use of recycled content and alternative packaging materials for its beverage brands, including LIFEWTR, bubbly and Aquafina. The company also hopes to expand its SodaStream business to drive the avoidance of 67 billion single-use plastic bottles over next five years, furthering the company’s progress in reusable packaging. These targets advance PepsiCo’s sustainable packaging vision and reinforce its “Beyond the Bottle” strategy.

As part of the initiative, the company launched the mobileenabled Hydration Platform and other offerings that deliver beverages without single-use plastic bottles. The platform has seen the beverage company introduce its LIFEWTR brand packaged in 100% rPET (recycled polyethylene terephthalate), eliminate plastic bottles from its bubly brand and introduce aluminum can packaging for its Aquafina brand.

36 OCTOBER 2019 | FOOD BUSINESS AFRICA

“While our efforts are far from done, this is one more step in PepsiCo’s journey toward helping to build a world where plastics need never become waste,” said PepsiCo Chairman and CEO, Ramon Laguarta.

PepsiCo’s sustainable plastics vision is rooted in three pillars: Reducing the amount of plastics used, Boosting recycling rates, and Reinventing plastic packaging.

“We’re intentionally setting ambitious goals to drive meaningful progress,” said Simon Lowden, President, PepsiCo Global Foods, who leads PepsiCo’s Plastic Agenda. “PepsiCo is already one of the world’s largest buyers of recycled plastic, and if there was more available, we’d buy it – and if there were more markets where we could use it, we would. We are committed, and partnership is key.”

These targets builds upon the company’s already announced packaging goals to make 100% of its packaging recyclable, compostable, or biodegradable; and increase its use of recycled content in plastics packaging to 25% by 2025. PepsiCo said that the new targets are based off a 2018 baseline. In 2018, the company’s total virgin plastic volume use was 2.2 million metric tonnes.

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37

CAPWELL INDUSTRIES LTD: OUR 20 YEARS JOURNEY TO A FOOD & BEVERAGE COMPANY

CAPWELL INDUSTRIES LIMITED HAS GROWN ITS BUSINESS SINCE IT ENTERED THE FOOD INDUSTRY BY INVESTING IN A MAIZE MILLING PLANT 20 YEARS AGO. WITH A NEW DRIVE TO BE A FOOD AND BEVERAGE COMPANY, THE COMPANY RECENTLY INSTALLED A NEW 250 TONNES PER DAY WHEAT MILL AND HAS INTRODUCED KENYA’S FIRST CEREAL BEVERAGE DRINK. THE FOOD BUSINESS AFRICA TEAM SAT DOWN WITH THE COMPANY’S CEO RAJAN SHAH TO HEAR ABOUT THEIR JOURNEY AND FUTURE PLANS.

By Ronald Onsare

C

apwell Industries Ltd (CIL) is one of the most diversified food processing enterprises in Kenya. The company has been a trendsetter in the Kenyan market since it started out in 1999 as a maize miller and is setting its eyes on new products and new markets in the near future.

38 OCTOBER 2019 | FOOD BUSINESS AFRICA

The family has roots in Kenya running back over 100 years, after the company founder’s family moved from India to Kenya in 1911.

Dalichand Shah, who is the Chairman of the company, started his career in the industry in 1962 when he joined his brothers in the bakery industry where he remained until 1996 before starting the FOODBUSINESSAFRICA.COM

TRENDS

Capwell Group in 1999 which is headquartered in the industrial town of Thika, about 45 km from Nairobi.

CIL started off with maize milling in 1999, installing a 240 tonnes per day (TPD) plant to start off and four years down the line expanded the business into rice milling in 2003 and next were porridge flour and pulses product lines in 2007. “Over the years we have grown our capacity to nearly 400 tonnes per day (TPD) of installed maize milling capacity. Our milling capacity of rice is presently 100 TPD, for porridge flours is 60 TPD, while the pulses range has 100 TPD capacity,” Rajan Shah, the CEO explains.

The company operates two maize milling plants, a 270 TPD plant and a 120 TPD plant that was the acquisition from a neighboring miller. It has invested heavily in modern and technologically advanced milling systems and superior packaging machines for its products portfolio.

New technology wheat mill

In 2018, the firm that specializes in high quality flour, rice, pulses and porridges invested US$10 million in a wheat flour milling plant as part of its expansion strategy into the market. The new Alapala plant, equipped with pre-cleaning equipment and a storage silo with a capacity of 15,000 tonnes has a daily tonnage of 250 TPD. “We are now 1 year in wheat milling; before we were contract manufacturing then selling under our brand. Wheat is the second most consumed staple in the country, hence it would have been unfair if it wasn’t part of our product portfolio, because we wanted a whole range of staples. It is a tough segment because of the excess capacity/ overcapacity in the wheat milling industry. Demand is growing but not at the same rate as the capacity. One year on, we have introduced our wheat flour under the Soko brand and because we have a very strong brand promise under Soko, we will continue to fulfill that brand promise, a reason we are equally doing well with the Soko home baking flour,” Rajan speaks on their entry into wheat milling.

Rajan doesn’t really see their expansions in facility and product range as diversification but rather a horizontal integration of the company’s portfolio. “The objective of the company was to make sure that every meal that our consumers have has a component of Capwell products in it. When we started with maize meal, then rice and pulses, there was obviously a gap in that there were other staples that were not in there and it was a natural progression that we expand our portfolio to be present in all meals at the table,” he explains.

The firm has always taken a measured approach towards the integration and consolidation. Mr. Shah explains, “We are a riskaverse company. We don’t expand senselessly; we look at where we are, what the market needs are, what market potential exists and cautiously look at expanding. We also make sure that we are not over geared as a company to curb financial difficulties from overborrowing. Our strong team has contributed largely to this cautious approach towards building the business.”

Innovation mindset

“Innovation is one of our key values as a company and is one of our critical success factors,” says Rajan Shah. “Our focus on innovation is not only in terms of the product, but in terms of the people and processes as well. Our innovations have also enabled us to make our processes more efficient and to deliver better food safety, including improving testing methodologies that reduce aflatoxins and other contaminants,” the CEO added.

The company’s journey to an innovations leader has been instilled in the people in the organization by none other than the CEO himself.

The Research & Development (R&D) Manager, Charity Magwenzi, who leads the company’s product and process innovation efforts credits the CEO for the innovation focus that CIL has taken. “Our CEO is very hungry and restless. He is also brave and believes in the potential for innovation and its ability to enhance value and change the fortunes FOODBUSINESSAFRICA.COM

FOOD SAFETY

OPERATIONS

FORMULATIONS

REPORT

CIL STARTED OFF WITH MAIZE MILLING IN 1999, INSTALLING A 240 TONNES PER DAY (TPD) PLANT TO START OFF AND FOUR YEARS DOWN THE LINE EXPANDED THE BUSINESS INTO RICE MILLING IN 2003 AND NEXT WERE PORRIDGE FLOUR AND PULSES PRODUCT LINES IN 2007. of the company. The path to an innovations mindset has been long and arduous. Companies that want to join this journey have to take a longterm view and be prepared to face failures on their innovations journey, even as success comes through some of the innovation activities will fall short,” she advices.

“I have looked at the food industry keenly and I have noted that there is a clear difference between companies that take the innovations journey and those that don’t, especially if you look at their progress over 10-20 years. Those that have the innovations mindset and take the innovations journey aggressively outgrow and out-compete those that fail to do so. Many companies take R&D to be a risky part of business and as a cost centre and not as an opportunity to grow the business. We have the right spirit here and the CEO is our biggest supporter and leader. Am very excited that we have this support from the leadership of the company and feel a great sense of responsibility due to the faith put on me and my team and the entire company for us to take on this important task, which is to accelerate the company’s growth through innovation.”

To facilitate the delivery of an agile and efficient innovations platform, the company has invested in a dedicated R&D facility, where product prototypes development will be carried out under the leadership of Charity. “The facility has a dedicated team of R&D professionals that I work with to deliver on our core mandates, which are in the areas of new products development, line extensions and quality improvements, and process and formulation changes to exiting products.” Charity adds that by having a dedicated R&D team away from the common practice of combining QA and R&D, CIL has managed to give the two roles the space they need to focus on delivering their specific mandates, where the QA department has taken its conformity roles with more focus and drive to deliver safe food and ensure the company conforms to customer and regulatory requirements.

Innovative products grow

Through some of the actions that CIL has initiated over the years after listening to the customer, they have continued to have a good standing with the customers who have been vital to the success they enjoy currently. In remaining on song with their innovations, the firm launched ‘Amaize’, a premium fine quality maize flour in 2018. The flour has a steadily growing presence and space in the Kenyan retail shelves.

“The reason why we got into Amaize was because we saw a gap in the market. We wanted to begin from a very clean slate, we didn’t want to copy a competitor. There was a market segment for premium finer quality flour, which was not quite being fulfilled,” justifies Rajan. “We invested in technology towards ensuring that we got the right product.

For us it is a segment that is niche and not as big as the regular maize meal market. Nonetheless, there is a lot of positive feedback from consumers and the numbers can vindicate that and we’re positive it is a brand that is going to grow. Any brand we roll out, we always make sure that we give our full support and ensure that the consumer is getting a value preposition out of the brands.”

OCTOBER 2019 | FOOD BUSINESS AFRICA

39

The company has recently invested in a new state-of-the-art wheat milling plant to expand beyond the maize and porridge flours it has been making. Rajan says that the customers are excited by the Soko brand wheat flour, which also has a whole meal variant.

The latest buzz in the progressive firm’s innovation drive is ‘Yola’, a cereal beverage drink officially launched recently, making Kenya to join the cadre of African nations that have embraced these unique African drinks that are quite popular in the Southern African regions.

This is the first time the company has ventured into a completely new beverage category and by so doing they have now become a fully-fledged food and beverage company, illustrating the company’s confidence in the Kenyan market.

The quarter of a billion-shilling new product category investment is a strategic growth move that the firm has taken to expand the line of products they offer in response to an evolving Kenyan food culture, according to the CEO. Rajan had this to say on this latest introduction. “You could be wondering why we got into beverages. If you look at our vision and mission, we want to be the preferred food and beverage company.

It is not by accident that we have come up with this product Yola.

Two years of research and development have gone into developing this product through internal and external R&D, which involved the consumers to make sure we rolled out what the market is demanding.

It is a very unique product; the first in the country.

“It is made from maize flour, cultured milk and other nutritious components, thus offering a nutrition, energy and affordability prepositions. Those are the three premises we wanted the lower end of the pyramid to enjoy. It is a meal on-the-go effectively. As we even anticipate that the product will take care of the lower end of the pyramid, it is interestingly appealing to the middle-pack of the pyramid and we are very excited and positive about this development.”

Charity informs us that the journey to delivering Yola has been a long one, with a lot of learning on the way. “Developing Yola has been the toughest challenge I have faced in my career. I have never created a totally new product category in a new market. It was really difficult to decide on basically all the aspects of the product, for example the level of acidity, thickness, sweetness and texture. It took us time to get a consensus on the final product we wanted to go with to the market, 40 OCTOBER 2019 | FOOD BUSINESS AFRICA

and we have made small, minor changes whenever we thought there was a need for it.”

She adds that there is a growing consumer base for Yola in the Kenyan market, and it can only get better. “In a market that was so much used to the yoghurt taste, our consumers expected Yola to taste like yoghurt and were not prepared for the new taste, but in any market you tend to have early adopters and those that take their time to adopt

The company’s products include packaged maize flour, rice, pulses, spaghetti, porridge flours, wheat flour and cereal drinks FOODBUSINESSAFRICA.COM

MY FACTORY, MY STORY | CAPWELL INDUSTRIES LTD

The CEO (second left, front row) and the Founder and Chairman (third left, front row) with some of the top management team members from across the organisation.

to new ideas.” She adds that the company has learnt to be patient since they are clearing virgin territory with this breakthrough product, which has been made to the specific requirements of the Kenyan consumer. “We realised that we have to be prepared for the journey and keep up with the customer to a stage that they will be comfortable with the idea of our product, and that time is ahead of us.”

She reveals that the new cereal beverage plant has the same technology as the biggest comparable businesses around Africa. She attributes this to the management’s focus on not compromising on the quality of equipment sourced for the plant, focus on food safety and in keeping the reputation of the company when making the investment decisions and in choosing the suppliers of the plant.

Quality and technology of the future

Despite operating in a market where quality issues are commonplace, CIL prides itself in investing in the best technology and to operate in efficient and safe plants.

John Bosco Muthama, the Quality Assurance Manager says that the company delivers the highest quality of products to its growing consumer base across the country. He says that they have invested heavily in laboratory testing equipment all the way from raw material testing, in-process testing and for end product testing before they release the products to the market. He adds that while they do not currently have quality issues with their wheat intake, quality issues related to aflatoxins are a big challenge, and can only be solved when all the stakeholders work together.

“Our concern is that at the end of the day, the consumer in Kenya still consumes the maize that we reject from our plant due to aflatoxin problems. When we reject maize consignments, the dealers simply go into the next miller to sell the non-conforming maize.”

Our quality department is very vibrant here; we believe that a FOODBUSINESSAFRICA.COM

“WE ARE AMONG THE FEW IN THE INDUSTRY TO HAVE A FULLY-FLEDGED R&D FUNCTION WHICH WE HAVE TAKEN AS A CORE FUNCTION. IF YOU LOOK AT THE CORE VALUES OF OUR COMPANY, INNOVATION IS ONE OF THEM” strong QA department is the backbone to our company to deliver to the customers’ expectations. We also have young university graduates with fresh minds who are helping us in researching on new technologies emerging in the market so that we can adopt new ways of doing our quality and production management,” he adds.

Muthama, the Chief Miller, whose role is the day to day running of the mill and to ensure the end product is of high quality is full of praise for the new plant. The company has also installed 4 silos that enable it to mill adequate quantities of home baking flour according to the customer requirements, utilising a mix of imported and local wheat. Once milled, the flour is bagged through 2 Fawema packaging systems before being taken into the storage area awaiting dispatch to the market.

“This is a nice Turkish mill from Alapala. We have very good extraction rates of 78% and above and we produce regular wheat flour plus we have also commenced production of Atta flour. The plant is also very energy efficient and we are able to run the mill with a skeleton staff due to its high level of automation.” He has competent shift millers, electricians and mechanical fitters who are able to run the shifts on a day to day basis.

OCTOBER 2019 | FOOD BUSINESS AFRICA

41

IN NUMBERS

OVER 2500

THE NUMBER OF PEOPLE CIL HAS IMPACTED BY DIRECT EMPLOYMENT AND DISTRIBUTION THROUGH ITS SUPPLY CHAIN Expanding markets and products

The CEO is all smiles at the company’s new beverage plant. The introduction of Yola cereal beverage has thrown the miller into the liquid beverages business.

The company continues to recruit technical and commercial teams to ensure it can run professionally to meet rising demand and market requirements.

The production team is busy at work at the state-of-the-art beverages plant that was installed and commissioned recently.

42 OCTOBER 2019 | FOOD BUSINESS AFRICA

The company has over the years managed to provide its products to the majority of locations in Kenya, with the product available in major supermarkets, medium level supermarkets and kiosks. With strong partnerships with leading distributors all over the country, the company appreciates the great contribution its distribution partners have played in its success.

The company’s products are also to be found in neighboring countries in East Africa, especially in certain outlets in Uganda and Rwanda even though trade barriers have hindered their penetration into some of the regional markets.

“Part of our strategy is to grow regionally into neighboring countries. Our rice used to go across the borders but because of tariff issues we are not able to export our rice into Uganda and Tanzania.

The duty imposed made it uncompetitive. As a company, regional markets are part of our growth agenda; we want a presence in the regional markets as well,” says Rajan.

Capwell Industries is the leading producer of maize meal in the Central Kenya and Nairobi region. With their Soko brand having a strong lead in this particular region, driven by the focus on this area though the brand also has strong brand awareness across the country.

This with the premium Amaize maize flour brand has given the firm a steady footprint in the Kenyan maize flour market.

In the rice product category, the company has a number of rice varieties and brands: Pearl Kenya Pishori Rice, the flagship Pishori brand, has gained over the years popularity in Kenyan homes, credited with delivering the brand promise and commanding a leadership position in the Pishori segment. The company is proud of its leadership position in the Pishori rice category in Kenya.

The company’s CIL Long Grain rice and the Ranee Family rice range (Ranee Premium Basmati, Ranee Classic, Ranee Chef Special Basmati, Ranee Every Day and Ranee Biryani Long Grain rice) offer great cooking presentation properties. The rice products are available in white and brown options, and various packaging sizes, from 1kg, 2kg, 5kg and 10kg offering choice and variety to consumers The company also has an extension line to spaghetti and pasta products under Ranee brand packaged in 400gram packs not forgetting a growing list of packaged pulses packaged in 500g and 1kg packs.

These pulses include green grams, locally known as Ndengu, masoor dal (Kamande), cowpeas, black beans (Njahi), red beans, pigeon peas, popcorns among others under the Pearl Brand. During processing, the pulses are sorted and cleaned through the latest SORTEX technology that delivers clean, wholesome and nutritious grains that meet rising consumer needs in the region.

The porridge line consists of two varieties, Pure Wimbi and Wimbi Mix under the Soko brand name, offering wholesome nutrition & goodness to the whole family anytime.

Yola, that comes in four tantalizing flavors – vanilla, banana, strawberry and mango is targeted and suitable for the young and the old. “Yola cereal milk drink is a first-to-market, leading-edge trend to quench both hunger and thirst at the same time,” said Mr. Shah at its official launch recently. The drink comes in two sizes – the 250ml and FOODBUSINESSAFRICA.COM

MY FACTORY, MY STORY | CAPWELL INDUSTRIES LTD

450ml that cost Kshs 40.00 and Kshs 60.00 respectively.

Buoyed by population expansion in the peri and urban areas, where a major portion of the firm’s growth came from, rising incomes and a more aware consumer, Mr. Shah believes this will continue to be the core market for Yola and spilling into rural areas due to its long shelf life.

Human capital focus

The company presently employs over 400 people, a feat that the company is very proud of, impacting a total of 2,000 people through its supply chain, from the farmers from whom it sources the raw materials to the factory employees, to those involved in the distribution of its products.

“Our Chairman, who has been working in the food industry since 1956, started the company and has been vital to its growth. Over the years, we have made great strides in growing the company, and are very proud of our most important asset: the people we work with here. However, we have recently made moves to professionalize the management of the company,” Mr. Shah informs us.

“We have a Head of Business and below there is the senior management team that heads various functions: Human Resources, Finance, Production & Manufacturing and Sales and Marketing.

At the operational level, we have middle level, line management and supervisory staff. The team lead by Head of Business runs the operations and report to the executive Board, improving the management strength of the company.”

Mr Shah believes the R&D function creates a platform where innovation flourishes in the organization. They do take up university graduates who come and take internship programs and can hone their skills through their R&D. They absorb some of them as full employees.

“We are among the few in the industry to have a fully-fledged R&D function which we have taken as a core function. If you look at the core values of our company, innovation is one of them. It is important because the world over the pace of technology change is fast; the evolution of the digital era is rapid. This means you’ve to be apace with emerging trends to manage consumer expectations.”

The CEO says that they are looking at opportunities to train the under-privileged members of the society to find jobs. Further, they are looking at working together with other partners to start an apprentice program that will enable new employees to improve their skills, sorting out the mismatch of skill sets in the industry.

FOODBUSINESSAFRICA.COM

“YOLA CEREAL MILK DRINK IS A FIRSTTO-MARKET, LEADING-EDGE TREND TO QUENCH BOTH HUNGER AND THIRST AT THE SAME TIM” Rajan Shah - CEO The future and changing consumer needs

“Disruptions globally, with the internet and information at people’s fingertips means consumers are more knowledgeable. They have better understanding and higher expectations. The regulatory environment is trying to catch up with these expectations. There are a lot of changes in regulations. Look at the plastic ban and fortification in flours. These are challenges that have impacted our industry,” offers Mr. Shah.

“However, we have embraced the challenges positively. Food safety has become a very important thing – climate change has had a huge bearing on the issues around aflatoxins. As a company we have become more vigilant, we have invested in more testing internally to make sure we are securing the right quality raw materials to produce the right food products that are safe to the consumer. We are HACCP compliant and are moving towards ISO 22000 certification.”

The company is looking up to a bright future. “We are excited for the future, but we also cognizant of the fact that the consumers are more knowledgeable and asking for more. The consumers are asking more of manufacturers like us in terms of better, more convenient, safer, nutritious and healthier products. Of importance is that we need to be of a certain critical mass to list the company,” he says.

The company, in line with its mission and vision, will continue to deliver wholesome, nutritious and convenient products. “We are looking at further value addition of our raw materials, where our present products serve as raw materials for extra value addition, by using better technologies to deliver better value to our customers. All our questions of the future will be answered by how the consumer needs will be addressed. Vitality, health and time are of essence to every consumer.”

Capwell Industries is planning to be in the business for many more years to come and is willing to work with other stakeholders to improve the local community and the country, beyond meeting its corporate goals, concluded the CEO OCTOBER 2019 | FOOD BUSINESS AFRICA

43

WHEY-2-GO DRINK PAMAedge Ltd, Nairobi, Kenya.

