Breaking: Maersk launches FMCG supply chain solutions for Africa

by Louise Burgers. Global logistics company Maersk has launched its supply chain solutions for Africa, beginning in Nigeria and West Africa. Maersk head of marketing and business development, Africa region, Anita De Werd, confirmed that the company was positioning itself as a logistics solutions provider for FMCG companies on the continent, in anticipation of opportunities that would be created by an increase in intra-Africa trade once the Africa Continental Free Trade Agreement (AfCFTA) was implemented fully.

Maersk shipping containers are as much a feature of most global ports as fish are in the sea. Since 1996, it has been the largest container ship and supply vessel operator in the world, but the Danish business conglomerate has activities in the transport, logistics and energy sectors and has specialised in supply chain solutions for its global customers, which include the world’s largest FMCG multinationals. These same multinationals are on board as clients in West Africa.

In a press statement issued by the company in Lagos, De Werd said that Maersk aims to support Nigerian FMCG companies in effectively managing their inventories and product delivery. She said that Maersk recognises the importance of bringing together expertise, platforms and clients to find practical, effective methods and solutions for addressing the complexities in the FMCG supply chain: “Managing the complexity in any supply chain demands having a good balance between the costs, demands and preferences for doing business around the world. We plan to deploy our international track record in supply chain management to the benefit of our customers. This means they will, through us, have instant access to the vast array of knowledge and experience that we have gained from working with different industries, regions and systems.

“We are not only able to understand the issues around logistics and supply chain management facing FMCG companies, but more importantly, we are able to bring solution to their pain points by developing the appropriate solutions for their specific needs. Maersk is the global integrator of container logistics. We handle about a fifth of global containerised trade. Our purpose as a company is to enable trade for the benefit of society and our customers.”

AfCFTA

“This fits right in with our Africa plans,” confirmed De Werd to Retailing Africa, adding that AfCFTA was indeed a catalyst to growth on the continent, especially as a rising middle class and population growth created increased demand for FMCG products, in turn. Nigeria, where De Werd is based, was the obvious choice with its enormous population growth and resultant increasing demand for FMCG products.

She explained how Maersk had already been a major player on the continent as a port operator, container liner, and a logistics provider; and now wanted to build out and strengthen its position in Africa.

“Our biggest customers that we service with our supply chain solutions in other parts of the world, who are now active in Nigeria, also approached us to distribute their products in the region, said De Werd. “AfCFTA also makes it easier for brands to design their supply chain around its likely impact.” She cited the toothpaste market in West Africa as an example, where it made more sense to send product from Southern Europe, than from Nigeria to Ghana and Ivory Coast, even if the toothpaste was manufactured in Nigeria, because of duties and a lack of infrastructure.

“AfCFTA will impact how goods are produced and delivered to other African countries. It offers great opportunities to manufacturers and will create jobs. We need jobs in Africa. AfCFTA has a minimal impact now, but we believe that it will have more impact. We are positioning Maersk early for opportunities.”

De Werd said they were counting on AfCFTA having an impact. “These agreements take time and need to be shaped. But there are so many parties who are willing to come to the table and say this is necessary for Africa’s future. Intra-Africa trade stands at 16%; whereas in Europe, is at 68%, so there is huge opportunity to move goods between African countries. As a continent, we need to make leaps forward. We should see some impact this decade.”

Solutions

She acknowledged it was a huge leap for the brand. This strategy has been four years in the making, since Maersk began in 2016 when it saw the opportunities to become a real partner in supply chain management in Africa. “Our customers were asking for it, as we have the experience and knowledge in house. As companies are changing and digital platforms become more and more the way of doing business, we need to understand how we best serve the customer. Companies are realising that collaboration is the way to move forward. We can help with your supply chain globally.”

Maersk provides supply chain management with end-to-end supply chain solutions. This literally means from picking up raw materials, using whichever mode of transport is needed; storing it in a warehouse and transporting it to the manufacturer; to warehousing the completed product; to distribution to different countries by truck, boat, rail; and finally, to the supermarket for the end-user, the consumer. Current clients in Nigeria include the world’s biggest brands in personal hygiene, personal care, beverages and confectionery.

“It is about how we can best help the continent, West Africa; how we can make sure consumers have products, products that fit the market and have been produced on the continent. What is important in all this, is that there is visibility – everything is captured in our system at all given times, so you know what is where at all times. Where your product or raw materials are in transit. In the supply chain you have three flows: goods flow – the physical flow; the money flow to pay for taxes and duties; and the data flow. We are constantly developing and upgrading our systems for our customers,” De Werd said.

Louise Burgers (previously Marsland) is the Publisher and Editor and Co-Founder of RetailingAfrica.com. She has spent over 20 years writing about the FMCG retailing, marketing, media and advertising industry in South Africa and on the African continent. She has specialised in local and Africa consumer trends and is a passionate Afro-optimist who believes it is Africa’s time to rise again and that the Africa Continental Free Trade Agreement (AfCFTA) will be a global gamechanger in the next decade.

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