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Title: Nestlé Equatorial African Region – an overview
Name: Pierre Trouilhat
Date: 28th January 2011
My Background
1. Pierre Trouilhat, married to Pascale and father of 2 children
2. Graduated from EMLyon with a Masters in Business in 1979
3. Joined Nestlé in France in 1981
4. Worked in Switzerland, Togo, Algeria, Guinea, Syria, Iran before being tasked with the creation of the Equatorial African Region in 2008
5. One employer for 31 years: Nestlé
To update photo
The Nestlé Group
1. The World’s Largest Nutrition, Health and Wellness Company
2. Sales over CHF 109 billion in 2010
3. Market Capitalization of USD 175 bio
4. 280,000 employees worldwide
5. 443 factories in 81 countries
5. 10,000 products worldwide
6. 1+ bio products sold daily
7. CHF 2 bio invested in R&D every year
8. 5200 people in R&D
The Nestlé Group
Nestlé in Africa
1. Nestlé commercially present in Africa since 1880s
2. First factory in South Africa in 1927
3. Today, 28 factories and 4 more under construction. One R&D Centre in Abidjan, Ivory Coast. 15000 employees.
4. USD 850 mio investment the last 5 years and USD 1 billion in the next 2 years
5. Africa – divided into 5 different regions
1. North Africa2. Central & West Africa3. North Eastern Africa4. South African Region5. Equatorial Africa
6. EAR was only added to the list in 2008
To update
Nestlé’s strategy in Equatorial Africa
Our Ambition:To be recognized in Equatorial Africa as a highly respected and trusted Nutrition, Health and Wellness company
Our Objective:To provide affordable nutrition to our emerging consumers through our NHW and PPP strategies
Our Must Win Battles:1. Industrialization: Invest in Finishing Factories to reduce dependence on
imports, to have flexibility on formats and labels, and to ensure improved product availability at the most optimal cost
2. Route-To-Warehouse: Deliver the right products at the most efficient cost: either from inside/outside region, relying on the most efficient regulatory scheme (trade agreements) and delivery corridors
3. Route-To-Market: Structuring Channel Management and fostering sales through Distributor Management Best Practice supported by strong Brand Activation
4. Accelerating Through ‘PILLAR’ Brands based on Consumer Insight: PPP growth drive through brand activation
5. Performance Culture and People’s Plan: Induct, develop and retain regional talent
Nestlé in Equatorial Africa
Total Population: 405.4 million
Operating Companies in 7 countries
Representative Offices: 4 countries
900 employees
3 factories
10 Distribution CentersCHF 150 mio investmentpackage announced in 2010
Headquarters
Nairobi
Our investment plans
Upgrade of Existing FactoriesIn Nairobi and HarareKingabua Factory in DRCongo2 more factories in Angola and MozambiqueNew product portfolio based on PPP & Nutrition StrategiesNew distribution model to ensure adequate product coverage in the regionIncrease in local raw material sourcing. Strategy was to move from 75% imports in 2008 to 75% local production by 2016
Headquarters
Nairobi
Challenges
5. Distribution and Route-to-Market
1. In many countries, unstable political and economic environment
2. Inefficiencies in infrastructure, logistics, legislation and governance
3. High cost of doing business
4. No feeling of national interest
6. Limited talent pool
Why is Nestlé investing in Equatorial Africa
2. Demographics: Population Growth and Age
4. Highly aspirational emerging class, more conscious about nutrition
5. Food and Beverage will account for more than 50% of their expenditure6. As we move up the social ladder, increasing demand for packaged foods and convenience products
3. Rising Income
1. Strong Economic Growth in most EAR countries
LIMITLESS OPPORTUNITIES
Why is Nestlé investing in Equatorial Africa
E
C1
39% 156 Mio
3% 12 Mio
12% 48 Mio
Total Population400+ mio
Human Poverty Line
46% 184 Mio
C2D
Sources: CIA World Fact book (2008), UNDP Human Development Report (2006), Research International Pan African LSM study (2003-2005), US Census Bureau, International Database (2007)
Urban Population106 mio
19%15 M
io
18% 1
4 Mio
13%10 M
io
Human Poverty Line50%
40 M
io
Deprived A
frica
Rising
Africa
Emerging
Africa
Global
Africa
A/B
>$500 p. mth
>$200 p. mth
>$50 p. mth
<$38 p. mth
To update
Our Values:Creating Shared Value
CSV is a way of life at Nestlé: In whatever we do, we must bring value to both our shareholders and society at the same time.
Creating Shared ValueSome of our key projects in EAR:
East Africa Dairy Development Project: KenyaCoffee SAIN Projects: Uganda, Tanzania, soon in Kenya and in Ethiopia
Nestlé Dairy Empowerment Scheme: Zimbabwe
Nestlé Healthy Kids Program: Mauritius, Kenya, Zimbabwe, Mozambique, DRC
Nutrition and Fortification Awareness Campaigns: Mauritius and Mozambique
RURAL DEVELOPMENT
NUTRITION
WATER
Water & Environmental Sustainability: Kenya
Community Development: Mozambique
Water to Rural Dairy Communities : Kenya
Our Values
1. Our people: The Management and Leadership Principles
2. Our people: The Code of Business Conduct
3. Our Partners: The Corporate Business Principles
4. Our Supply-Chain: The Commitment to Responsible Sourcing
5. Our Ethics: Responsible advertising to children
6. Many other policies that dictate our way of doing business
Key Messages for today
1. This is a business venture that represents immense business opportunities
2. The time to invest in Africa is NOW
3. We must think long term
4. We must have the right strategy, systems and resources to operate
5. We must operate with the highest ethical standards
6. We must create shared value and be a good corporate citizen in the countries in which we operate
7. We must be patient
Thank You