Every day, around 2 billion people worldwide buy a Unilever product. The company is the largest manufacturer of consumer goods in the world, and has been successful in penetrating low income markets in Sub-Saharan Africa with simple innovations, such as creating ‘single serve’ versions of its products, which can be sold at a low price point.
This strategy means that the company reaches between 30-40% of the continent’s population, according to Bruno Witvoet, Unilever’s executive vice president for Africa — a total of 300-400m people.
While in the past Unilever has imported a lot of its products into Africa, it is now expanding its manufacturing base on the continent. The company has recently opened an ice cream factory in South Africa, a mayonnaise factory in Côte d’Ivoire and a plant producing Vaseline in Kenya.
“There is — as a continent — a real opportunity to continue and accelerate the growth [in manufacturing],” Witvoet told CNN.
“I think in a period of four years, we would have invested around €450 million on the entire continent to increase our manufacturing footprint.”
Manufacturing in the continent
Building domestic manufacturing capacity is important for business who want to participate in high-growth markets in Africa, according to Witvoet.
“Having a local manufacturing footprint is absolutely key to being competitive in most of the African markets,” he says.
Unilever needs to invest, Witvoet says, because the growth in African consumer markets has attracted competition from global and local players.
“The competitive environment is tough because everybody has been talking about Africa for the last three or four years,” he says.
“You can see all the global competitors entering the markets… competition has been much tougher over the last 2-3 years. And we see also very good competition from emerging local players… competition is very sane, it might bite a bit of your market share short term, but it may raise the challenge, it’ll raise your alertness and you have to respond to that.”