Procter & Gamble sees growth opportunities in Africa
Emerging markets were the markets of the future and the potential for the retail industry in Africa was "absolutely huge", Standa Vecera, vice-president of Procter & Gamble’s Southern and East African operations, said last week.
In the past decade, the US consumer goods group has grown its African business more than tenfold.
"Countries like Africa, China, India and Brazil are the markets of the future because that’s where the population is, that’s where the growth rates are," Mr Vecera said. "Outside South Africa, the way retail is conducted is through very small, high-frequency stores, where people shop on a daily basis -- there is big opportunity in Africa."
Following a slowdown last year, emerging markets are poised for strong growth in the next two years.
The Economist Intelligence Unit predicts that sub-Saharan Africa will see growth pick up slightly, to 4.4% this year and to almost 5% next year.
"Several of the oil-exporting countries in the region, including Angola, Cameroon, Chad, Equatorial Guinea and Ghana, will benefit from rising hydrocarbons output. New mining production in several countries will also be a positive factor for growth," it said.
Urbanisation and rising affluence are fuelling a consumer boom on the continent with a rising middle class demanding high-quality brands and modern goods.
"We are seeing consumption in our categories growing. It’s because of economic growth and people having more money, but it’s also about making sure that they have access to products they want," Mr Vecera said.
Procter & Gamble’s (P&G’s) brands include Gillette, Pantene, Duracell and Oral-B.
In line with its aim of making South Africa its manufacturing hub for the Southern and East African market, P&G last month said it would invest about R1.6bn to build a multi-category manufacturing plant. Construction of the new plant‚ which will be one of the largest P&G facilities in Europe‚ the Middle East and Africa‚ is expected to commence next year, with production targeted for 2016 or early 2017.
