Unilever East and Southern Africa: Retail excellence on a global scale

One of the effects of technology has been to create a sense of globalisation for industry. That in turn has created a series of multi-national corporations that seem omnipresent throughout the world. In the retail arena that is perhaps best exemplified by Unilever, the company that started out in the Netherlands and has grown into a true global giant.

Indeed the company’s own website admits as much: “No matter who you are, or where in the country you are, the chances are that our products are a familiar part of your daily routine. Every day, all over the country, people reach for Unilever products.”

teaIt came as little surprise then to learn in March that the company, now the world’s second-biggest consumer-products maker, plans to open a manufacturing plant in Ethiopia during the next year in a bid to emulate its expansion into Vietnam.

The company is renting premises for a plant in the Chinese-built Eastern Industry Zone in Dukem, 31 kilometres southeast of Addis Ababa, Dougie Brew, head of corporate affairs in Africa confirmed.

Unilever, which already imports Knorr stock cubes and Omo detergent into Ethiopia, may initially make fabric-cleaning soaps before moving into food, he said from London.

“The plans are ambitious for Ethiopia because we see it as a growing market; we’ve taken a long-term investment decision in Ethiopia because of the demography, broad-based growth and opportunity to create a genuinely inclusive and sustainable business model from scratch.” 

Unilever was formed back in 1930 when Lever Brothers (UK) and Uni-margarine (Netherlands) merged to create what has grown into one of the world’s leading Fast Moving Consumer Goods (FMCG) companies with reported turnover of more than 4.3 billion Euros.

The parent group has its Corporate offices in London and Rotterdam and operationally the geographical footprint of Unilever stretches across 100 countries, with the company employing roughly 250,000 people. 

“The company spends 2.5 per cent of its turnover on research and development and 1.5 per cent on Corporate Social Responsibility. Unilever directly employs 250,000 people around the world and indirectly millions more as contract manufactures, growers, suppliers, distributors and service providers.

“Everyday 150 million people choose our brands to feed their families and clean themselves and their homes. To meet their needs our business is therefore categorized in three areas; Foods, Home care and Personal Care products.

“Unilever is a manufacturer of some of the world’s leading foods, home and personal care products such as Blue band and flora margarines, Knorr and Royco, Ice cream, Lipton tea; and Omo; Lux, Dove, Lifebouy, Geisha and Sunlight soaps; Vaseline, Lady gay; Close up tooth paste.

“In addition Unileveris involved in the growing, buying, manufacturing and marketing of tea. This is done alongside, fuel wood production, sustainable agriculture, research and development,” the corporate website describes. 

And in the context of the global Unilever brand, Unilever East and Southern Africa (ESA), a Unilever Subsidiary, is pivotal to its success.

Unilever ESA operates in Kenya, Uganda, Tanzania, Zimbabwe, Zambia, Mozambique and Malawi and covers a market of 19 countries with a population of 150 million people in ESA. 

In this region Unilever operates 2 businesses, the Consumer business dealing with FMCG and the Tea plantations business in Kenya and Tanzania. 

The plantations business is the biggest employer in Unilever with a workforce of 25,000 while the Consumer side is responsible for over 1,500 employees.

Additionally the company has over 120 distributors spread across the 7 countries reaching more than 100,000 retail outlets each week. 

“Our mission is to add vitality to life. We meet everyday needs for nutrition; hygiene and personal care with brands that help people feel good, look good and get more out of life.

“Because our vitality mission is rooted in the intimate understanding of people’s needs and aspirations, it inspires new ways at Unilever East and Southern Africa to reach consumers with quality products that care for their families and help them get more out of life. To achieve this aim, we maintain the highest standards of corporate behavior towards our employees, consumers, customers and indeed our operating environment,” the company states.

Of course Africa offers a world of opportunity to the entrepreneurial spirit and in recent months The SA-Mag has highlighted how some of the region’s leading retailers have expanded their footprint beyond South Africa and into the Continent.

Unilever appears set to follow suit having invested $130 million in Vietnam as the business grew annually at more than 10 per cent for 14 years after opening in 1995 and according to Mr Brew, is looking at a “similar scale” operations in Ethiopia.

The company plans to build a “comprehensive consumer-goods manufacturing business” in Ethiopia, which will source from Ethiopian suppliers, Mr Brew said. “Retail is still a restricted sector so a lot of our work will be developing local Ethiopian companies that will act as distributors.” 

Development in Ethiopia is of course hugely exciting but Unilever has had a presence in ESA since the turn of the century and considers itself among long term players with very deep roots in the region. 

Yaw Nsarkoh, Former Managing Director for Unilever ESA and now in charge of the company’s Nigerian operations, described the dynamic nature of the business but the importance attached to maintaining local knowledge: 

“ESA headquarters are in Nairobi, but in a FMCG business it is not where the HQ is that matters most, it is where the markets are. We are represented in the market and we try to stay as close to our consumers and shoppers as possible.

“We compete to win in the market place and we believe very solidly that growth and profit are distributed by the shop and consumer. Our vehicle for reaching the shop and consumer is our brand portfolio, so we have a strong understanding of consumers and communities in which we operate.

“Add to that our ability to deploy this knowledge in building strong portfolios brand and a picture emerges as to how we really compete and ensure we differentiate as an FMCG,” he explained.

Unilever is also able to call on its knowledge base, technology and experience on a global basis to improve operations and quality standards, as the corporate website highlights:

“Our plantations worldwide are leading centres of agricultural research, innovation and sustainable agronomic practices. Our quest for excellence is explained by the fact that we spend more than 1 billion Euros a year, 2.5 per cent of our turnover on research and development. 

“114 of our global manufacturing sites are certified to the International Management Standards, ISO 14001.

“We have a portfolio of brands that are popular across the country. Popular because of our two key strengths: strong roots in local markets and first-hand knowledge of the local culture; plus world-class business expertise applied internationally to serve consumers everywhere.”