Success in Africa: CEO Insights from a Continent on the Rise by Jonathan Berman

Author:Jonathan Berman
Language: eng
Format: mobi
ISBN: 9781937134471
Publisher: Bibliomotion, Inc.
Published: 2013-09-09T14:00:00+00:00

Two years later, they came to us and said, “Are you still interested?” By then, we had partnered with [Malaysian agribusiness] Wilmar, who were already in the plantation business. Wilmar asked, “Ten thousand hectares is viable but what’s the growth opportunity?” So we told the government this time that we wanted thirty thousand hectares (seventy-five thousand acres) of commercial plantation.

Though it was six times the acreage the Ugandan government originally planned to approve, the government had spent two years failing with an operator who did not have the vision or experience to succeed at scale. “So,” Vimal concludes, “they agreed. We got to work, laying the infrastructure, clearing the land, putting in all the housing, recruiting and training personnel, and building the processing plant. Today we have a fantastic product.” As of January 2013, Bidco had twenty thousand acres under cultivation in plantation and another three thousand in outgrower cultivation, and is producing palm oil for the East African market. Bidco now looks at all expansion opportunities through the lens of backward integration. The company has deployed its competencies in Arabica coffee and cut flowers, and is currently examining opportunities for backward integration in cereals.

There is some caution to be expressed with regard to building what you need. Most of Africa is only now developing a robust processing and manufacturing sector, and progress is uneven. As figure 5–2 shows, African industrial production as a portion of GDP hovers between 5 percent and 15 percent, depending on region and year. That is far lower than even other emerging market regions.

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