PAMAedge Ltd has introduced a new Whey-2-Go drink made from whey that they say is a refreshing drink for those on the go for an active lifestyle. Available in mango and orange flavour options of 250 ml plastic bottle.

Declaration: Natural flavours, colour and stabilizer.

Ingredients: Fresh Whey, Natural flavour, Natural colour, Natural stabilizer, Reduced sugar, Citric acid (Vitamin C), Salt

APPY CANS RANGE Bigtree Beverages Ltd, Lusaka Zambia. www.bigtreebev.com

Big Tree Brands has introduced its Appy range of fruit drinks in sleek cans, adding to the plastic bottles packaging options. Available in 200 and 500 ml cans.

Ingredients - APPY PINE - Carbonated water, Sugar, Citric acid (E330), Pineapple juice, Preservatives (potassium sorbate (E211) and sodium sorbate (E211)), Artificial flavouring, Colour (E110)

NUVITA FLAP JACKS Mjengo Ltd. www.mjengo.com

Malbros NuVita have introduced Flap Jacks to their exciting range of products.

These oat bakes come in a 200g packs and are available in three varieties: Regular, Sugar Free and Chocolate Coated.

INGREDIENTS:

Flap Jack Regular: Rolled Oat, Butter,Wheat Flour, Desiccated Coconut, Sugar,Vegetable Fat, Honey, Milk Powder, Salt,Baking Agents(E500ii,E503ii),Emulsifier(E 322) ,Permitted Flavours,Antioxidant(E319) Flap Jack Sugar-Free: Rolled Oat, Wheat Flour,Butter, Desiccated Coconut, Fructooligosaccharide,Vegetable Fat,Malto Dextrin, Milk Powder, Salt,Baking Agents(E500ii,E503ii),Emulsifeir ( E322),Sucralose ( E 955),Petmitted Flavours, Antioxidant(E319) Flap Jack Chocolate Coated: Milk Compound Chocolate,Rolled Oat, Butter, Wheat Flour, Desiccated Coconut, Sugar,Vegetable Fat, Honey, Milk Powder, Salt, Baking Agents(E500ii,E503ii),Emulsifier(E 322), Permitted Flavours,Antioxidant(E319)

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High resolution photos of the product or send us a product sample Brand name of the product and product category Types of SKUs available and Varieties (e.g. flavours) available Brief description of the product covering target market, unique product profile, nutritional declarations etc

NOTE: The product should be one year old or less from the time it was launched to be considered.

Send details to press@foodworldmedia.net or call us on +254 725 34 39 32.

44 OCTOBER 2019 | FOOD BUSINESS AFRICA

SIKERA CIDER Kenya Breweries Limited. www.eabl.com

Kenya Breweries Ltd has extended its cider line to include Sikera Premium Cider, that they describe as a crisp, light and refreshing apple cider beer drink made from crushed apples with an Alcohol by Volume (ABV) of 4.5%.

FOODBUSINESSAFRICA.COM

NEW PRODUCTS INNOVATIONS

COCONUT COOKIES Fayaz bakers td , Mombasa, Kenya. www.fayazbakers.com

Mombasa-based Fayaz Bakers has extended its range of premium cookies with the addition of Coconut Cookies and Palmer Cookies that are available in 200 gram stand-up plastic pouches.

Ingredients: Wheat flour, Margarine, Sugar, Desiccated Coconut and

Emulsifiers.

PARMALAT ALOE VERA

Parmalat Zambia - www.parmalat.co.za Parmalat Zambia has added a new variety to its range of low fat drinking yoghurts. Parmalat Aloe Vera is available in 500 ml plastic bottles.

Ingredients: Milk, Syrup (Water, Glucose Syrup, Sucrose, Aloe Vera juice concentrate, Flavouring, Acidity regulators (E330 + E331 (iii)), Stabilisers (E410), Ammonia caramel, Colours (E104 + E133), Sucrose, Milk solids, Stabilisers (E1422, gelatine), Yoghurt cultures, Preservative (Potassium sorbate (E202).

MUTZIG CLASS Bralirwa - www. bralirwa.com

PEMBE REFINED COOKING OIL

Rwandan brewer Bralirwa PLC has introduced Mutzig Class, an extension of its Mutzig Lager with an Alcohol by Volume (ABV) of 4.5%.

Pembe Soya Refinery has introduced refined cooking oil that is available in 750 ml, 5 litre and 20 litre plastic bottles and plastic pails.

Ingredients, Noodles: Water, Malt, Cereals, Sugar, Hops

Pembe Soya Refinery Ltd - Lusaka, Zambia

Ingredients: Cooking oil

CHIBUNDIRO NATURAL FOOD SEASONING Taste Afrique Company Ltd Taste Africa Company has introduced a range of ready to eat natural food seasoning. Available in three varieties: No chillies, Medium Chillies & Hot Chillies in 70g and 150p glass packaging Declaration: 100% pure and natural. No additives

Ingredients: Onions, Ginger, Garlic, Salt, Coriander, Ground Spices

FOODBUSINESSAFRICA.COM

OCTOBER 2019 | FOOD BUSINESS AFRICA

45

AFRICA DAIRY CONFERENCE (AFDA) 2019 PICTORIALS

Jackline Kittony, Marketing Director, Tetra Pak receiving an award of appreciation as a sponsor from Dr. Andrew Tuimur, PS Livestock.

Delegates including MD Kenya Dairy Board Margret Kibogy appluad at the conference.

The Bio Food Products stand at the Expo Hall

New KCC team line up for a photo infront of their stand.

Exhibition visitors at the FoodWorld Media stand.

MD, New KCC, Nixon Sigey during an interview with Ronald Onsare at the FoodWorld Media's studio at the Expo Hall

FoodWorld Media staff hobnob with counterparts from IMCD, ADM Wild Flavors and Dairy Consulting at the Expo Hall

Promaco Ltd's stand at the Expo Hall was busy during the event

46 OCTOBER 2019 | FOOD BUSINESS AFRICA

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C E R E A L S | P U L S E S | T U B E R S | O I L S E E D S | C O F F E E | M I L L I N G | PA S TA | B A K I N G | S N A C K S | F E E D S

INVESTMENTS

Cargill partners with White Dog Labs on sustainable aquafeed alternatives

USA – US agribusiness giant Cargill has entered into an agreement with White Dog Labs to expand its offerings of sustainable alternatives to fishmeal in the aquafeed sector.

The deal secures access to ProTyton, White Dog Labs’ singlecell protein produced by fermentation with corn feedstock, as sustainable alternative to harvesting fishmeal, which like fishmeal, is high in protein and amino acids. Cargill said that ProTyton will be ready to ship from White Dog Labs’ demo facility in Sutherland,

Nebraska in 2020.

Cargill is confident that ProTyton offers a good source of protein for fish and shrimp, an affordable feed ingredient for farmers and a sustainable option for the planet that lessens reliance on fishmeal.

With the deal, Cargill plans to begin offering ProTyton in salmon feed, with the possibility of expanding to shrimp and other species as White Dog Labs’ production volume increases. The agribusiness company said the partnership marks another step in its journey to find new, sustainable ways to feed the growing planet.

Made up of 80% protein, ProTyton offers higher protein content than typical fishmeal. The aquafeed also offers an attractive amino acid profile with 40% essential amino acids. According to trials conducted by the company, salmon fed on a diet containing ProTyton achieved a growth performance comparable to salmon on a conventional diet. The company also noted that integrating MiruTyton, a valuable co-product in the aquafeed ensures that the product is economical – since the coproduct shares its production costs.

White Dog Labs’ MiruTyton is a liquid feed additive that is rich in butyrate, which promotes healthy digestion and boosts energy.

Trials have indicated that MiruTyton in livestock diets supports higher growth rates and a better feed conversion ratio than when fed a normal die.

MARKETS TRENDS

Global animal and pet nutrition ingredients market to hit US$24bn by 2025 WORLD – Growth prospects in the global animal and pet nutrition ingredients market look promising over the next six years, according to a recent Frost & Sullivan forecast.

Frost & Sullivan expects the total market for animal and pet nutrition ingredients to grow from US$16.612 billion in 2018 and reach US$24.178 billion by 2025, recording a compound annual growth rate (CAGR) of 5.5% during the period.

The Frost & Sullivan’s recent analysis cites strong growth in the livestock feed industry in developing regions, with an uptick in aquaculture feed as one of the major factors driving sustainable market prospects. In addition, an increase in per-capita meat consumption fuelling production efficiencies and, in turn, demand for feed additives as well as stringent regulations limiting the use of antibiotics for growth promotion will also propel growth in the sector. Meanwhile, increased awareness among pet owners, pertaining to the health of their pets, is set to propel functional ingredients in the pet nutrition sector, according to the analysis.

To meet growing insistence for high-quality meat and other animal products, the reports notes that there is increased pressure on farmers to improve quality and productivity, along with ensuring higher sustainability. “Therefore, the practice of supplementing diets with additives such as vitamins, amino acids, organic acids, enzymes, and probiotics is expected to intensify,” said Smriti Sharma, Industry Analyst, Agriculture & Nutrition at Frost & Sullivan.

“Furthermore, a shift toward landless commercial production systems will augment the need for supplementing diets with FOODBUSINESSAFRICA.COM

additives that can promote healthy and faster growth and improve the feed conversion ratio,” Sharma adds.

On a reginal basis, China remains the major producer and key consumer of feed additives, driving the overall market in the AsiaPacific (APAC) region – according to the analysis. In general, the market is fragmented with a number of Chinese manufacturers competing with major global manufacturers such as DSM, ADM, BASF, Cargill, Novus International, Evonik, and DuPont.

The research highlighted additional growth opportunities that participants should aim to secure to include developing novel microbial strains that could enhance the immune functions and focusing on product portfolio expansion and partnerships.

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MARKET TRENDS

INVESTMENTS

International Grain Council ADM opens largest mill in North America to expand raises global grain production capabilities forecast by 11m tonnes has also incorporated three milling

USA – The International Grains Council (IGC) has revised its forecast for total world grain production in 2019-20 upwards by 11 million tonnes.

In its August Grain Market Review (GMR), the IGC said it now forecasts global grain production for 2019-20 at 2.159 billion tonnes due to a rise in projected US corm production. This represents a 0.5% increase from 2.148 billion tonnes in its July forecast and 17 million tonnes higher than the Council’s 2017-18 estimated total.

According to the Grain Market Review, the IGC placed global corn production for 2019-20 at 342 million tonnes, up 8 million tonnes from the July forecast, but noted that “output prospects are still uncertain after a less than ideal growing season.” At the same time, the outlook for global grain consumption in 2019-20 increased by 2 million tonnes from the previous month to 2.186 billion tonnes, representing a 1% increase from the previous year.

