Consumer spending

1
(No Transcript)
2
Consumer spending
10.6
10.6
trillion (at 2006 PPP exchange rates)
8.1
11.1
16.5
2000
2010
16.5
11.1
8.3
2000
2010
9.2
9.2
2000
2010
3.6
3.7
2.3
3.7
2.6
2.6
2000
2010
2000
2010
Source World Bank, OEF
3
Unilever Asia Africa
Americas
Asia Africa
34
29
Europe
37
Based on 2007 YTD turnover
4
Unilevers Supply Chain in Africa

• Eliminating Trade Barriers to improve Supply
  Chain Competitiveness

5
Unilever Factories in AMET
6
Impact of scale
Scale plant - the point at which the curve
flattens out
7
Landed Cost Comparison
Lux Toilet Soap for South Africa
/T
8
Landed Cost Comparison
Toothpaste for Cote dIvoire
/T
9
Trading blocks
GCC (Gulf Co-operation Council) UAE Oman Bahrain K
uwait Saudi Arabia Qatar
AFTA (Arab Free Trade Agreement) Jordon Oman UAE K
uwait Bahrain Lebanon Tunisia Libya Saudi
Arabia Egypt Syria Morocco Iraq
UAE
EGYPT
WESTERNSAHARA
SUDAN
MAURITANIA
YEMEN
MALI
NIGER
ERITREA
EAC (East African Community) Kenya Uganda Tanzania
CAPE VERDE
CHAD
SENEGAL
GAMBIA
DJIBOUTI
BURKINAFASO
GUINEA BISSAU
GUINEA
BENIN
NIGERIA
ETHIOPIA
CENTRAL AFRICAN REPUBLIC
COTEDIVOIRE
SACU (Southern African Customs Union) Botswana Sou
th Africa Lesotho Swaziland Namibia
SIERRA-LEONE
SOMALIA
LIBERIA
CAMEROON
TOGO
GHANA
UGANDA
EQUATORIAL GUINEA
KENYA
CONGO
GABON
DEM. REPUBLIC OF CONGO
BURUNDI
SADC (Southern African Development
Community) Angola Namibia Botswana South
Africa Lesotho Swaziland
RWANDA
AMU (Arab Maghreb Union) Algeria Morocco Libya Tun
isia Mauritania
SEYCHELLES
TANZANIA
COMOROS
ANGOLA
MALAWI
ZAMBIA
COMESA (Common Market for Eastern Southern
Africa) Angola Malawi Burindi Mauritius Comoros Na
mibia Dem. Rep. of Congo Rwanda Djibouti
Seychelles Egypt Sudan Eritrea
Swaziland Ethiopia Uganda Kenya Zambia Madagascar
Zimbabwe
ECOWAS (Economic Community of West African
States) Benin Liberia Berkino Faso Mali Cape
Verde Niger Cote dIvoire Nigeria Gambia Senegal G
hana Sierra Leone Guinea Togo Guinea-Bissau
NAMIBIA
ZIMBABWE
MADAGASCAR
MOZAMBIQUE
BOTSWANA
MAURITIUS
SWAZILAND
SOUTH AFRICA
LESOTHO
10
Ongoing Trade Barriers

• Trade agreements not fully in place or applied
• Import duties not in line with trade agreements
• Slow or inconsistent implementation of new
  protocols
• Other indirect taxes imposed on imported
  products
• Disruption to X-border flow of goods
• Poor infrastructure

11
Some examples duties

• ECOWAS
• Import bans of certain products into Nigeria
• Imposition of import duty on margarine supplied
  from Cote dIvoire to Nigeria
• Import duties on products to be supplied from
  Nigeria into Cote dIvoire
• Inconsistent application of duty agreements,
  often requiring discussions with several groups
  to resolve
• E.g. Issues on supply of margarine from Ghana to
  Nigeria
• Erratic charges and frequent reviews of levies
• COMESA/SADC
• Slow implementation of agree protocols Unilever
  had to lobby for the agreed zero duty on soaps
  into Zambia to be applied
• Still paying import duty on soaps into Malawi

12
Some examples X-border disruption

• Uganda is a good example of improvements
• Green customs channel has enabled us to halve
  the transit time from Nairobi to Kampala
• Good co-ordination between the various govt
  bodies involved in X-border movement
• Computerisation of customs
• But transit time from Nairobi to Dar Es Salaam is
  3x longer than Nairobi to Kampala

13
Import Flowchart Kenya to Tanzania
14
Import from Kenya to Tanzania
11 Days
Figure 5 Overall ESA draft implementation plan.
15
Compared to Kenya to Uganda
1.5 Days
Figure 5 Overall ESA draft implementation plan.
16
Some examples infrastructure

• Overloaded or inefficient ports
• It can take 6 weeks to clear containers in
  Mombassa
• We have had to stop production in our Kenya
  factory several times due to unavailability of
  raw materials
• We ran out of Close-up toothpaste in the market
  due to clearance delays (imported from Egypt)
• Currently taking 4 weeks to clear goods in
  Abidjan due to new shipment checks
• Improvements have been made in Lagos
• Poor or non-existent rail systems
• Rail in Tanzania is cheaper than road, but a
  trial to use rail for Unilever products failed
• Product took several weeks to reach the
  destination
• High levels of product theft

17
What business needs to do

• Get involved - advocacy/dialogue (BAFICAA, INSEAD
  report 138 sites in AA, employing 88,000. In SA
  3000 suppliers, paying 1 of total tax)
• Create output-based process (Investment Climate
  Facility)
• Bring process management skills