Boxes of tomato paste bound for Africa at the Chilly Willy manufacturing facility in Dubai. All photos Sarah Dea / The National
Boxes of tomato paste bound for Africa at the Chilly Willy manufacturing facility in Dubai. All photos Sarah Dea / The National

In to Africa: Dubai bids to become continent’s staging post



At the Chilly Willy factory in Dubai, the lorries roll in with giant drums of raw tomato paste from China and roll out with tiny sachets of the processed product bound for Africa.

“It’s a 24-hour operation,” says director Iain Cusick as workers pack boxes destined for shops and restaurants from Mozambique to Somalia. Business is booming.

The rise of the African consumer is encouraging companies across the UAE to look west, from the factories and warehouses of Jebel Ali Port and Dragon Mart to the banks and fund managers of Dubai’s financial heartland.

The race is on to become Africa’s staging post.

“The fact is that over the next 10 to 15 years, the growth prospects on the African continent are the best in the world,” says Rudolph Lohmeyer, a director of the Global Business Policy Council at AT Kearney, the management consultancy.

Take a look inside the Chilly Willy factory in Dubai

Yet it also remains the least integrated region in terms of cross-border trade, which is where Dubai and other potential entrepôts to the continent’s $3 trillion economy see an opening.

The tomato paste business of the catchily named Chilly Willy is a case study of the logistical challenges Africa faces. With 60 per cent of the world’s uncultivated arable land, the continent has plenty of space to grow and process tomatoes of its own. But moving them across poor roads and closed borders is where African trade starts to wither on the vine.

It is more cost-effective for fast-moving consumer goods businesses to operate from cities such as Dubai than in Africa itself. For Chilly Willy it represents a Dh100 million business opportunity.

Almost a quarter of the available food in Sub-Saharan Africa is lost or wasted, according to the World Resources Institute. Undeveloped supply chains play a big part in that loss.

Last week leaders from across the continent trumpeted the signing of a “Cape to Cairo” common market aimed at opening up Africa’s borders. The 25-nation Tripartite Free Trade Area deal is the culmination of five years of talks aimed at lifting barriers and reducing bureaucracy – and a stepping stone to a continent-wide free trade area. Negotiations to achieve a deal by 2017 were formally launched on Monday at the African Union Summit in Johannesburg.

In the meantime, the enlarged grouping combines the existing Common Market for Eastern and Southern Africa (Comesa), Southern African Development Community (SADC) and East African Community (EAC) trade blocs.

But some analysts are sceptical about its effect on the free movement of goods, other than simplifying the existing “alphabet soup” of African trade agreements.

“The existing framework of overlapping regional blocs is confusing and impossible to enforce,” says John Ashbourne, a London-based economist at Capital Economics.

“Zambia, for example, has pledged both to reduce tariffs on goods from its fellow SADC states as well as to implement a Comesa common external tariff against them. Tanzania is, in theory, a member of two separate, and non-contiguous, customs unions, which is logically impossible.”

Notwithstanding such barriers, Africa’s GDP has trebled since 2000, with trade growing fourfold, according to EY.

More interesting than the rate of growth has been what is driving it – with the services sector accounting for more than half of economic growth since the millennium.

The African Development Bank estimates the continent’s middle class population grew by more than 60 per cent to 313 million since then - even if most of those middle income consumers are still concentrated in pockets of the wealth within the continent.

Burgeoning trade between the UAE and Africa and rising income levels have been reflected by the rapid expansion of airlines such as Emirates, flydubai and Etihad over the last year. Africa has become a strategic focus for Emirates, which plans to increase its operations on the continent by 40 per cent within a decade. By 2020 it plans to have an additional 8.5 million seats in its African capacity. In February it said it would double capacity on its daily Nairobi service and this week announced additional capacity to Uganda.

Kenya is among the African countries attracting the most interest from UAE companies seeking to tap the continent’s growth story.

The East African country predicts its economy will expand by 7 per cent in the coming year, placing it among the fastest growing of the major African economies.

Like Dubai, Nairobi also aspires to become a gateway to Africa.

“This is one of the ambitions we have as a country,” says Moses Ikiara, the managing director of KenInvest, the country’s investment authority. “We want to be the top hub. Within the continent, Kenya has the largest share of middle class. It is growing very fast and affecting purchasing power.”

That trend has not gone unnoticed by two of Dubai’s biggest retail conglomerates – Majid Al Futtaim Group, which is which is opening Carrefour stores in Nairobi, and Al Futtaim Group, which last year acquired a big car dealership in the country.

