In­dus­try: Build­ing a brand in Africa

China Daily (Canada) - - FRONT PAGE -

“We were sell­ing ethylenevinyl ac­etate copoly­mer (EVA) flip-flops in Uganda in 2000 and we sold nearly 1.2 mil­lion pairs in a year. We then ex­panded into neigh­bor­ing coun­tries.”

That suc­cess did not come with­out con­sid­er­able pain, much of it in China as he scoured the coun­try look­ing for flip-flops that would not only have aes­thetic ap­peal to African buy­ers but would be cheap as well. That work kept him away from his fam­ily for long pe­ri­ods.

“Tax of more than $10,000 was slapped on each con­tainer of footwear, and given that th­ese things don’t sell for much any­way, that squeezed a lot out of our po­ten­tial prof­its.

“At the same time, more African traders were go­ing to China to shop, so our com­pet­i­tive ad­van­tages quickly be­gan to erode,” Wu said.

An­other prob­lem was that de­mand in the coun­try slumped, and be­cause trade from Africa alone could not fill the gap, many fac­to­ries closed.

“If we wanted to grow this busi­ness, build­ing a fac­tory in Africa seemed to be the only so­lu­tion, and it was cer­tainly ideal for us. Af­ter think­ing care­fully about the pos­si­bil­i­ties, we de­cided to build the fac­tory in Tan­za­nia, given that Rwanda is land­locked and the Ugan­dan mar­ket was limited.”

The fac­tory, in Dar es Salaam, cov­ers more than 3,000 square me­ters and pro­duces on av­er­age 100,000 pairs of flip-flops a day in eight pro­duc­tion lines im­ported from China.

Due to cul­ture and lan­guage is­sues, trans­fer­ring skills to Africans is of­ten re­garded as a daunt­ing task but, Wu says, it does not have to be that dif­fi­cult if you choose the right field at the right time. On the other hand, he says, be­cause Africa is still at only a pre­lim­i­nary stage of in­dus­tri­al­iza­tion, any­one try­ing to bring in a top-of-the-mar­ket in­dus­try that has very spe­cial man­u­fac­tur­ing de­mands is likely to be dis­ap­pointed.

Teach­ing the skills needed in a ba­sic, sim­ple in­dus­try is likely to be a lot eas­ier.

“We em­ployed more than 600 lo­cal work­ers and only have five Chi­nese tech­ni­cians for some tough me­chan­i­cal prob­lems. It took time for us to train them ini­tially but they can han­dle ev­ery­thing now, in­clud­ing work­ing with the pro­duc­tion line, cut­ting, and pack­ing.”

Pro­duc­tion does not in­volve a lot of com­pli­cated tech­nol­ogy or highly de­vel­oped skills, Wu says.

It is pos­si­ble he will build shoe fac­to­ries in the fu­ture, and work­ers who can now make flip-flops will eas­ily be able to learn the ad­di­tional skills needed in mak­ing shoes, he says.

Flip-flops are made of EVA ma­te­ri­als im­ported from China, but now Wu plans to move the pro­duc­tion line of the ma­te­rial to Tan­za­nia to re­duce over­head.

“An­other thing that prompted us to open a fac­tory here was the sig­nif­i­cance of brand in the mar­ket. African cus­tomers are very keen on well-es­tab­lished brands, but pre­vi­ously our prod­ucts in this mar­ket were very ran­dom, with var­i­ous brands from China, so we need our own brand and rep­u­ta­tion.”

One valu­able les­son Wu learned in Uganda came di­rectly from the cus­tomers. Wu says they com­plained ev­ery time they were given prod­ucts that they were un­fa­mil­iar with, and it was de­cided that if the busi­ness was to be sus­tain­able, it needed to sell a well-known brand.

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Lo­cal em­ploy­ees

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