“With larger new crop supply than in the last GMR, and also taking into account the bigger opening inventories, the projection for world closing stocks is up by 13 million tonnes (month on month), to 598 million, albeit still down by 27 million tonnes year on year at a four-year low,” the IGC said.

Global soybean production for 20192020 was downgraded by 4 million tonnes from the July report on diminished prospects in the United States, where harvested area is likely to contract by 14% from the previous year.

The Council placed soybean trade during the period at 149 million tonnes, representing a 3% year on year decline.

This was pinned smaller-than-anticipated shipments to key markets. Global rice output is projected 2 million tonnes lower from the previous month’s forecast, at 501 million tonnes, slightly higher than the estimated 2018-19 crop.

Reflecting subdued demand from buyers in Africa and Asia, the IGC’s forecast for rice trade in 2019-20 is lowered by 1 million tonnes, to 45 million tonnes, a slight yearon-year decrease.

48 OCTOBER 2019 | FOOD BUSINESS AFRICA

USA – Food processing giant, Archer Daniels Midland (ADM) has opened a new state-of-the-art flour mill in Mendota, Illinois, offering unparalleled efficiency and flexibility for customers across the Midwest.

The mill, which is the largest flour mill ever built from the ground up in North America, has the capacity to mill 30,000 cwts (about 1360 tonnes) of spring, winter and soft wheat varieties in addition to two types of whole wheat per day.

The modern mill features high tech innovations including a brand new lab with the most up-to-date qualitycontrol equipment, a high speed packer and 30,000-square-foot warehouse and a loop track with 110-car shuttle rail unloading capacity. In addition, the mill

units with centralized monitoring to ensure performance, consistency and security of supply, three bulk truck load-outs and rail load-out capability.

Kevin Like, president of ADM Milling said that the investment will support growth of the bakery industry in the Midwest. “Our growth investment to design and build a cutting-edge production facility from the ground up highlights our commitment to growth for our customers, our shareholders and the state of Illinois,” Like said. He noted that ADM will benefit from the mill’s advanced technology, particularly compared to the aging mills the company closed.

The mill also features an onsite transportation company, including a truck wash and an advanced truck facility utilizing RFID technology to ensure efficiency and accuracy. The mill also has the capacity to ship both bulk flour and millfeed by rail, in addition to truck.

The mill will supply customers in Chicago and surrounding markets in northern and central Illinois, southern Wisconsin, northern Indiana and eastern Iowa.

INVESTMENTS

Nigerian state government to commission US$11.11m rice mill factory

NIGERIA – Kogi State government in central Nigeria is set to commission a rice mill factory worth N4 billion (about US$11.11m) before November to boost rice production in the State.

The rice milling plant which has been under construction for the past three years is set to have a processing capacity of 80 tonnes per day of paddy rice, which after processing gives an output of 50 tonnes of rice per day.

According to the state governor Alhaji Yayaha Bello, once the factory commences full operation it will be injecting over N300 million (about US$0.8m) into the economy of Kogi State every month. In addition, the factory is set to provide jobs at the government’s 800 hectares nucleus rice farm which is set to feed the plant.

The government started rice production

in the 800 hectares land way a head of time in readiness for the commencement of operations of the factory. The rice milling process will not only produce finished international standard quality rice, but its by-products such as the rice bran will be used to produce fish and poultry meals.

“The rice mill will also be producing fish and poultry meals because we are presently having over 500 fish ponds in this Omi Dam. We have the capacity to produce cassava and all agro-allied products in this particular location,” stated the governor. In addition to that the rice husk will be used as 100% fuel to power the 500-kWh biomass generation plant. This will drastically reduce operation cost of the plant.

Having 500 kWh generated from the independent power generation plant and the rice milling plant having a capacity of 200 kWh at every processing line, the excess 300 kWh will be used to power strategic locations in the host community.

By-products such as broken rice will be used to make rice flour debut ‘Kogi Confluence Rice Flour’ – which was launched in 2017 to boost local rice production which will now be processed in the new factory when it starts operations.

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COMMODITIES

Ethiopia tenders 400,000 tonnes wheat import bid to meet local demand

ETHIOPIA – The Ethiopian government is set to import another batch of wheat amounting to 400,000 tonnes in bid to meet market demand.

Ethiopia is among top Africa’s wheat producing countries with the commodity accounting for about 20% of the country’s total cereal production. However, the country has not been able to meet the demand of the commodity in the country which estimated by USDA stands at 6.3 million tonnes. This has led the government to continuously import wheat from the Black Sea region for the last several years.

The latest purchase which will be made on behalf of the Ethiopian Trading Business Corporation will be used for the purpose of market stabilization with the wheat distributed to flour factories as well as bakery houses.

As the country embarks on the importation exercise, it has been met with a couple challenges such as the recent controversy with delays in transportation of the commodity from the port.

Wheat is an important commodity in the country’s food basket which has compelled the government to adopt various interventions including the provision of improved farm inputs and farm mechanisation. Notably, the government has rolled out a US$5.98 million agricultural mechanisation project set to take effect across major grain producing regions in the country.

Implemented by the Ethiopian Agricultural Transformation Agency (ATA), the project seeks to establish mechanisation centres that will capacitate wheat farmers to boost production by providing modern agricultural technology.

INVESTMENTS

Pakistan based Maxim Agri to set up US$10m animal feed plant in Kenya KENYA – Maxim Agri International, a Pakistan based company has signed an agreement with the Oserian Development Company to put up an animal feed plant worth Sh1 billion (US$10 million) in Kenya.

Maxim Agri International is an Agri-company dealing with feeds, fodder seeds and customized nutrition solution. Oserian is a worldwide renowned flower farm sitting on 3,00 acres of land while its industrial park occupies 750 acres of the farm. The company will be setting up the feed plant at the Oserian Two Lakes Industrial Park in Nakuru County.

The contract was signed by Maxim General Manager Mr. Muhammad Salman and Oserian Company Finance Director Mr. Tim Ndikwe, witnessed by the Nakuru Governor Lee Kinyanjui.

The Maxim Agri plant will be involved in genetic modification, production of cattle feed, cow comfort products and farm equipment which will lead to improved breeds and production that will offer farmers better returns. The facility is expected to boost the country’s livestock production as well as open up new markets for dairy products. The plant is scheduled for completion by January 2021.

“Our focus is to produce quality feed geared towards improving productivity of the beef, maize, poultry and pig subsectors,” said Maxim General Manager Mr. Muhammad Salman.

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INVESTMENTS

Popular Farms invests US$70m in Nigeria’s rice and sesame value chains NIGERIA – Popular Farms and Mills Limited, a subsidiary of Stallion group has invested over US$70 million to boost production of paddy rice and sesame in Nigeria to enhance economic fortune of the country.

The company, which has been operating for about 50 years in the country has one of the largest automated rice milling unit with an annual installed milling capacity of 150,000 metric tons and direct contact of 35,000 farmers. Popular Farms has collaborated with National Agricultural Seeds Council for the purpose of producing and satisfying the locally released and grown genetic seed.

Planning to increase production, the mill is targeting an output of 1.5 million tons of paddy rice per annum through the setting up of additional milling facilities aiming to make Nigeria self-sufficient in rice production.

“Our plan is to spearhead and lead the Nigerian rice revolution to self-sufficiency in rice production,” Stated the Managing Director, Popular Farms and Mills based in Kano, Mr. Amit Kumar Rai. “We intend to achieve this through training to over 24,264 rice out growers across the producing states and cooperatives, as well as empowering women and youths in the rice value chain.’’

The company is also leveraging on the policy impetus provided by the federal government through its green alternative agricultural agenda.

The investment has enabled Popular Farms to upgraded its local rice milling capacity to 430,000 metric tons per annum.

Mr. Amit revealed that the company is planning to inaugurate a sesame processing and cleaning facility at Challawa, Kano, Northern Nigeria. The initiative is timely as the country’s sesame seed export value to Asia and Europe is set to hit US$331m annually according to a report by Agusto & Co. Increased private investments in sesame processing which would involve investment in state-of-the-art processing facilities and raw material sourcing from reliable small- and large-scale farmers is expected to further propel growth.

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STRATEGY

Flour Mills of Nigeria banks on turnaround initiatives to boost growth NIGERIA - Flour Mills of Nigeria Plc (FMN), one of Nigeria’s leading integrated food and agro-allied company, envisions continuous growth in key segments as a strategy to delivere improved margins and operational efficiencies, which will in turn result in higher profitability.

The key areas targeted are the continuous implementation of turnaround initiatives in the business, accelerated expansion in the business-to-consumer segment, optimal operation of supply chain and further balance sheet management.

Earlier this year, the company received approval from its shareholders to merge five of its subsidiaries with its holding company under a Scheme of External Restructuring which will lead to higher profit and additional value to the entire group.

The merger involved Golden Noodles

INVESTMENTS

Japanese consortium to fund Kenyan small-scale sorghum processors KENYA – A consortium of private firms from Japan have rolled out an initiative to equip and fund Kenyan small scale processors to add value to sorghum in efforts to boost uptake of the traditional food crop.

The initiative, which aims at boosting food security, creating jobs in the traditional food crops value chain and increasing income for farmers, targets farmers in Embu, Meru, Kitui and Migori Counties who will be paid on delivery to the processors.

Though highly nutritious and readily available, most traditional food crops such as millet and sorghum are less consumed especially in urban areas. The small-scale processors will purchase and blend it with other foods during processing to encourage consumption.

Among products being explored to have a mixture of sorghum and other ingredients are pastries like cakes.

In the recent past sorghum production has been a flourishing enterprise in Kenya with the introduction of sorghum beer in the market. Prior to this, sorghum production had been declining due to a shrinking production area which had a

ripple effect on yields.

However, the crop’s production is now at an all-time high, thanks to sorghum beer production which has led to increased utilization of sorghum for industrial purposes by brewers such as the Kenya Breweries Limited.

This shift provides a market opportunity to absorb large volumes of this produce at competitive prices because many of them have been contracted to supply sorghum for beer production through an interlinked markets system.

In 2017, Kenya Breweries Limited broke ground for the construction and refurbishment of the Sh15 billion (US$15 million) Kisumu plant which produces KBL’s low end beer – the Senator Keg made from sorghum.

This led to the brewer partnering with up to 25,000 sorghum farmers in western Kenya region to enhance improved sorghum yields as a long-term sustainability programme of its Kisumu plant.

Kenya Breweries limited also seeks to commercialize the crop by raising the production from the current 400 kg per acre to 1.5 tonnes in the next season.

to Ksh17.9 billion (US$172m) for the year ended 30th June 2019 from the previous year’s Ksh19.98 billion (US$192m).

The Nairobi Stock Exchange listed firm’s finance costs went up by 83.7% to Ksh166.75 million (US$1.6m) as increased raw material costs was absorbed by the animal nutrition business thus constraining margins while supporting volume.

