Top US Company Boosts Small Business in Africa | Voice of America - English
A leading United States company, Coca Cola, is receiving international praise for an initiative it?s launched to improve sales in Africa, while at the same time supporting thousands of first-time entrepreneurs. The firm?s unique Manual Distribution Centers are managed by local small business people who make profit by distributing products to retail outlets in hard-to-reach parts of the continent. The entrepreneurs use manual means - such as trolleys and baskets - to transport the products.
Thecompany says its network of centers has ?fueled thegrowth of entrepreneurs,jobs, prosperity and, ultimately, economically sustainablecommunities.? At the moment, 1,800 distributioncenters in East Africa alone employ more than 7,500 people and provide overUS$500 million in revenue for local economies. Accordingto Bill Egbe, president of Coke Africa, one of the company?s jobs on thecontinent results in up to 16 local jobs ?further up the supply chain.?He says so far the firm?s Manual Distribution Center project has been an?immense success.? ?It?sessentially a set-up where we have a depot for our products that serves acertain number of retail outlets within close proximity of that depot, usingvery simple delivery systems like pushcarts or trolleys. It is a low-costapproach to doing distribution; you?re not using any mechanized or motorizedmeans,? Egbe explains. ?That limits how far you can take the product, but italso gives you more frequent access to a set of outlets.? Egbeacknowledges that the centers were initially created ?out of a businessnecessity. We were trying to find a way to expand our distribution footprint,and to include some of the local entrepreneurs in how we expanded ourdistribution. And by doing so we were able to increase the availability of ourproducts in the retail outlets.? He says that as Coke implemented the project on a largerscale, it began to realize that it held the potential of ?benefits that fitwell with the economic development and poverty reduction agenda of the UnitedNations Millennium Development Goals (MDGs). And that?s how we figured out thatthis is a tested model that works and meets our business needs but in thatprocess helps other people get going in terms of entrepreneurship and creatingincome for themselves.? In September 2000, 189 nations adopted and signed theMillennium Declaration, setting the primary goal of making the world a betterplace, including the target of eradicating extreme poverty and hunger by 2015. Inidentifying potential sites for the Manual Distribution Centers, says Egbe, thecompany investigates areas that have ?enough of a concentration of retailoutlets? that would enable individually operated centers to function at aprofit. ?Oncethat is done, then the company goes out to identify potential entrepreneurs whoare willing and able to run this new business that?s going to be established toservice these outlets.? Coke interviews candidates, assessing their levels ofbusiness experience and their access to capital. Successful candidates are thenassisted with more capital and securing lease agreements for business premises. ?Fromthere on we have a well-tested model that helps these entrepreneurs figure outstock they need to have, how much cash flow they need to have to maintain thebusiness, what are the working capital requirements, and how they can recruitsome laborers to help in the delivery of products,? Egbe says. Hesays there?s also a lot of work involved in ?getting the business established andthen ongoing monitoring and support of the business once it?s established? butthat the eventual result is thousands of people pushing carts, trolleys andother manual means of transport laden with soft drinks all over rural and urbanAfrica. ?(TheManual Distribution Centers are) spreading all over. In West Africa, you seethem in Ivory Coast, Ghana and Senegal.? Egbe says the centers are ubiquitous in East Africa, withthe greatest concentration in Ethiopia, but that the model is being adopted acrossthe continent ?to service the needs of the local markets in having a low-costdistribution model?. You also have large numbers in Uganda, Tanzania and Kenya.You start seeing them now in Nigeria, in (the capital), Lagos. You seevarieties of these Manual Distribution Centers in South Africa, parts of thesouthern tip of the continent like Mozambique, Zambia; you see some of them inAngola.? Egbereveals that ?surprisingly enough,? the people managing the centers are mostlyfirst-time entrepreneurs. And many are women. ?Agood example is Tanzania, where you would have about a third of theseentrepreneurs that are female, they?re women who are getting into business forthe first time. You have another third where it?s husband and wife that go intothis business, usually run by the wife. So in Tanzania, two thirds of theseManual Distribution Centers will be run by women.? But Egbe says his company usually insists that its centermanagers possess at least ?basic levels of education? to enable them to ?keepthe accounts, manage the inventory, and be able to reconcile their books at theend of the month?. The rest of the training will be delivered by the Cokesystem.? The firm is also usually ?quite strict? in choosing peoplewho don?t have ?other big business interests.? Egbe says for the centers to beeffective, the entrepreneurs have to be dedicated. They have to ?focus on thesebusinesses, to be involved on a day-to-day basis. They cannot start this andthen hand it over to a friend or cousin to run; they have to be really involvedin the business to make it successful.? He maintains that if Coke is able to replicate the ManualDistribution Center concept in more places in Africa, it?s going to make a bigdifference in hundreds of thousands - and perhaps millions - of lives, and?make a real dent? in poverty on the continent. ?We are committed to scaling up thisinitiative,? he says. ?As part of our contributionto meeting the MDGs, by 2010we want to create between 1,300 and 2,000 new centers, create between 5,300 and8,400 new jobs and generate new revenue of between $320 million and $520million in local economies.?