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News

Africa: mixed prospects for Chinese operators?

16/01/2018 - François-Xavier Branthôme - Lire en français
Chinese manufacturers see potential in Ghana’s market
As the economy of Ghana expands, many opportunities are opened for international trade transactions, Chinese manufacturers affirmed at the 4th Agro-Food West Africa Trade Fair held in Accra in early December. Many companies, among which manufacturers of agro-processing machines who attended the event, explained they sought to support Ghanaians who are into agro-processing. “Here in Ghana, the drink business has a potential market and we believe in the near future we will have a lot of opportunities. […] Ghana is a new market for us and we want to build customers here. West Africa is a new market for us”. 
 
Over the past marketing year, Chinese paste exports to Africa have dropped by 8% compared
to the average of the three previous marketing years, mainly due to sharp decrease in sales
(-44,000 tonnes) on the markets of West Africa (Ghana, Nigeria and Togo).

Five Chinese firms were among the 93 different businesses from 21 countries participating in the four-day exhibition, including Xiamen-based tomato paste producer DB Tomato Industry whose Sales Manager Cheng Jinghui expressed great excitement about the Ghanaian market. DB Tomato Industry has one factory in Xiamen for canned fish and another factory in Tianjin for tomato paste. “We run a factory for tomato paste and canned fish. We do export so many brands to many places including Ghana, Nigeria, Benin and Togo. We have been exporting to Ghana for more than 10 years,” Cheng said. A Ghanaian agent of DB Tomato Industry explained he is confident the volume of imports of Chinese tomato paste will increase, because of “the very cheap and competitive price that everybody can afford”.
 
Chinese plant closure ordered in Kuntunse
In early January, Ghanaian government has ordered the closure of the Happy Sunshine Company, producer of La Vonce tomato paste, a Chinese factory operating unlawfully in the Ga West Municipality of the Greater Accra Region. The tomato factory, which belongs to some Chinese expatriates, was fined GHS 15 000 (EUR 2 700 or USD 3 300) by the Environmental Protection Agency (EPA) in August 2017, for operating illegally whilst the company was also ordered to halt any form of production.
However, the management of the tomato factory violated the order and resumed full production in November.
 
Many projects are being set up in neighbouring countries...
Already heavily hit by the protectionist measures instituted by Nigeria and now by Algeria, Chinese paste exports to the countries of West Africa could face the competition in coming years of local production volumes whose development has attracted the interest of a number of foreign investors. 
Governor Bello signing the MoU

Niger State Government in September signed a EUR 49 million (NGN 18 billion) Memorandum of Understanding with a Hungarian investor for the setting up of an Integrated farming project and a tomato paste processing factory in the state. The multi billion Naira project will be sited at Kuta, and will cover over 4 000 hectares of land for the cultivation of alfalfa, maize and tomatoes and a Tomato Paste processing factory.
Governor Sani Bello said that Niger government entered into the MoU in pursuant of the administration’s commitment to leverage on the vast land resources of the state and to promote agriculture as an alternative to the country’s mono-economy. According to the Hungarian investor, the ground breaking of the integrated farm and the tomato paste processing plant was expected in December 2017.

... and further south, in Zambia and South Africa 
Late November, Humanity Africa – an NGO registered in Zambia and a Community Interest Company (CIC) in the United Kingdom announced they will invest in a tomato and fruit processing plant in Zambia’s Mkushi area, with an investment of GBP 500 000 (EUR 565 000 or USD 675 000) in the project.
During a presentation, Humanity Africa CEO Bhupinder Singh Baidwan explained that works on the projects are expected to commence in 2018. The plant will “be producing tinned tomatoes and fruits right in the heart of Mkushi while providing training to local farmers. We are also training farmers in Mkushi on how to dry and preserve [...] mangoes and pineapples, [which] have the potential to pave way for export within Africa, the European Union and the United Kingdom. There is also a potential market in the Democratic Republic of Congo and Angola,” he said.

In South Africa, the Department of Trade and Industry's (DTI) ZAR 48 million (USD 3.8 million) grant through its Black Industrialists Scheme (BIS) to the Eastern Trading (Dürsots All Joy) food manufacturing company has eased the purchase of machinery and helped triple the processing capacity, contributing to the creation of numerous permanent and contract jobs in Modjadjiskloof.
Trade and Industry Minister Rob Davies launched the ZAR 100 million tomato processing plant in May last year. Deputy Minister Magwanishe said that the expansion project undertaken by Dursot All Joy will increase their production efficiency and global competitiveness. He added that Eastern Trading found a niche in the agro-processing sector to the investment value of ZAR 120 million.
The targeted production of tomato related foods ensures premium quality food for local and impending global markets. With a daily processing capacity of approximately 500 tonnes of raw tomatoes, Eastern Trading is now afforded the opportunity to be competitive in relation to modern standards of manufacturing.

Sources: Xinhua/NewsGhana.com.gh, ghanaweb.com, Nigeria News, Lusaka Times, TomatoNews

Some complementary data 
Evolution in the distribution of Chinese paste exports to countries of West Africa. Ranking in seventh place among the importing countries of this region, Senegal is one of the rare countries, along with Benin, to have increased its purchases of Chinese paste in recent years.
 
See also our latest article regarding Algerian ban on imported tomato products
A detailed overview on the situation of Senegalese industry will be available soon...
 
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