The profit for the year decreased by 30% to Ksh544.81 million (US$5.2m) mainly attributed to increased competition mostly in the human nutrition business.

Due to the decrease in profit, the company’s Earnings Per Share decreased by 32.7% to Ksh4.52 from Ksh6.72.

The firm also announced that its new wheat mill in Eldoret in western Kenya increased its capacity and further improved production efficiencies.

The bakery business recorded a reduction of 16% in revenues attributed to the credit risk challenges in the retail sector.

The Seaboard-backed grain miller commissioned a new state-of-the art wheat milling plant in Eldoret with a 300-tonne daily milling capacity and a storage silo

with a capacity of 15,000 tonnes in a bid to grow its production capacity.

Commissioned in mid-December last year, the Eldoret plant is expected to double the millers’ current production capacity and further rise competition in the sector.

They also unveiled plans of setting up a soya meal production line in its Nairobi plant as it seeks to grow its investments in the grains and milling sector. ‘’The company will be installing a soya meal production facility at the Dakar Road plant during the course of the 2018/19 financial year,” the firm said in a statement.

Unga chief executive Nick Hutchinson said the new plant will help reduce expenses through efficiency and lower wage bills.

“This is a state-of-the-art machine that will be more economical to run and efficient on production, it is going to cut down on our expenses,” noted the CEO in a statement last year.

TARGETED ARE THE CONTINUOUS IMPLEMENTATION OF TURNAROUND INITIATIVES INVESTMENTS IN THE BUSINESS, ACCELERATED EXPANSION Unga Group reports 10.4% decline in revenue for the year IN THE BUSINESS-TOended CONSUMER SEGMENT, KENYA – Unga Group Limited, a KenyanOPTIMAL OPERATION based holding company with investments OF SUPPLY CHAIN in flour milling and manufacturing of AND BALANCE SHEET human nutrition products and animal feeds has reported a 10.4% decrease in revenue MANAGEMENT.

Nigeria Limited, Golden Transport Company Limited, FMN Cement Industries (Nigeria) Limited, New Horizon Flour Mills Limited and Quilvest Properties Limited with Flour Mills of Nigeria Plc. The company’s directors had also proposed to embark on a restructuring exercise that sought to allow each group to focus on its core market and effectively grow market share. This was followed by the Thai Farm International Limited, subsidiary of Flour Mills of Nigeria Plc, changing its corporate name to Premium Cassava Products Limited. The change in the cassava processing division, which is also a major stakeholder in the industrial production of Garri – Golden Penny was part of the larger group restructuring programme by the FMN management.

The restructuring processes are key to the company’s financial position. FMN hopes to improve its balance sheets from the N542.4bn (US$1.5 billion) revenue generated in 2018.

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INVESTMENTS

Zambeef Products to Sell Sinazongwe Farm for US$10m ZAMBIA – Zambeef, one of the largest integrated cold chain food producers with operations in Zambia, Nigeria and Ghana has entered into a binding Sale and Purchase Agreement (“SPA”) with Chenguang Biotech (Zambia) Agri-Dev Limited for the sale of Zambeef ’s Sinazongwe Farm for a cash consideration of US$10 million.

Chenguang Biotech (Zambia) AgriDev Limited is a subsidiary of the Chenguang Biotech Group Co. Limited based in China (“CCGB”).

The Chenguang Group is one of the world’s leading producers and suppliers of natural plant extraction for paprika oleoresin, capsicum oleoresin and marigold oleoresin.

They also manufacture natural pigments, natural spice extracts, essential oils, natural nutrient and medicinal extracts and protein.

According to the agreement, Chenguang will pay a deposit of US$1 million, and settle the balance by completion date March 15, 2020.

The sale is conditional on gaining approval from the Competition & Consumer Protection Commission, the Lusaka Securities Exchange and Zambeef shareholders. It is also dependent on Chenguang obtaining an investment

licence from the Zambia Development Agency.

Dr. Jacob Mwanza, Chairman of Zambeef, stated “This Transaction is in line with and a continuation of the Group’s strategic vision, which will allow Zambeef to focus on growing its core business, which is the production and retailing of cold chain meat and dairy products and stockfeed, delivered through the Group’s extensive processing, distribution and retail network.’’

He further added, ‘’Furthermore, the transaction will allow Zambeef to continue to reduce its overall gearing, and in so doing, reduce interest costs.’’

Net proceeds, are expected to be around US$9.25m after payment of various regulatory and other professional fees/ cost i.e. CCPC fees and ZRA PPT borne equally by both parties.

Sinazongwe Farm is made up of three land parcels comprising a total land area of approximately 2,549.8 Ha. of which approximately 1,815 Ha is developed, arable land under irrigation.

The main crops grown on the Farm are soya beans in the November to March season and wheat in the April to September season.

There is a feedlot and abattoir on

ACCORDING TO THE AGREEMENT, CHENGUANG WILL PAY A DEPOSIT OF US$1 MILLION, AND SETTLE THE BALANCE BY COMPLETION DATE MARCH 15, 2020. the land which will separately be subdivided and remain in the name, title and ownership of Zambeef. Chenguang will grant Zambeef free and unfettered use of up to 200,000 litres of water per day for use on Zambeef ’s Feedlot and Abattoir.

Chenguang undertakes that it will retain and re-employ all local Zambian staff from the Completion Date and in this regard, on or before the Completion Date, Zambeef will lawfully terminate the employment of all the employees on the Farm. Zambeef shall pay all wages & terminal benefits due to the employees.

Sinazongwe Farm is located in the southern Zambezi valley of Zambia, along the northern shore of Lake Kariba, approximately 70 km south-east of Choma town. The farm was acquired by Zambeef in 2003 for approximately USD2.3m.

INVESTMENTS

South Africa drafts a bill on feed, pet food and fertilizer manufacturing

SOUTH AFRICA – South Africa’s Department of Agriculture, Land Reform and Rural Development has proposed changes to the Feeds and Pet Food Bill and the Fertiliser Bill, governing the regulation and licensing of facilities that manufacture fertilisers, animal feed and pet food.

Animal feeds, pet food and fertilisers in South Africa are regulated in terms of the Fertilisers, Farm Feeds, Agricultural Remedies and Stock Remedies Act (Act No. 36 of 1947).

Since 1947, there have been significant changes in the manner in which the animal feeds, pet food and fertilisers are processed.

These changes have resulted in the consideration of a review of the regulatory framework in order to put more emphasis on food and environmental safety as well as reducing regulatory burden, the department said.

The department has drafted legislations that are intended to FOODBUSINESSAFRICA.COM

replace parts of the current bill.

One of the major changes proposed in the bills is the licensing of facilities that manufacture fertilisers, animal feed and pet food, moving away from the current model of pre-approval of all animal feed products before putting them on the market.

The other change is that, feed manufactured on commercial farms to be regulated, resulting in some farms required to register their manufacturing facilities.

The department has called upon members of the public, including relevant industry stakeholders, farmers, academics and all other relevant stakeholders to participate in consultation workshops. The views gathered from these workshops would be used to improve the draft bills.

According to a report by World Grain, South Africa’s pet food industry recorded an increase in sales since 2014 with the $94.5 million achieved in 2016 being the highest in the last four years to 2018.

The sales volumes were higher than those of 2014 and 2015 when local manufacturers and importers sold $73.7 million and $89.7 million of pet food, respectively.

South Africa’s pet food market comprises of a mixture of imports and domestic products with the country being a major gateway to regional pet food markets, especially of members of the Southern African Development Community (SADC).

In 2016, South Africa’s value of imported and exported pet foods was estimated at $40 million and $20 million respectively, by the Global Trade Atlas statistics with the United States, France and the Netherlands contributing 75% of the total pet food imports, according to the U.S. Department of Agriculture (USDA).

OCTOBER 2019 | FOOD BUSINESS AFRICA

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BUHLER NETWORKING DAYS 2019

STEFAN SCHEIBER CEO - BUHLER

How has your impression been on Buhler Networking Days 2019?

STEFAN - When I look at the objectives which we have set ourselves for the Networking Days, I must say I am very happy with the overall achievement. I think when we look on one hand at the question of how we can drive change into the future in terms of food processing and on the mobility side, we were able to show that there are many more technical and digital solutions which will make the industry more efficient in future. It was not just about Buhler and the Buhler technologies but about ideas which technology offer generally and that is why we brought in many outside speakers to offer different perspectives.

There were people at this event who provide via their companies food to more than 4 billion people, so it was a very relevant event and as such we could inspire the whole industry to step up and take up the responsibility and not just leave things to NGOs, governments and other institutions. I believe it is important that businesses take it in terms of applying new technologies, in terms of also creating perspectives for young people to come into companies and change them from within. We are not saying that everything in the past was bad, what we are saying is that we are living in a digital world that changes in such a dramatic, accelerated pace. For food companies to be successful, they need to adapt and also to attract skilled people. At this year’s Networking Days, we brought the whole industry together to define the future that we all want that is more sustainable.

IAN – This year’s Networking Days have been an extraordinary experience. If you think about what we set out to do; we wanted to build a platform where industry leaders from food and mobility could come together and discuss the problems that we face as an industry and the problems we believe we need to resolve for the benefit of the future generation.

We had 600 leading players in the food industry and 200 from the automotive industries and for both to understand that they have a common goal and to engage on how as a company we are going to change our targets, which we believe we should do, is a very confirmative process for us. We really wanted to show how the industry will accept what we want to do. We decided that we will talk as a company, what we believe in and what we believe we should do.

52 OCTOBER 2019 | FOOD BUSINESS AFRICA

THE CUBIC INNOVATIONS CAMPUS HERE IS A PHYSICAL MANIFESTATION OF THE SPIRIT OF INNOVATION AND DIGITALIZATION BECAUSE IT BRINGS DIFFERENT PEOPLE TOGETHER. Why have you changed your sustainability targets to 50% from 30% previously?

IAN - We have decided to change our sustainability targets not because we have succeeded in all of the previous ones. We changed them because we realized that what we were trying to achieve was not good enough.

It is clear that if we take the food side, we need to feed 10 billion people by 2050 within the planetary boundaries. We want to let people have access to safe, nutritious and affordable food.

So, we decided to decrease waste, energy consumption and water consumption in our customers’ value chain that goes from the field all through the consumer to recycling by 50%. It is an extremely ambitious target, but it is what we need to do if we are to react to the findings of the Intergovernmental Panel on Climate Change (IPCC) from November 2018 which basically gives us 12 years in which we must intervene if we have to combat the 1.5 degrees Celsius increase in temperature versus pre-industrial times.

So, our 50% targets are because they are big enough, they are too big to achieve alone and we have to draw a lot of collaboration; no one in their right mind would try to do this on their own, we have to do it as an industry in partnership with others. We have to think of systemic approaches by looking at the whole system, across value chains and we also have to look at different diversities.

