AFRICA is not a star performer when it comes to manufacturing. Its contribution of manufacturing to Africa’s GDP has remained at about 10% in the last 40 years.
And when many folks refer to “Made in Africa”, it is often is an exhortation to support fair trade, rather a proud statement about the origin of goods.
The struggles to produce in Africa are varied; many countries lack the infrastructure to develop large scale plants; electricity is still not available for 640 million Africans; and markets for the products are relatively small due to barriers to trade.
It is still easier to get chocolate made in Europe in Africa than it is to get Ivorian made artisanal chocolate in Nairobi.
WILSON’S JUICE, NIGERIA
Yet, despite these struggles, there is a growing number of African entrepreneurs and companies that sniff opportunity where others see hurdles. They are adapting to find success in context in which they operate.
One of those is Wilson’s Juice, a Nigerian based company that makes lemonade. From a US$10 dollar investment in 2010 the company, started by two brothers Seun and Seyi Abolaji, made sales of nearly $500,000 in 2015.
Having left Nigeria as children, the duo returned to visit in 2010 and were unable to find freshly made juice. The frustration was the foundation of their business: Seyi started selling freshly squeezed lemonade to students of Covenant University. Seun Abolaji, a pharmacist by training, saw the disorder at his brother’s stand and told him to start selling the juice in bottles as a way to keep track of stocks and sales.
From those very humble beginnings, the brothers now own a factory in Ota state in Nigeria that employs 36 people full time. The cups have changed to sleek bottles and the company now has two products; old fashioned lemonade, and pink lemonade that they sell in and around Lagos and lately Abuja.
Seyi says there is nowhere else they would rather be and they are right.
Nigeria’s juice industry is huge. According to the country’s federal Ministry of Agriculture and Rural development, 550 million litres of fruit juice were consumed in 2012.
In the same year, beverages and prepared foods accounted for Nigerian naira 87 million worth of imports. The Abolaji brothers’ move to differentiate their product as all natural is resonating with their consumers in a market where a majority of fruit juice is made from concentrate.
Challenges abound; Nigeria has unstable power and the pasteurisation process requires a lot of electricity, which they mainly get from generators.
The legendary Lagos traffic means that their delivery truck needs to leave their plant in Ota at 4:30 am daily to be able to make it to Lagos on time. But even then, the brothers who taught themselves every aspect of the business still persist. They have dreams of building an international brand, thus the choice of “Wilson’s” which, Seun says, everybody in the world can pronounce.
Power may be Wilson’s juice biggest struggle and a major hindrance to the growth of a manufacturing base on the continent, but one Kenyan startup is taking the issue head on.
STRAUSS ENERGY, KENYA
Strauss Energy is a Kenyan company that manufactures integrated solar roofing tiles – tiles that are also solar panels.
The solar industry in Kenya looks set to get massive: Mkopa, a solar lamp company, last year raised $12.45 million to expand their solar lamp business throughout East Africa, and Off Grid Electric also raised $25 million dollars.
The money has however been going to solar lamps that are marketed as improving lives as children can study longer and people can charge their phones.
The thing about lamps is that you can only do so much. You cannot create a manufacturing base and grow quality jobs. This is where solutions like Strauss Energy have big potential.
Their product, currently sold for homes replaces all electricity used in homes and it takes 3 years to return your investment. With the net metering bill currently being discussed, home owners may even have a chance to sell excess power to the national grid.
Strauss Energy was Tony Nyagah, co-founder’s Master’s project. The other co-founder is his sister .
From assembling the panels from scrap plastic, the company now assembles the components made in China for now in Kenya. They are hoping to soon supply the entire East Africa region.
Kenya only has 40% of its citizens connected to the national grid, leaving over 20 million without electricity. The potential for the solution is huge in a country that has sunlight nearly every day.
While Africa is said to be deindustrialising, small companies like Strauss Energy and Wilson’s juice are venturing where few others are. Perhaps Africa’s manufacturing capacity will not be built by large multinationals setting up on the continent, but by plucky local young business innovators, who are not afraid to fail.