IE Singapore leads food business mission to Africa

Agency also attracts food services providers to explore opportunities in rapidly urbanising Indonesia.

International Enterprise (IE) Singapore is encouraging Singapore food companies to explore expansion opportunities in potential food markets overseas. These markets include South Africa, Nigeria and Indonesia. Supported by a huge domestic population and owing to diverse factors like a steady rise in affluence in the countries, a budding tourism sector, influx of expatriates and urbanisation, these markets are seeing a rising demand for food products and services.

Representatives from the agency promoting overseas growth of Singapore-based enterprises are currently in South Africa and Nigeria, leading a delegation of eight Singapore food companies to explore opportunities there. This mission is the first-ever food business mission to the two African countries. The companies; namely Ace Synergy International Pte Ltd, Gan Hup Lee (1999) Pte Ltd, Ha Li Fa Pte Ltd, Owl International Pte Ltd, Seng Hua Hng Foodstuff Pte Ltd, Sin Mui Heng Food Industries Pte Ltd, Tai Hua Food Industries Pte Ltd and The TiffinBox Company, will be visiting Lagos in Nigeria, and Cape Town and Johannesburg in South Africa from 25 July to 4 August 2010. To better prepare the delegates for the trip, IE Singapore also co-organised a half-day seminar with SPRING on 13 July 2010 to share about the import regulations and standards of South Africa, as mentioned in a IE Singapore report.

Earlier this month, a similar trip was organised by IE Singapore for six food services providers including established Singapore fine dining player Les Amis, niche garden concept operator Villa Bali and other Food & Beverage (F&B) operators like Select Group, Carona Holdings, Donut Empire and Polar Puffs to Jakarta from 5 to 7 July 2010. They met up with local retail and F&B operators who were potential franchisees to the Singapore brands. The mission also included site visits to the various retail locations.

Opportunities for food manufacturers in South Africa and Nigeria
Touted as one of the next frontier markets for investments, South Africa presents many opportunities. With a huge 48 million population and an affluent upper-middle class, the country offers a sizeable domestic market for consumer goods. The recent 2010 World Cup has also given the rapidly growing country an extra boost, especially to its tourism and hotel industries. With these in mind and the country’s excellent performance in the food sector, business players in the food manufacturing industry have indicated keen interest in the market. Over a period of 10 years from year 2000, South Africa’s F&B market value has grown by 6.12%, outpacing the world’s average of 3.97%, to a value of US$24 billion in 2009.

The same growth is seen in Nigeria. Its sheer population of 149 million represents a healthy appetite for consumer goods and services that is expected to grow through its fast emerging middle class and the nation’s Vision 2020 plan. Consumer spending for food and non-alcoholic beverages in the country reached over S$48 billion in 2007 and is forecasted to grow at a CAGR of approximately 3.85% from 2010 to 20153. Nigeria’s food sector is currently growing at 6.9% with its value reaching US$11 billion in 2009.

The great potential of the food sectors in both South Africa and Nigeria is further reflected by food exports from Singapore. Food exports to both countries experienced double-digit growth since 2007, standing out significantly among other markets in the food sector. F&B exports to South Africa grew by 23.1% from 2007 to hit close to S$55 million by the end of 2009, while Nigeria grew by 69.6% (S$8.5 million) over the same period.

Encouraged by the strong figures, Mr Pek Yipp Song, Executive Director of Tai Hua which manufactures sauces, said, “South Africa and Nigeria are new growth areas in the world that are still largely untapped. Increasing number of tourists and expatriates are going into the countries. This, coupled with the growing middle class locally will contribute to a rising demand for better quality of life, hence higher quality of food products. We believe the market is ready to appreciate our unique offering of naturally brewed quality soy sauce. The time is right now for us to enter, to establish our brand in the markets.”

Urbanisation in Indonesia creates opportunity
An increasing rate of urbanisation in Indonesia has contributed to a change in consumer food choices. The number of urban households overtook the number of rural households in 2006, and is expected to reach more than 36 million by 2012. The growth of the middle income segment is giving rise to a general attitude that considers dining out a leisure activity as opposed to a quick way to settle dinner, resulting in a preference to dine in an environment that is conducive for outings and gatherings. This presents many opportunities for full-service restaurants and food service providers with unique dining concepts in the market. The effect is especially obvious in the capital Jakarta, but is also gaining strength in the 2nd tier cities like Surabaya and Medan.

Commenting on the vast opportunities presented by these markets, Mr Tan Soon Kim, Group Director of Lifestyle Business Services Group, IE Singapore said, “Singapore food players are equipped with different strengths and value propositions to capture opportunities in these potential markets. Our food manufacturers adhere to strict standards for food safety and quality that meet international benchmarks. A discerning and well-travelled group of consumers at home have provided the necessary training ground to challenge our food service providers to develop strong innovation capabilities to adapt to changing lifestyles. They have taken this capability overseas, easily fitting dining concepts to local consumers’ requirements. We are confident that with the right match in business partners, the Singapore brand of food products and services can establish an enduring presence in South Africa, Nigeria and Indonesia.”