We need to have solutions in place by 2025, because if we have to bring in impact by 2030, we need to scale these solutions. So, that is what we were pushing and hope we shall have an agreement so that we can drive technologies and people in that direction.

The feedback from the industry has been overwhelmingly positive and people understand the buy-in, they will support us, we will derive a greater collaborative initiative across industries, and these will allow us to achieve them. With time, on a personal note, we get to know these people and individuals as human beings and FOODBUSINESSAFRICA.COM

TRENDS

FOOD SAFETY

OPERATIONS

FORMULATIONS

REPORT

IAN ROBERTS

CHIEF TECHNOLOGY OFFICER - BUHLER

IN NUMBERS

800

NUMBER OF LEEADING PLAYERS IN THE FOOD INDUSTRY AND AUTOMOTIVE INDUSTRY WHO ATTENDED that’s how we should interact; we have shared goals, we care about what our children are inheriting from us – about the legacy we leave. This brings people together and it brings an overwhelming sense of optimism that can help solve some of these problems.

I come with optimism, a lot of hope but we have quite a lot to do but I am convinced as an industry in collaboration we will finally make a major contribution. We said at the beginning that industry should not be the root of the problem but be a key part of the solution.

There is a strong focus on food safety at the display section of this event. What would you like to say about that?

STEFAN - This is one of the current key innovations drive we have as Buhler. There are many cases of food safety breaches around the World that we feel as a company, we have a huge role to play to reduce or eliminate altogether. For example, if you look at our cleaning solutions for grain processing, we have completely rejuvenated the whole portfolio over the last 5 years.

This is very important, because if we look at grain, we know the bulk of it is feeding people with more than 75% of their protein and carbohydrates requirements. Then we need to ensure that these grains, in terms of food safety are being treated very early after harvesting with very good cleaning and drying processes. Because when this is not well done, we lose nearly 30% of the final product, while in some countries more than 30% of the crop rots away and FOODBUSINESSAFRICA.COM

is also lost on transport. We have also looked at the entire value chain to see what on the food safety subject and the technologies we bring into play in the value chain. For example, if you tackle the issue of aflatoxins in maize early, on then the value chain downstream is much more efficient in tackling the issue. We offer safer, more efficient technologies and then work with the industry to apply them in their daily operations to have safer food reaching the final consumer.

We have also invested in new automation systems whereby food in the processing system can be traced back to their origin; because if anything happens, it’s important to find early on the origin of the problem to fix it immediately before it continues into the rest of the value chain.

What can you say about the leadership role played by companies like Buhler in achieving an industrywide response to sustainability?

IAN - I think everybody has been soul searching over the last few years to determine what their role is in the problem of having a sustainable future. As an individual you must align your sense of purpose with what you’re doing in your life and we have an opportunity to do this.

At a company like Buhler, we learnt that we have a huge role to play because of how we serve the food value chain around the World. We have a high degree of trust by our customers because we have been serving them for 159 years. This enables us to have a discussion on a different level; it is not us telling the food industry what to do, all these companies are doing a phenomenal job.

Everybody in their own way has been contributing. I think the message we want to bring is if we are to work together and not as individuals, imagine the impact we could bring. We thus felt it better to discuss how we need to change as an industry with the key people in the industry.

We asked three questions in this battle for sustainability a sustainable future: 1. Are we doing enough as an industry? – Buhler’s role in is to bring the industry together and make sure we provide the relevant solutions and the inspirations to enable the industry OCTOBER 2019 | FOOD BUSINESS AFRICA

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to buy in and perhaps help them to go on their journey.

2. Are we doing enough as a company? – At Buhler, all our different goals are in line with this 50% target reduction in waste, water and energy. Therefore, each time we strive to make technology more efficient, bringing digital solutions into the existing to ensure that we can drive much better productivity, reduce waste management and energy consumption.

3. What I am doing as an individual? Am I doing enough? We wanted to bring some examples that can let people say I can do that; whether it is planting trees, collecting plastic or supporting education. So, it is very kind of you to suggest we lead the industry.

I think we have a group of like-minded people working with a group of like-minded companies and CEOs who feel that we needed this space to talk about this. If we can provide that space, I think our duty is done.

AT A COMPANY LIKE BUHLER, WE LEARNT THAT WE HAVE A HUGE ROLE TO PLAY BECAUSE OF HOW WE SERVE THE FOOD VALUE CHAIN AROUND THE WORLD. How are you pushing the agenda for digitalization and how are the consumers receiving it?

STEFAN - The CUBIC innovations campus here is a physical manifestation of the spirit of innovation and digitalization because it brings different people together. We have researchers, development control systems platform creators, software people etc. I think it is important as industries we are capable of attracting these kinds of people and bring them together to create new solutions. Digitalization is not a solution per se; an app cannot save the world but if we find smart combinations of the physical world with the positives of the digital world then I can see that these technical solutions are very powerful and efficient. Then we can say we are addressing some of the challenges like how much waste and by-product we are generating, and can we do something about that. How much electricity or power are we using to produce a ton of flour, rice, chocolate; whatever it is and see if we find these smart solutions and we can show that we are making progress as far as this is concern. Then we can also deliver against the targets of sustainability that we’ve set ourselves.

The Networking Days is not a Buhler sales stage, we need to bring the whole industry to the next level; I am very happy to sell the next flour mill or two or a chocolate line to these people but if they don’t get the idea that we need to make the value chains more efficient then we will have long term problems and if we cannot master them then ours as a Buhler business is challenged. We should create innovations for a better world.

Tell us more about the idea of bringing outside innovations into the company.

IAN: If you think about the complete disruption that we see in technologies the whole digital innovation field, this is a different game. It’s the single biggest disruption of technology in our lifetime and could enable a huge range of extraordinary beneficial steps unlike old technologies, some of which can be a waste of time, money and energy. But this transition is interesting, in one lifetime you have a lot of young people who are born into this technology and for them it is perfectly natural. You have people like me who if we don’t learn how to use these technologies even on a daily operative level, we shall be completely left out.

On the innovations front, we have a world where we can not 54 OCTOBER 2019 | FOOD BUSINESS AFRICA

THE OPERATIONS DOWNSTREAM IN COCOA NEED TO BE EFFICIENT AND EFFECTIVE AND OUR CONTRIBUTION IS THE CREATION OF A COCOA TRAINING SCHOOL IN ABIDJAN, IVORY COAST. WE PLAN TO SET UP A RICE TRAINING IN NIGERIA AS WELL. afford to have the skills only inside our company tackling our problems; you have to harness the global skills capabilities to solve problems, because some are of such a magnitude that you can’t solve them all alone.

So, we have been working for 10-15 years building an ecosystem of partners. These partners can be suppliers, academic institutions, start-ups and individuals. But also, inside our company we source innovations, bring them up to commercialization by supporting our people, taking them out of their jobs to focus on these concepts.

We have made very concrete steps to build on our partnerships with outside partners, for example we brought the Mass Challenge Accelerator to Europe alongside Nestle’, Givaudan, GAIN and others. We were able to accelerate 60 start-ups a year from an application base of 1000. And now they have a culture; they have a buzz and we want to import that into our company. We know that unless we get diversity into our company in terms of experience, race, religion, gender, age etc, we are not going to capture the intellectual capital that we need to solve these problems.

So, our concept around CUBIC is to say, how do we build the epicenter of bringing this ecosystem together – the start-ups, the customers, the suppliers, everybody in that company. You can build a building for a 18-20-year-old digital native to share openly with a 60-65-year-old with 40 years of priceless experience and marry those two capabilities. Now if you get that right, then your future is sustainable because you have the experience, the know-how and technology. That is the idea of CUBIC; to bring all of these together to create an epicenter of our ecosystem. At CUBIC, we work hard on our ecosystem to centrally influence the company and to show how we will work in the future. And it is as much as it is for the outside world as it is for the company.

The African Milling School in Kenya is nearly 5 years.

How has been its impact and what more are you planning for Africa?

STEFAN - First, I couldn’t be more proud about what we did with Martin Schlauri and the team in Kenya. My first job was in Kenya in 1986 and it was clear that we needed to do something in Africa for Africa.

We don’t just want to sell equipment; customers must be enabled to run these equipment. Since it was beyond many of our customers to get their people to Europe, we decided for set up this learning and training facility in Kenya. The impact we have achieved at the milling school is mind blowing, it is great, its moving and we’ve now taken it to baking too.

In West Africa, especially in Ghana and Ivory Coast, the market is more focused on cocoa processing than on grain milling. We have participated in many activities that are improving the cocoa value chain targeted at making the farmer more successful. The operations downstream in Africa need to be efficient and effective and our contribution is the creation of a cocoa training school in Abidjan, Ivory Coast. We plan to set up a rice training in Nigeria as well

FOODBUSINESSAFRICA.COM

BUHLER NETWORKING DAYS 2019

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OCTOBER 2019 | FOOD BUSINESS AFRICA

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MB PLC INTERVIEW

MB PLC: CHANGING THE DAIRY INDUSTRY IN ETHIOPIA

MB PLC IS ONE OF THE SCORES OF MILK PROCESSORS IN ETHIOPIA. THE COMPANY’S FAMILY MILK BRAND IS ONE OF THE BEST KNOWN IN THE COUNTRY, WHERE MILK CONSUMPTION IS ON THE RISE, DESPITE CHALLENGES WITH LOCAL PRODUCTION THAT HAS FAILED TO MATCH THE INCREASING DEMAND. THE COMPANY RECENTLY INSTALLED AN AUTOMATIC UHT MILK PROCESSING PLANT IN ADDIS ABABA, FROM WHERE THE FOOD BUSINESS AFRICA TEAM HAD A DISCUSSION WITH THE GENERAL MANAGER, HAILU ESHETU Tell us a brief history of MB Plc and what it does MB Plc was established in 2001 and is one of the leading milk plants in Ethiopia and the fastest growing dairy processor. The company produces milk and milk related products such as yoghurt and different types of cheese. We have three plants: a fresh milk plant, a UHT milk one and a value-added products plant; 56 OCTOBER 2019 | FOOD BUSINESS AFRICA

all located in various areas in Addis Ababa. The company gives attention to highest standards in quality, innovation, service and CSR. The company is owned by eight family members and SGI Frontier Capital, a leading private equity firm focused on frontier markets in Asia and Africa. In 2001, we started the company off by entering the fresh milk category, then later got into yoghurt and FOODBUSINESSAFRICA.COM

MB PLC INTERVIEW

MAIN PICTURE, LEFT - The Assiatant GM and the GM Hailu Eshetu with the new Family Milk Long Life Milk. ON THIS PAGE: The Production Manager on the factory floor.

cheese production, and then recently UHT milk processing.

