BMI's Executive Summary

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South African companies involved in the food industry have recently been looking abroad to other regional markets for growth opportunities, as discussed in BMI's recently published South African Food & Drink Report for Q108. First in October, Nampak, Africa's largest packaging producer, announced that it will invest ZAR600mn (US$68.9mn) to build a beverage can manufacturing facility in Angola, its first venture in the west African country. The factory will be located in Viana, a newly established industrial area close to the capital Luanda, and will have an annual production capacity of 700mn cans. The plant, which should be operational by mid 2009, is one of the most significant greenfield investments in the company's history. This investment is part of a series of growth initiatives which involve investing in high-growth areas and partnering with customers in new territories, with the company investing over ZAR1.5bn (US$220mn) this past year. Nampak produces a wide variety of packaging products and has production facilities in Ethiopia, Kenya, Malawi, Mozambique, Namibia, Nigeria, Swaziland, Tanzania, Zambia and Zimbabwe, as demand for its products has been increasing across the continent. Meanwhile, with European and American duty concessions on African imports, the market for African exports has further expanded.

Then in November 2007, Illovo Sugar, Africa biggest sugar producer, announced that it will invest GBP100mn (US$205.8mn) in building sugar facilities in Mali. Illovo is a leading, global, low-cost sugar producer and a significant manufacturer of high-value downstream products, with extensive agricultural and manufacturing operations in South Africa, Malawi, Zambia, Swaziland, Tanzania and Mozambique. The investment will be used for the construction of a new sugar mill as well as for an ethanol plant and an electricity co-generation unit. Illovo will hold a 70% stake in the investment, while the government of Mali will hold the remainder. The company will also manage a local government-sponsored agricultural development project to produce 1.5mn tonnes of sugar cane annually, which will be required by the new facility. Sugar production should begin by year-end 2009, reaching full capacity within two years. At full production the mill should produce 200,000 tonnes of sugar annually, while the ethanol plant will produce 15mn litres annually. Illovo has been steadily expanding its sugar production throughout Africa in anticipation of the EU opening its markets to developing countries starting in 2009.

With a current global sugar production deficit, world raw sugar prices have been highly volatile in recent years, soaring in 2006. With the EU reforming its sugar regime and opening up its markets to developing countries starting in 2009, there have been growing business opportunities for South African companies. Despite decades of isolation under apartheid, the business infrastructure is modern, enabling South Africa to serve as the financial and business hub of the continent. As business opportunities on the continent continue to expand, South Africa's companies will be in a strong position to benefit.

Contents

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Chapter 1 – Business Environment

SWOT Analysis

South Africa Food & Drink Industry SWOT

South Africa Political SWOT

South Africa Economic SWOT

South Africa Business Environment SWOT

Economic Forecasts

Table: Economic Indicators

Chapter 2 – Retail

Regional Overview – Discount Retailing

Table: Discount Store Sales in US$bn

Table: Key Players in Discount Retail

Industry Forecast Scenario

Table: South Africa MGR Sector - Sales Value by Format - Historical Data & Forecasts

Company Developments

Market Overview – South Africa

Table: Structure of South Africa’s Mass Grocery Retail Market by Number of Outlets

Table: Structure of South Africa's Mass Grocery Retail Market - Sales Value by Format (US$bn)

Chapter 3 – Food & Drink

Industry Forecast Scenario

Table: Food Consumption Indicators - Historical Data & Forecasts

Table: Value/Volume Sales - Selected Food Sub-sectors

Table: South Africa Beverage Sub-Sectors - Value Sales History & Forecasts

Industry Developments

Company Developments

Market Overview – South Africa

Table: South Africa Agricultural Sub-sector Production – Historical Data

Table: Macroeconomic indicators

Chapter 4 – Tobacco

Industry Forecast Scenario

Table: Cigarette Value/Volume Sales - Historical Data & Forecasts

Industry Developments

Company Developments

Market Overview

Chapter 5 – Competitive Landscape

Key Players

Table: Key Players in South Africa’s Mass Grocery Retail Sector

Table: Key Players in South Africa’s Mass Grocery Retail Sector - continued

Table: Key Players in South Africa’s Food & Drink Sector

Company Analysis

Distell Group Ltd

Woolworths

Shoprite

SPAR

Pioneer Foods

SABMiller

Tiger Brands

Illovo Sugar Limited

BMI Forecast Modelling

How we generate our industry forecasts

Retail Industry

Sources

Competitive Landscape for Middle East & Africa Food & Drink Reports: Sample of  
Companies Ranked

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At-a-glance perspective on the strengths, weaknesses, opportunities and threats facing each market’s food & drink industry. BMI also provides similar economic and business environment studies. Company SWOTs (Strengths, Weaknesses, Opportunities, Threats) covering all leading food and drink companies operating in each market, including competitive intelligence on geographic presence and competitive positioning of multinationals against local companies; leading products, services and brands; sales and local market share; foreign direct investment, projects, partners and acquisition strategy. Illustration of the industry via rankings tables comparing revenues, number of outlets, number of employees and registration dates. BMI analyses each company’s performance, market position, strategy and investment potential.

Network of Middle Eastern & African Food Sources

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BMI's Middle Eastern & African Food Reports are based on an extensive network of multilateral organisations, government departments, food industry associations, chambers of commerce and company reports. Information sources include: