
THIS ISSUE: 04 Feb - 10 Feb
YOUR NUMBERS THIS WEEK
RETAILERS AND WHOLESALERS
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ADC Clearly, he “Mo’s” his stuff… oh, shut up.
British-Sudanese telecoms mogul Mo Ibrahim is joining forces with Portuguese retailer Sonae to buy a Mozambican supermarket chain once owned by Pick n Pay. Extra supermarkets are currently owned by the local outfit ADC, which bought them from Pick n Pay in 2013 when The Big Blue bailed on Mozambique after failing to make a profit. Ibrahim, whose Satya Capital business is partnering with Sonae in a retail investment vehicle called S2, has had a stab at the East African market before, attempting to partner up with Kenyan retailer Nakumatt in 2010. ADC is a good start: it has 25 stores in Moz, including 15 in Maputo, selling a mix of branded and private label goods. As an aside, Mr Ebrahim’s charitable foundation presents a valuable award to African leaders who lead well and then exit office without any undignified whining about a third term.
Comment: Pick n Pay’s loss is ultimately Mozambique’s gain, by the sound of it. Shame it didn’t work out for our guys though.
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Retail Property It’s a “mall” world, after all… oh, shut up.
According to Pam Golding, what you want is a smallish, niche, upmarket shopping centre right next door to your sectional title unit to drive up your property prices and expand the extent of your eventual nest egg. Pam Golding would know, having opened up a snazzy little mixed-use retail and office number in Kenilworth Main Road, anchored by a pocket Pick n Pay, and modestly known as Pam Golding on Main … oh, ho, ho, we see what they’re doing there: make a tidy sum out of opening a little mall in a posh spot, then make an even tidier sum selling R5m duplexes to people who prefer to be within walking distance of the nearest croissant. Then set the scene for future deals of this nature by talking up the investment potential of townhouses located attractively close to chi chi malls.
Comment: Devilish. Although we ourselves do like a nice little mall when we can find one.
MANUFACTURERS AND SERVICE PROVIDERS
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Nampak Boxing clever
Over at the Reserve Bank, Tito Mboweni was unaccustomed to probing questions from cheeky activist shareholders, unless you count us at the Trade Tatler when he raised the repo rate once too often. Now he’s the Chairman of the Nampak Board, different story. At last week’s AGM, shareholder Chris Logan was banging on about how it might be sensible for Nampak to impair the value of its substantial operations in Angola and Nigeria, given that the artificially pegged currencies of those oil-dependent geographies could expose Nampak to foreign exchange losses of up to R500m. Following so far? Good. Chairman Tito, as we still like to call him, averred that Nampak was still committed to growth in Africa, as it is a continent whose “time still has to come.” In FY2015, Africa, excluding the Beloved Country, contributed 27% to Nampak’s revenue and 48.5% of trading profit. 31% of capex went north, including a R425million investment in Angola.
Comment: Like Nampak’s millions, the oil price will head north once more, and Chairman Tito will rest easy in the knowledge that he’s done the right thing by the shareholders.
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CHEP Happy New Year!
China: a land of contradictions, known both for its massive clouds of smog and its breakthroughs in green energy, its ancient culture and its bold claims on the future… that China. Anyway, one of the other things they’re busy revolutionising at the moment is the supply chain, which given a population of a billion or so makes sense. According to a joint research project by CHEP and the Chinese Academy of International Trade and Economic Cooperation (CAITEC), the Chinese government has taken great strides towards both standardisation and fluidity in the country’s FMCG supply chains, but more work is to be done. This includes the development of standards for pallets (natch), of vehicles and facilities through the use of policies and financial incentives; and the promotion of good practices through stakeholder education.
Comment: CHEP have always done sterling work in the promotion of supply chain efficiency across the industry. Great to see them wielding this positive influence in the world’s largest economy.
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Mondelez And in other news, Coke Adds Life!
Snacking giant Mondelez (Cadbury’s, Oreo’s, Philadelphia, you get the picture) has apparently done the dirty on rival Nestlé by sponsoring a bit of brave investigative journalism by the Guardian into slavery and child labour, in which Nestlé features because of cases in Thailand and Ivory Coast. Mondelez argues that it merely sponsored the piece, and was not involved in the writing thereof. The controversy highlights the issue of “native content” – which used to be known by its less opaque title of advertorial – and which has rendered suspect the reporting of some of the world’s most trusted websites, including that of the New York Times and indeed the Guardian.
Comment: An unfortunate result of the media’s desperation for a buck and industry’s generously broad understanding of what you’re entitled to get for that buck.
TRADE ENVIRONMENT
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Agoa So two months agoa… oh, shut up.
After the recent unpleasant scuffle over imported chicken, trade relations between the US and South Africa are on the mend, and talks are proceeding to give greater access to the US market to our agricultural products. Litchis have already got a free pass, and avo’s, mangoes and beef are soon to follow. Currently, our citrus, wine and macadamia nuts make their way over, scoring us R2billion annually. While there are some sanitary and phyto-sanitary issues (the same sort that almost derailed AGOA over chicken imports) to be ironed out, these are routine and do not threaten the deal. And in other heartening news, the ANC’s national executive has asked for a briefing on what international trade deals have been entered into since 1999, with a view to understanding rather than derailing them.
Comment: And in this economy, every cent helps.
IN BRIEF
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French Vive les Leftovres!
French supermarkets with a footprint of 400m2 and over will now be required to donate unsold food to charity rather than spoiling it or binning it, according to a law passed by the senate last week. This as part of an initiative to increase the quality and diversity of food available to food banks, which are currently short of fruit and veg but have too much meat. The bigger idea is to one day secure an EU-wide ban on food waste.
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Coca-Cola A “juicy” deal… oh, shut up.
We’re a little slow off the mark on this one, but last month Coke made its biggest overseas acquisition since 2012: a 40% stake in Nigeria’s largest juice marker, TGI Group’s Chi Ltd, with plans to buy the rest within three years. The beverage giant plans to have spent a whopping $17billion in Africa in the decade leading to 2020, as soft drinks lose their fizz in Europe and the US.
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