Why did you decide to go into milk processing?

Most milk market Ethiopia is found around Addis Ababa, the capital city, and was mainly sold in the informal sector unprocessed and in raw form. The family decided to venture in milk processing in 2001 to tap into this opportunity, as the urban population increased and consumers sought better quality, packaged milk.

Further, the farmers who used to have milk sometimes could not secure the market for their milk, resulting to the wastage due to lack of processing facilities in the country. We therefore decided to intervene for the sake of the farmer and consumers in Addis Ababa.

Due to the religion-cultural set up of Ethiopia, milk is consumed on particular days of the year. Is this a challenge for your business generally?

Milk consumption in Ethiopia is challenging due to religious beliefs and practices. We have a lot of Muslims and Christians who during particular days in the year do not consume milk and other animal based products in Ethiopia, these days are quite important in terms of the faiths of our people; their impact on milk consumption in the country is very strong. This is a challenge not only for us but for the entire dairy industry.

There are such challenges but there are equally opportunities on the flip side. If you look at the milk consumption in Ethiopia it stands at 20 liters per capita compared to 100 or so liters per capita in Kenya while the global figure is 200 liters per capita.

There is a big potential because we have about 110 million people.

We produce about 4 billion liters of milk per year against a requirement of 22 billion liters per year to match the population, leaving a deficit of about 18 billion liters a year. This is an obvious opportunity in terms of getting the quality and quantity required though the distribution.

FOODBUSINESSAFRICA.COM

Why did you go into UHT and how has it been received in the market?

At fasting time, milking and milk production still goes on and this milk that is in surplus is processed into long-life milk that can keep for 6 or so months. This can mitigate the upsurge in uptake at the close of the fasting period.

There is, however, a challenge to penetrate the market especially in Addis Ababa with UHT. Most of the long-life milk is imported and found in supermarkets. Consumers don’t know much about new brands and therefore we have been running a strong marketing campaign to inform consumers of the unique advantages of our Family Milk brand. In the upcountry areas away from Addis Ababa, there is a strong awareness about UHT products as they consume such products through the borders from surrounding countries.

How is the prevalence of milk powder impacting the industry?

In Ethiopia it’s hard to get foreign currency; it’s very challenging thus we are not very focused on reconstitution of milk powder to liquid milk because of the difficulty in importing powdered milk.

We are only using fresh milk and the market consumes majorly liquid milk rather than the powdered version.

The Ethiopian culture also has predisposed the population to liquid milk instead of powdered milk; powdered is only used in restaurants because they don’t want to be hampered by the perishability issues of liquid milk. The challenges of lack of access to forex is there but I think it’s a blessing in disguise for us.

How has the market evolved for the value added products for your company?

For cheese if there is some fasting period, we convert raw milk to cheese because it’s not our everyday product due to profitability reasons. But if we have excess fresh milk, we convert it to cheese.

The yoghurt category is a growing market but with challenges in procuring ingredients and packaging materials in caps and lids OCTOBER 2019 | FOOD BUSINESS AFRICA

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There is only one supplier of these packaging materials, meaning that lead times are frustratingly long upon placing orders.

In the eye of competition how do you rate or separate yourself from the rest?

Competition is there but to stay a head we strive to make quality products and ensure timely delivery to our consumers.

Apart from forex is there any other issue slowing your progress?

The other issue is lack of infrastructure, like power. For example, when we asked for power to one of our cooling centers far away from Addis Ababa it took too long. The other challenge is the low level of milk production that has hindered smooth supply of milk to processors. The smallholder farmers produce little milk per day and hence to meet our demand for raw milk we have to reach so many of these farmers. There are farmers associations who supply us but at times we are at their mercy because you also have to reach out to too many of them. Alongside quantity is raw milk quality. Sometimes we get incoming milk that does not conform to our standards and we reject quite a lot of the milk we receive.

To improve quality of milk, we have invested in cooling centers strategically located near the milk producers. This has helped bring down the rejection rates occasioned by lengthy transportation to our plants.

The positive side is that the government now has a program to help a new industry emerge with big farms that can manage provision of high quality milk in good quantities.

How do you buy your milk?

In some places we do bidding through formal cooperatives but, in some areas, we have an understanding with the farmers, and we negotiate the price directly with them. In a day we collect on average 30,000 liters for the three plants, though it fluctuates because of seasonality.

We absorb 12,000 liters per day into the UHT plant daily, but our capacity is bigger than this at 40,000 liters per day. However, not all the equipment is up and commissioned, so we can actually handle more than this capacity once we set up everything and produce the products that we have in mind.

What are the challenges you grapple with as you get your products into the market?

Ethiopia is a vast country!

Our market is not only in Addis Ababa, but we distribute our products in the other parts of the country through our distribution channels. Before introducing the UHT milk, our market was only in Addis Ababa but now, we have grown to towns outside the capital city. We see our entry into the UHT segment as a great opportunity for us to grow further our market away from the main cities into the smaller towns and villages. We have also began negotiations for export markets in the region.

How have you worked on your human resource side?

We are one of the largest employers in this sector; we are happy to service our customers and provide employment to our people. We are able to get the right people locally and we strive to minimize staff turn-over, showing there is dedication and satisfaction with our relationship with our staff.

The controlling body also dictates the kind of people we deploy in different functions here. The qualifications have to be function specific and relevant. For example we have fully qualified production and quality managers who understand milk processing and quality management fundamentals. These are some of the things we have to fulfil to get the various certifications with 58 OCTOBER 2019 | FOOD BUSINESS AFRICA

FOODBUSINESSAFRICA.COM

MB PLC INTERVIEW

WE ABSORB 12,000 LITERS PER DAY INTO THE UHT PLANT DAILY, BUT OUR CAPACITY IS BIGGER THAN THIS AT 40,000 LITERS PER DAY. WE CAN ACTUALLY HANDLE MORE THAN THIS CAPACITY ONCE WE SET UP EVERYTHING government authorities.

How have you set up for the future in the Ethiopian dairy space and beyond?

Our aim is to lead in the dairy sector. We want to contribute to forex earnings by growing into the export market. Our company is fairly young, having started off in 2001 - we could be the second oldest processor. Before that the sector was government run for a very long time.

The future is bright for us given the government’s push in agriculture and particularly dairy, starting with having the right genetics in the dairy cattle herds. By having the right breeds of dairy cattle alongside training and improving the quality of animal feed in the country is set to impact the sector positively going forward. There are a number of companies getting into the animal feeds space and this is welcome.

In processing we would want to strategically go into other regions as well beyond the three sites we already have. Supply and demand do not match in most of the things in Ethiopia, it is not only for dairy, but we hope to overcome that.

In future, we will look at processing powdered milk for export markets alongside packaged liquid milk. In the value added segment, for the moment we are processing only plain yoghurt but, in the future, we are looking at new packaging design and labelling and to introduce flavoured yoghurt. We are in the process of ISO certification. Hopefully in the near future we will get the new UHT plant certified and also acquire GMP certifications for all our operations from the government authorities.

How have you impacted farmers supplying you with raw milk?

So far we have three cooling centers, from where we also provide extension services to our farmers. We also supply feed concentrates to our farmers. This has increased productivity from 3-4 liters per day to 10 liters per day. There was a big rejection rate before we set up the cooling centers. This have reduced drastically while the farmers have improved their earnings and livelihoods.

We want to be the premier dairy in Ethiopia; our capacity will have to double or triple in the next few years and this is the reason we are working closely with farmers to increase the quantity and improve the quality of milk. Our strategy is to utilize the capacity we have optimally before going into any expansion plans. We will also expand our cooling facilities as demand dictates. Efficiency and modernization are key for us.

The government has introduced some new policies that will surely spur milk production in the country, for example the introduction of tax incentives on imported processing equipment, though it needs to do much more for the entire value chain through greater participation.

Ethiopia being the second most populous country in Africa and with cattle population of over 60 million is a prime spot for dairy industry. The government has realized the potential of the industry and has started improving breeds, providing vaccines and other services for the farmer as well that will place Ethiopia’s dairy sector as one with the some of the brightest potentials in Africa.

FOODBUSINESSAFRICA.COM

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Contacts us on: Tel: +254 20 8155022; Cell: +254 725 343932 Email: info@foodworldmedia.net OCTOBER 2019 | FOOD BUSINESS AFRICA

59

INVESTMENTS

Bakery and ingredient supplier Dawn Foods opens new digital inovation hub USA – Bakery products and bakery

ingredients supplier Dawn Food Products is opening of its first-ever Digital Innovation Hub in Boston, US. The Innovation Hub will play an instrumental role in developing digital solutions for Dawn’s bakery customers, as part of a larger digital transformation effort spearheaded by Bob Howland, the company’s first chief digital officer.

“By opening our Digital Innovation Hub in Boston, and investing in an area with rich tech talent, I am confident we are putting the right infrastructure in place to develop the right digital solutions for both Dawn and our customers,” said Howland.

“Additionally, these critical investments will drive added enhancements for the baking industry as a whole – from cost and time

savings to access to a wider array of products, offerings and inspirational recipes.”

Mr. Howland is currently building a team of product managers, user experience designers, engineers and software designers to build Dawn’s digital capabilities. Under Howland’s leadership, the company has added vigour to its team to help shape Dawn’s future business and digital capabilities across the food services industry.

Dawn Foods has hired Kristin Pados, senior director of product management, and Gireesh Sahukar, senior director of digital technology. Ms. Pados brings more than 20 years of experience in the tech sector, including stints at Nara Logics, TripAdvisor and Apple. She will lead the day-to-day operations of Dawn’s digital sites, build a high-performing product team

and instill an agile software development process.

Mr. Sahukar joins Dawn from Keurig Dr. Pepper and will provide technology architecture expertise, guidance, and governance to ensure platform stability, risk management and mitigation, adherence to standards and optimization. He will lead Dawn’s digital software development efforts by building and mentoring an internal team of developers and manage third-party external development teams.

The team in Boston will focus on building tools to engage artisanal bakers, digital enhancements including monthly market assessments, online ordering and 24/7 inventory management.

INVESTMENTS

Chr. Hansen plans new innovation campus in Denmark to bolster research – Ingredients solutions provider Chr. Hansen has entered into a cooperation agreement with PensionDanmark on a significant expansion of its main office campus and research & development facilities in Hoersholm, north of Copenhagen.

With the agreement, the global biosciences company seeks to expand and strengthen its research & development facilities to meet the increasing demand for natural and sustainable products.

The project includes the establishment

DENMARK

of a modern innovation campus with laboratories that will accommodate an additional 250 scientists. The company is aim at creating “future-proof facilities” for research & development to consolidate Chr. Hansen’s position in the global ingredients and microbial solutions market.

