Lessons to keep in mind

Tony Sun, Executive Director of the Sunshine Group, shares Tai’s concern over talent training. “No business will be successful without basic vocational training and education in the preparatory stage,” he warned.

Sun, who majored in international trade, gained a foothold in Tanzania after years in South America, as Tanzania began enjoying a more stable and favorable environment for the development of the real economy. Starting with mining, the Sunshine Group today has a myriad of businesses spanning energy, agriculture, finance, building, processing and manufacturing, as well as tourism and catering. The total investment is over $100 million. The group has about 1,700 local employees.

Ramadhan Amir, 31, switched from print media marketing to a sales executive of Sunshine Industrial two years ago. With an MBA degree, he finds positive energy and more efficiency in the daily routine. “The best part of working here is that I can develop my career and know about China at the same time,” Amir said. Qualified local employees like Amir are the foundation of the company’s future, which envisions another 15 to 20 years of business plans.

Eliminating cultural conflict is Sun’s top priority. “I have seen so many failed cases among our peers who could not cope with cultural differences appropriately. Previous management and operation experience in China may not be applicable here without adjustments. What we have been doing is enhancing mutual respect and understanding,” Sun said.

Another possible cause for many Chinese investors’ failure in Africa is over-optimism about the African market, according to Sun. Investment in real economy has a better future than in trade, but the former requires deeper market analysis and orientation. Any potential foreign investor coming to Africa should also bear in mind that there may not be a well-organized industrial chain.

Leo Li, CEO of Sunshine Industrial, remembers the difficulties while launching their sunflower oil production line. The 10-acre (40,468-square-meter) oil processing plant in Dodoma, capital of Tanzania, started operation in June 2015. “We collected high-quality seeds directly from locals, but there was an unexpected difficulty,” Li said. “During harvest, the farmers didn’t have enough storage space. The only option for us was to build a storehouse immediately.”

After one and a half years of operation, Li is happy to see the product, Sunbelt oil, capturing 65 percent of the sunflower oil market share. He is also proud of the plant serving as an example of the cyclical economy. After the oil is extracted, the residual parts are used as cattle feed. The plant also rears cattle, and beef is supplied to restaurants.

“We have learned from past experiences. We had to pay a price but the knowledge is precious,” Li said. “For investors, especially small and medium-sized enterprises, there is no guarantee of success while doing business in Africa. Getting yourself prepared for that physically and mentally helps.” (Reporting from Dar es Salaam, Tanzania) Comments to chenran@bjreview.com