What's happening with fx, in South Africa and beyond?
Welcome to Trendtype's latest newsletter. Before we start, we have a couple of interesting webinars in June, all free to register:
Next week: Access to FX update
Late June: Emerging Grocery Retail Trends in South Africa
Sometimes a thing happens and it is recognised much later as important. We think the opening of a new $1.6m premium chocolate factory in Cameroon by French industry veteran Olivier Bordais could be it. Cocoa is only produced in tiny number of countries, many of whom want to permanently reset prices and/or have more value added locally. So far, only one chocolate major - Ferrero - manufactures close to cocoa farms in Africa. The importance of Bordais' Cameroon factory is how it could change what provenance means for super premium chocolate and how that could escalate down to mainstream brands.
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These are the pick of the news stories we have covered recently. In South Africa the big news is the hole Pick n Pay is in and what recovery looks like. Unrelated, Amazon has entered South Africa and hopes to take on Takealot and a surging Checkers Sixty60.
In Kenya, ecommerce players continue to be under funding pressure. Buying platform Copia was unable to agree terms for more funding and has elected to go into administration. Rival Twiga will almost certainly need more funding in the next 3 months.
In Nigeria Kimberly-Clark has closed up shop. No manufacturing. No import. It's out. It's not the first big name manufacturer to exit or restructure and we think more agile, localised conglomerates will be looking forward to picking up the factory for cents in the dollar.
The final big story is around super distributor Dislog in Morocco, which is raising a $45m war chest to keep its run of acquisitions going. Dislog is active in FMCG manufacturing, distribution, the pharma sector and it also venturing into niche brand distribution in Europe.
We keep emphasising to our clients that there is a lot in play: some markets, like Kenya, are bounding back. Others, like Cote d'Ivoire, have remained strong for some time. Shipping rates are going through the roof. The price of oil is holding, for now. Consumer price inflation is coming down, albeit slowly. It pays to pay attention.