The economy of Sub-Saharan Africa is expected to grow by about 4.5 per cent this year, outpacing predicted global growth of 3.5 per cent, according to the IMF. But it is not just Africa’s expanding economies that are attracting overseas interest – it is its burgeoning workforce.

By 2035 the number of Africans joining the working population (aged 15 to 64) will exceed that of the rest of the world combined.

Last week’s Tripartite Free Trade deal was signed in the Egyptian resort of Sharm El Sheikh, where the chief executives of multinational companies from Unilever to GE also gathered in March to discuss investment in Egypt. For many of them, the real prize lay beyond the North African country’s borders to the wider continent.

Among the global business leaders in attendance was Sir Martin Sorrell, the chief executive of WPP, the world’s biggest advertising company.

The rise of the African consumer brings with it huge potential for his industry as more multinationals seek to promote their brands as they expand across the continent.

“There is a very great opportunity here,” he says.

While about two thirds of the company’s $750m business on the continent comes from South Africa, he says WPP is also growing its footprint in east and west Africa.

“Accessing the African market, due to the lack of infrastructure requires staging and basing points. There are a whole number of factors that place Egypt particularly well to take advantage of that pattern. I would argue that the UAE is also exceptionally well positioned,” says AT Kearney’s Mr Lohmeyer.

The latest efforts by the African states to boost trade flows through the creation of a larger bloc is partly a recognition of the business currently being ceded to cities such as Dubai.

The Chilly Willy tomato paste factory is a small example of how the emirate is already benefiting as a staging post for the continent for goods originating from China.

A much bigger example can be found at the other end of the city where the sprawling Dragon City development is taking shape. It is already home to the city’s Dragon Mart, the biggest Chinese trading hub outside mainland China. About 3,500 outlets are based there, many of them re-exporting goods arriving from China via Jebel Ali Port to countries across Africa. Now the developer behind the project is adding another 1.3 million square feet of space to cope with demand.

As Africa looks to customs agreements to spur trade, Dubai is banking on its ports, airports and warehouses to cement its role as the entrepôt of Africa.

“The Cape to Cairo is a romantic idea,” says Mr Ashbourne of Capital Economics. “But as long as it’s cheaper to make tomato paste in Dubai and send it to Africa, companies will continue to do that, no matter what trade agreement is in place.”

scronin@thenational.ae

The specs
Engine: 3.6 V6

Transmission: 8-speed auto

Power: 295bhp

Torque: 353Nm

Price: Dh155,000

On sale: now 

Company%20Profile
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Favourite book: ‘The Art of Learning’ by Josh Waitzkin

Favourite film: Marvel movies

Favourite parkour spot in Dubai: Residence towers in Jumeirah Beach Residence

COMPANY PROFILE
Name: Airev
Started: September 2023
Founder: Muhammad Khalid
Based: Abu Dhabi
Sector: Generative AI
Initial investment: Undisclosed
Investment stage: Series A
Investors: Core42
Current number of staff: 47
 
COMPANY PROFILE
Name: ARDH Collective
Based: Dubai
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Sector: Sustainability
Total funding: Self funded
Number of employees: 4
Results

STAGE

1 . Filippo Ganna (Ineos) - 0:13:56

2. Stefan Bissegger (Education-Nippo) - 0:00:14

3. Mikkel Bjerg (UAE Team Emirates) - 0:00:21

4. Tadej Pogacar (UAE Team Emirates) - 0:00:24

5. Luis Leon Sanchez (Astana) - 0:00:30

GENERAL CLASSIFICATION

1. Tadej Pogacar (UAE Team Emirates) - 4:00:05

2. Joao Almeida (QuickStep) - 0:00:05

3. Mattia Cattaneo (QuickStep) - 0:00:18

4. Chris Harper (Jumbo-Visma) - 0:00:33

5. Adam Yates (Ineos) - 0:00:39

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Royal Birkdale Golf Course

Location: Southport, Merseyside, England

Established: 1889

Type: Private

Total holes: 18

COMPANY%20PROFILE
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Name: Peter Dicce

Title: Assistant dean of students and director of athletics

Favourite sport: soccer

Favourite team: Bayern Munich

Favourite player: Franz Beckenbauer

Favourite activity in Abu Dhabi: scuba diving in the Northern Emirates 

 

How to protect yourself when air quality drops

Install an air filter in your home.

Close your windows and turn on the AC.

Shower or bath after being outside.

Wear a face mask.

Stay indoors when conditions are particularly poor.

