With Nigeria’s Juice Firm, Coca-Cola Pushes Up Expansion Plan in Africa

The Coca-Cola Company is making good her plan to expand across Africa by 2020 and redouble their effort to grow beyond soda. To this end, the company has fully acquired Nigeria’s leading dairy and juice company, Chi Limited.

Chi Limited was incorporated in 1980, as a Fast-Moving Consumer Goods (FMCG) company that provides consumer products in the dairy, beverages and snacks sectors. The company’s headquarter is in Lagos, Nigeria’s commercial capital.

The company was a part of the TGI conglomerate which has diverse business interests in a wide range of sectors, from food to healthcare and engineering products. Its major manufacturing facility is in Lagos.

The flagship products of the firm are Capri-sonne and Chivita, it holds the Nigerian license to market Caprisun.

FMCG or Consumer Packaged Goods (CPG) are however, products that are sold quickly and at a relatively low cost. Examples include non-durable goods such as packaged foodsbeveragestoiletriesover-the-counter drugs, and other consumables.

Those who know better like the Wikipedia say many fast-moving consumer goods have a short shelf life, either as a result of high consumer demand or as the result of fast deterioration. Some FMCGs, such as meats, fruits, vegetables, dairy products, and baked goods are highly perishable. Other goods, such as pre-packaged foods, soft drinks, candies, and toiletries have high turnover rates. Sales are sometimes influenced by holiday and/or seasonal periods and also by the discounts offered.

Packaging is critical for FMCGs. To become successful in the highly dynamic and innovative FMCG segment, a company not only has to be acquainted with the consumer, brands, and logistics, but also, it has to have a sound understanding of packaging and product promotion.

The packaging has to be both hygienic and customers-attracting. Logistics and distribution systems often require secondary and tertiary packaging to maximize efficiency. Unit or primary packaging protects products and extends shelf life while providing product information to consumers.

The profit margin on FMCG products can be relatively small, but they are generally sold in large quantities; thus, the cumulative profit on such products can be substantial. According to BASES, 84% of professionals working for fast-moving consumer goods are under more pressure to quickly bring new products to the market than they were five or ten years ago. With this in mind, 47% of those surveyed confessed that product testing suffers most when deadlines are accelerated.

The growth of the internet over the past quarter century and the rise of the brand community phenomenon have contributed greatly to the demand for FMCGs. For example, according to German research group AGOF’s internet facts, 73% of Germany’s population is online. Additionally, 83.7% of internet users claim to use the web to search for information and 68.3% to shop online.But although most of the FMCGs are not ordered through online, rather, they are bought conveniently in a nearby department store.

In the mean time, Chi Limited made the announcement through a press statement on Wednesday. In the statement, Coca-Cola revealed that she has completed the acquisition of the company exactly three years after acquiring its 40 percent minority shares.

‘’Coca-Cola first announced a minority investment in Chi three years ago and, as planned, has now acquired full ownership of the company.’’

Juices and value-added dairy categories rank among the fastest-growing beverage segments in Nigeria and Africa. Thus, this latest move proves that there are yet opportunities and untapped potential across the continent. It also reaffirms the company’s commitment to a long-term investment and growth plan in Africa, where it has been present for more than 90 years.

The company added in the statement that as it continues to evolve as a total beverage company, it recognises Chi’s diverse range of beverages to perfectly complement its existing portfolio, enabling it to accelerate expansion into new categories and grow its business in Africa.

In 2016, Coca-Cola acquired a 40 percent stake from Tropical General Investments Group, the holding company for Chi Ltd.  This came after it was reported in 2014 that TGI group was exploring options to sell its stake in Chi Limited for as much as $1 billion. It was also suggested that multinational drink makers such as Coca-Cola, Pepsi would find this deal attractive.

Chi is recognised in West Africa as an innovative, fast-growing leader in expanding beverage categories, including juices, value-added dairy and iced tea.


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