South Africa’s biggest consumer food producer, Tiger Brands, plans to expand operations beyond its home market into North African countries, among others on its radar. Data compiled by Bloomberg revealed that almost 90 percent of its sales in the six months through March were from South Africa, its biggest market.
Plans for growth outside its home market of South Africa had been delayed for over six months due to a deadly bacteria outbreak that was traced to its Enterprise meat factory in Polokwane South Africa. Chief Executive Officer Lawrence Mac Dougall in an interview with Bloomberg said Tiger Brands wants to ensure the situation at home is under control before it ventures elsewhere.
Earlier in March, the Health Minister, Aaron Motosaledi announced that a deadly bacterium outbreak, Listeria has been traced to Tiger Brands’ meat factories. The deadly Listeria was linked to cold meat products known as Polony produced by the company.
Tiger Brands also has since, closed its Germiston, Pretoria and Polokwane sites and plans to wind down operations at its Clayville abattoir, in Gauteng by the end of March.
As the continent’s biggest listed packaged-food maker, Tiger Brands also has plan for expansion to other parts of the continent as its still developing its ‘rest-of-Africa’ strategy, Dougall said. “Obviously sub-Sahara is easier to play because it’s closer, but our strategy is looking at the total Africa,” he said. “You have to look where the trading zones have been constructed.”
With direct and indirect interests in international food businesses in Chile, Zimbabwe, Mozambique, Nigeria, Kenya and Cameroon, Tiger Brands also plans to select several countries to move into as part of the new strategy, though its still working out details.
“We are first looking at the country lens, then the category lens,” Mac Dougall said. “What’s the size of the category, does it play to our core business and what is our ability to win?”
“On-the-ground and bottom-up” model will be employed by the company while ensuring the marketing and support of the products that will first be shipped from South Africa, said Mac Dougall.