If driving, turn your engine off when stationary.

Company%20profile
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ADCC AFC Women’s Champions League Group A fixtures

October 3: v Wuhan Jiangda Women’s FC
October 6: v Hyundai Steel Red Angels Women’s FC
October 9: v Sabah FA

Pros%20and%20cons%20of%20BNPL
%3Cp%3E%3Cstrong%3EPros%3C%2Fstrong%3E%0D%3C%2Fp%3E%0A%3Cul%3E%0A%3Cli%3EEasy%20to%20use%20and%20require%20less%20rigorous%20credit%20checks%20than%20traditional%20credit%20options%0D%3C%2Fli%3E%0A%3Cli%3EOffers%20the%20ability%20to%20spread%20the%20cost%20of%20purchases%20over%20time%2C%20often%20interest-free%0D%3C%2Fli%3E%0A%3Cli%3EConvenient%20and%20can%20be%20integrated%20directly%20into%20the%20checkout%20process%2C%20useful%20for%20online%20shopping%0D%3C%2Fli%3E%0A%3Cli%3EHelps%20facilitate%20cash%20flow%20planning%20when%20used%20wisely%0D%3C%2Fli%3E%0A%3C%2Ful%3E%0A%3Cp%3E%3Cstrong%3ECons%3C%2Fstrong%3E%3C%2Fp%3E%0A%3Cul%3E%0A%3Cli%3EThe%20ease%20of%20making%20purchases%20can%20lead%20to%20overspending%20and%20accumulation%20of%20debt%0D%3C%2Fli%3E%0A%3Cli%3EMissing%20payments%20can%20result%20in%20hefty%20fees%20and%2C%20in%20some%20cases%2C%20high%20interest%20rates%20after%20an%20initial%20interest-free%20period%0D%3C%2Fli%3E%0A%3Cli%3EFailure%20to%20make%20payments%20can%20impact%20credit%20score%20negatively%0D%3C%2Fli%3E%0A%3Cli%3ERefunds%20can%20be%20complicated%20and%20delayed%0D%3C%2Fli%3E%0A%3C%2Ful%3E%0A%3Cp%3E%3Cem%3ECourtesy%3A%20Carol%20Glynn%3C%2Fem%3E%3C%2Fp%3E%0A
SPECS%3A%20Polestar%203
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How it works

A $10 hand-powered LED light and battery bank

Device is operated by hand cranking it at any time during the day or night 

The charge is stored inside a battery

The ratio is that for every minute you crank, it provides 10 minutes light on the brightest mode

A full hand wound charge is of 16.5minutes 

This gives 1.1 hours of light on high mode or 2.5 hours of light on low mode

When more light is needed, it can be recharged by winding again

The larger version costs between $18-20 and generates more than 15 hours of light with a 45-minute charge

No limit on how many times you can charge

 

The%20Roundup
%3Cp%3EDirector%3A%20Lee%20Sang-yong%3Cbr%3EStars%3A%20Ma%20Dong-seok%2C%20Sukku%20Son%2C%20Choi%20Gwi-hwa%3Cbr%3ERating%3A%204%2F5%3C%2Fp%3E%0A
COMPANY PROFILE
Name: HyperSpace
 
Started: 2020
 
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
 
Based: Dubai, UAE
 
Sector: Entertainment 
 
Number of staff: 210 
 
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
 
 
 
 
 
 
 
If you go

The flights
Emirates and Etihad fly direct to Nairobi, with fares starting from Dh1,695. The resort can be reached from Nairobi via a 35-minute flight from Wilson Airport or Jomo Kenyatta International Airport, or by road, which takes at least three hours.

The rooms
Rooms at Fairmont Mount Kenya range from Dh1,870 per night for a deluxe room to Dh11,000 per night for the William Holden Cottage.

ACL Elite (West) - fixtures

Monday, Sept 30

Al Sadd v Esteghlal (8pm)
Persepolis v Pakhtakor (8pm)
Al Wasl v Al Ahli (8pm)
Al Nassr v Al Rayyan (10pm)

Tuesday, Oct 1
Al Hilal v Al Shorta (10pm)
Al Gharafa v Al Ain (10pm)

The specs
Engine: Long-range single or dual motor with 200kW or 400kW battery
Power: 268bhp / 536bhp
Torque: 343Nm / 686Nm
Transmission: Single-speed automatic
Max touring range: 620km / 590km
Price: From Dh250,000 (estimated)
On sale: Later this year
COMPANY%20PROFILE%20
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