Many think of Africa as one country – but in reality, it is a huge continent, somewhat unknown beyond Libya and the North African territories. Africa consists of 54 countries, all distinct from each other, and has the potential to become the world’s largest free trade area during this century. With a combined population of more than one billion people, it holds some of the fastest growing economies in the developing world, in some cases exceeding the economic growth of many Western countries.
So it’s no surprise that many corporations, including Maltese ones, are looking at Africa as the next frontier.
In the latest episode from TradeMalta’s series ‘International Insights – Stories from the Real Economy’, entitled ‘Off to Africa’, Dr Joe Schembri meets Chris Muscat, CEO of Hudson, which distributes Nike and other top brands in 24 African countries, and Karl Aquilina from Salvo Grima Group, which runs a logistics operation employing 80 people in Rwanda.
“We’ve been active in Africa in the early 1980s. Like many companies our first experience was going to Libya,” Aquilina says. “Today, our footprint consists of Libya, Tunisia, Djibouti and Rwanda. We operate in two different areas – distribution of FMCG for multi-nationals, and we also operate in travel retail, what you would call duty free shops.
On the other hand, for Muscat, Hudson’s first operation was in Nigeria.
“We’ve been doing business in Africa for a decade, with our first operation in Nigeria. Our business is distribution of sporting goods – we distribute Nike in 34 countries, as well as other brands such as The North Face and Vans.”
Hudson started as distribution managers. “However, that did not succeed as much as expected,” says Muscat. “Nowadays, we are direct distributors, with 60 per cent of our distribution is sports – but we also do retail, with direct operations in Morocco, Nigeria and Algeria. We do fashion, sports and our own franchise, Urban Jungle.”
There is huge potential in Africa – with a growing, young market. How should a company prepare to operate in Africa?
“You need patience,” says Muscat. “And you need deep pockets and patience – as it will not be a quick win.”
Aquilina agrees. “You also need to employ the right people. We made sure we had people who understood the country we were going to. Understanding the country is key – and we employ people who know the country as well as the right kind of advisors who understand the laws and history of the country.”
International Insights is organised with the support of strategic partners HSBC Bank Malta p.l.c. and powered by Studio Seven. Times of Malta is media partner. The series will be available on popular podcast platforms, TradeMalta’s YouTube channel and timesofmalta.com.