In addition to the labs, a major new application center will be established where customers can test and tailor-make products as well as develop new products in a realistic production environment.

The company said that the project

focuses on making Chr. Hansen’s campus a “modern and future-proof center for innovation, knowledge sharing and customer support, and an inspiring and efficient workplace for the employees.” Chr. Hansen’s CFO Soeren Westh Lonning said that the investment will ensure room for growth and innovation as the company gears to embrace and accommodate changes in the global market.

The first ground will be broken next year, and the new buildings are expected to be finished late 2022.

M&A

Barentz forms JV with SK Chemtrade to accelerate growth in South Africa SOUTH AFRICA – Barentz International,

a leading global ingredient distributor has formed a joint venture with South Africa headquartered raw materials supplier SK Chemtrade Services as it seeks to expand in the market.

SK Chemtrade, which has offices, development centres and warehouses in Johannesburg, Cape Town and Harare in Zimbabwe is a leading supplier raw material to the life sciences industries in Sothern Africa.

Barentz said that the venture will give it quicker access to the market in southern 60 OCTOBER 2019 | FOOD BUSINESS AFRICA

Africa, while offering SK Chemtrade the support of Barentz’s global network.

It brings in international capabilities in distributing high-quality ingredients for the food, nutrition, pharmaceuticals, personal care and animal nutrition segment.

Barentz CEO Hidde van der Wal said that the collaboration will stimulate growth in the industry. “Because SK Chemtrade and Barentz are both active in the rapidly growing life sciences industry, we are naturally cut out to be partners.

SK Chemtrade is well-known and wellmanaged and has a strong reputation.

This partnership will provide a solid base for creating robust business opportunities in South Africa and its neighbouring countries,” he added.

“Both of our companies have the same ethos: delivering high-quality products and offering technical support whenever required, with an enthusiastic approach to product development,” Mark Ferrao, Managing Director of SK Chemtrade added.

SK Chemtrade supplies materials to manufacturers of food, beverages, pharmaceuticals and dietary supplements.

FOODBUSINESSAFRICA.COM

SUPPLIER NEWS & INNOVATIONS M&A

IMCD acquires Matrix Ingredients operations in Singapore and Malaysia NETHERLANDS – IMCD, a leading distributor of speciality chemicals and food ingredients, has acquired the food distribution business of Matrix Ingredients in Singapore and Malaysia, for an undisclosed sum.

Following the transaction, Maxim Ingredients International Pte. Ltd. and Matrix Ingredients Sdn. Bhd. will be integrated into IMCD’s existing organisation. Established in 2002, Matrix Ingredients provides ingredients, technical services and formulation advice in the

savoury and processed meat segment in both Singapore and Malaysia markets.

IMCD said that the services offered by Matrix Ingredients form a valuable addition to its food and ingredients portfolio aiming to strengthen IMCD’s savoury & processed meat segment. “With Matrix Ingredients’ leadership position in the Singapore and Malaysian market, IMCD establishes a solid position in the fast-growing savoury and processed meat segment,” said Haiko Zuidhoff, Vice President, Asia Pacific.

“Together we are well positioned to deliver

accelerated growth in the APAC region to our suppliers,” Haiko added.

The acquisition builds on IMCD’s expansion strategy across various Asian markets marked by a foray of acquisitions in the recent past. The company recently bought India based Monachem Additives - which supplies and sells a comprehensive range of specialty chemicals products, in particular for the plastics industry - to support the company’s expansion in the market.

INNOVATIONS

Kerry Group launches ‘Radicle’ plant-based food solutions IRELAND – Kerry Taste & Nutrition has

launched the ‘Radicle by Kerry’ range of taste, nutrition and functional solutions as the company seeks to offer customers an integrated solution of plant based foods.

The Radicle by Kerry solutions can be paired with plant-based proteins and dairy alternatives, which Kerry says provides the broadest portfolio of plant-based food solutions in the market and aims to position the group as category leaders.

The range have been initially launched in the Europe and North America and the company plans to roll-out the products globally in the coming months. The solutions will address both meat alternatives and dairy alternatives, currently the biggest

and fastest growing categories in the vegan industry. As the global plant-based food market value is estimated to clock approximately US$23.4 billion by 2026, Kerry is capitalizing on this by presenting better plant-based foods with authentic tastes and cleaner labels.

“There is no doubt that there continues to be a mainstream consumer shift towards a flexitarian diet,” Malcolm Sheil, president and CEO, of Kerry Europe & Russia said during the launch. “Consumer preferences, from restaurants to retail, have never seen such dynamic change, but for the food industry these developments are as challenging as they are exciting. “Radicle by Kerry brings together our dairy and meat

heritage and our technology, processing and applications expertise, with over 20 years of experience in the plant-based food space.

In terms of dairy-free ice-cream and non-dairy cheese, the food solutions will optimise taste, texture, nutrition and functionality. With regards to plant-based protein such as burgers and sausages, the solutions create plant-based meat alternative products with taste, texture, functionality and nutrition. The company said that it is looking forward to innovating with customers across the foodservice and retail channels to create new and exciting dishes for the growing flexitarian consumer group.

INVESTMENTS

Tetra’s DeLaval new signs agreement to boost dairy industry in China CHINA – DeLaval, a subsidiary of Tetra

Laval which supplies equipment to the dairy industry, has signed a new agreement with China Agricultural University to further improve efficiency in the dairy industry in China.

The new agreement builds on 30 years of cooperation between the two countries, Sweden and China, through the SinoSwedish Dairy Cooperation programme.

Pressured by the shortage for raw milk as well as the rising demand for dairy products, this new agreement will enhance the sustainable and profitable future of the dairy industry in both countries. The new Sino-Swedish Dairy Cooperation Quality FOODBUSINESSAFRICA.COM

and Efficiency Project, running from 20202024, will operate under the agricultural cooperation MOU signed between China and Sweden in 2012. The project seeks to further rejuvenate the dairy industry and improve the quality of domestic dairy products, as defined by the goal to increase the yield per cow.

It combines theory with practice, consisting of four modules: theoretical training, dairy field, case teaching and overseas training. The programme covers dairy farm management, dairy breeding, nutrition, animal health, as well as environmental aspects.

According to a Daily China report, the

demand for dairy products in the Asian country is rising and expected to grow at a compounded annual growth rate of 1.5% through 2023, driving demand for raw milk with annual growth of nearly 5%.

However, China’s dairy industry is facing a critical imbalance between supply and demand for raw milk as domestic cow stocks and raw milk production are decreasing significantly. In 2018, the average yield per cow in China was 7.4 tonnes. The new project marks yet another landmark towards enabling China meet its dairy requirements. In accordance with China’s plans for the dairy industry, the project will help achieve a change to 9 tonnes by 2025.

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SUPPLIER NEWS & INNOVATIONS INVESTMENTS

Food packing machinery manufacturer Ishida opens regional office in Kenya KENYA – Ishida, a Japanese multinational manufacturer of food packing machinery, through its Birmingham-based subsidiary Ishida Europe has opened a regional office in Nairobi, Kenya.

The Kenyan office will operate as the company’s regional hub serving the East African Market. Ishida has since 2014 been taking part in a number of trade missions across Kenya, Ethiopia, Uganda and Rwanda, with a strong presence in the region that will be reinforced by the new office.

According to the company’s President, Takahide Ishida, Ishida targets to tap into the country’s manufacturing sector which has shown interest in new and advanced technology. “Kenya is a country that has shown great potential in embracing newer technologies and as well, has the appropriate conditions for establishing such enterprises,” said Mr Ishida.

Officiating the launch, British Deputy High Commissioner Susie Kitchens said Ishida brings expertise, technology and

skills to Kenya. “Ishida joins a formidable partnership between the United Kingdom and Kenya which underpins a strong trade relationship. The launch of Ishida Europe is just one example of how strong trade and investment ties continue to grow creating even more opportunities for our businesses and consumers,” said Ms Kitchens.

ISHIDA TARGETS TO TAP INTO THE COUNTRY’S MANUFACTURING SECTOR WHICH HAS SHOWN INTEREST IN NEW AND ADVANCED TECHNOLOGY. Ishida’s move to venture into the Kenyan market comes a time when the East African food industry is growing with both increasing demand in domestic markets and opportunities for export.

The move to more pre-packed and valueadded food products is driving the need for accuracy and consistency in packs, both

to protect margins and to meet consumer and retailer demands for enhanced quality of both product and packaging, adds the company.

The food packaging machinery manufacturer, headquartered in Kyoto Japan makes weighing, packing, inspection equipment and packing line systems for food and non-food industries. The company uses its unique expertise and experience to develop advanced automated systems for handling food and non-food products alike.

Ishida is strategically planning to supply its multihead weighers which can deliver pinpoint weight accuracy, snacks bagmakers to produce high quality packs, and checkweighers to provide effective monitoring and compliance with weight regulations for export markets.

The new office in Nairobi will be led by sales manager David Mulwa and Service Engineer Daniel Ambuka.

INVESTMENTS

Symrise opens first flavour application labs in Nigeria to support growth in West Africa

NIGERIA – German flavour and fragrance manufacturer, Symrise has opened its first applications labs in Lagos, Nigeria as part of a growth strategy to strengthen its presence in the growing West African market.

Symrise will utilize the facility to develop flavours for various application areas, in particular for beverages, sweet applications and savory foods, as well as fragrances and cosmetic ingredients.

Symrise said that the overarching goal of the new application labs is to boost the development of products which 62 OCTOBER 2019 | FOOD BUSINESS AFRICA

meet local customer preferences and market requirements. The labs will also simultaneously increasing the speed at which these products come to market.

The flavor and fragrance manufacture company said that the expansion will support its growth ambitions of meeting the local preferences of regional customers as closely as possible. “This will strengthen our presence and underpin our growth goals in the region,” says Rudy McLean, managing director at Symrise South Africa, building on the current sales office in Nigeria. “With these application labs, we can create products in the market for the market. We can deepen our understanding of the preferences and needs of local people and – where possible – use local raw materials,” adds McLean.

Symrise has been active in the country for over 30 years, and the company claims that during this time its has worked intensively to familiarize itself with the local markets.

“With more than 190 million inhabitants, Nigeria is by far the most populous African nation and a key regional economy. With this new investment, we are enhancing our local footprint and intensifying our long-term commitment to Nigeria and the region,” says McLean.

The company said that the new facilities will enhance the operations of its current sales office in the country.

Symrise’s global expansion comprises the setup of application laboratories in key growth markets. The company is currently investing in research on the best cultivation conditions for vanilla in specifically designed fields in northern Madagascar, where it is sharing the expertise gained from the tests with local partner farmers.

The project currently works with around 7,000 smallholder farmers in 90 villages and seeks to help increase yields and ensure consistent premium quality of vanilla.

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