Rabobank Report: Engagement Of Global Food & Agri Companies Essential For
Sub-Saharan Africa To Reach Full Food & Agri Potential
NEW YORK, Oct. 17, 2013
NEW YORK, Oct. 17, 2013 /PRNewswire/ --Rabobank has published a new flagship
report about the need for global food and agri (F&A) companies to help
realize the significant untapped agricultural power of sub-Saharan Africa. In
the report, titled "How global companies can help sub-Saharan Africa reach its
F&A potential," Rabobank calls for F&A companies to increase their engagement
with the region by acting as significant catalysts in sub-Saharan Africa's F&A
Rabobank sets out four zones of opportunities and five keys to success to
improve Africa's F&A capacity and help it meet the world's increasing need for
food. The report was presented by Rabobank Executive Board Chairman Piet
Moerland at the Rabobank Duisenberg Lecture held in Washington, D.C. on
October 13^th in conjunction with the annual meetings of the IMF and World
Rabobank's report comes at a time when the rampant increase in demand for
agricultural commodities and stagnating supply growth have created an era of
scarcity and higher price volatility. At the same time, the bank says, the
gap between Africa's actual and potential agricultural output is widening.
"Given the recent developments and fewer growth opportunities in the global
F&A sector," says Bill Cordingley, Head of Food & Agri Research for Rabobank
in the Americas and report co-author, "global companies will need to look to
markets like Africa to sustain future growth rates. There are increasing
numbers of global F&A companies engaging with Africa, as illustrated in our
report, but they need to go beyond the initial investment and
knowledge-building stage where many of them stop. The more challenging step
is to identify specific value chain opportunities and credible local partners
who can co-invest or become a supplier. Nothing works in Africa without
partnerships or supply chain alignment. But for those companies that get it
right, the rewards will be considerable."
Rabobank believes many more F&A companies need to change their mindset and
take steps now to commit to Africa on a long-term basis. In both helping
Africa reach its F&A potential and addressing the increasing requirements of
Africa's emerging urban consumers, global F&A companies will need to adapt
their business models to the circumstances on the ground. But there are some
overall principles which Rabobank identifies for where global companies should
focus their efforts and how they can deliver a successful outcome.
The report identifies four zones of opportunity where global F&A companies
1.Increase production sustainably – address the yield gap in existing
farming operations, expand operations where possible and develop new land
2.Add value by building sustainable supply chains for all players – reduce
risk, improve productivity and access to capital and markets; minimize waste
and locate processing close to production.
3.Become regionally and globally export competitive – utilize market access
and insights; unblock infrastructure bottlenecks.(In particular, Rabobank
identifies export opportunities for African cocoa, coffee, cashew nuts, palm
oil and sugar.)
4.Address African consumers' increasing and changing requirements – the
local market will be key to success.
Rabobank's report also identifies five keys to success in creating a
sustainable African strategy:
1.Adopt an inclusive approach - build trust, mutual respect and create
mutual value along the value chain, respecting local rights and interests.
2.Make a long term commitment –demonstrate trust by co-investing in
infrastructure and supporting local market development.
3.Establish supply chain partnerships – develop robust, multi-year supply
agreements that align interests along the chain, combining local and global
approaches and expertise.
4.Bring unique capabilities, not just capital – include access to
technology, expertise, markets, customers and leadership so global companies
are "needed" not just "used."
5.Reduce risk in the supply chain and secure finance – facilitate supply
chain finance, and improve prospects for commercial finance being made
available to local and regional F&A companies.
While the macro-level picture of Africa's economic and social development is
increasingly positive, this only increases the strain on an already lackluster
F&A sector. Africa's share of global agricultural exports is falling, while
imports of many foods are rising. The continent's supply chain infrastructure
lags well behind the rest of the world. As a result, African consumers are
paying more for basic food commodities, have fewer choices and face higher
food safety and security risks than consumers in most of the rest of the
world. Africa must act now to close the gap.
Agribusiness and the wider food sector have yet to emerge in Africa, where
agricultural production currently represents over 60% of the entire value
chain (source: the World Bank). Globally the figure is 22%, with the
remainder being derived from off-farm value creation, demonstrating the
opportunity and challenge for global F&A companies. The opportunity for
global F&A companies also lies in Africa's domestic food market, which is
expected to rise threefold from USD 313 billion today to USD 1 trillion by
2030 (source: the World Bank). Over half of the demand will come from growing
urban centers, where the rapidly increasing middle-class will require higher
quality food and the infrastructure to support this.
Justin Sherrard, Senior Rabobank analyst and report co-author, concludes, "F&A
companies face the challenging but ultimately rewarding task of building
successful businesses in Africa, which will in turn help African F&A to meet
its great untapped potential. If these companies succeed, Rabobank expects
global capital and F&A know-how to flood into Africa in an unprecedented way."
Rabobank's report on how global companies can help sub-Saharan Africa reach
its F&A potential is available to media upon request.
About the Rabobank Duisenberg Lecture
Now in its tenth year, the Duisenberg Lecture addresses topics close to the
bank's heart as a leading food and agribusiness bank, and topics that are
relevant to the international development agenda. The event is named after the
late Dr. Wim Duisenberg, former President of the European Central Bank and
Vice-Chairman of the Executive Board of Rabobank Nederland (1979-1981).
At the 2013 Duisenberg Lecture held in Washington, D.C., Piet Moerland,
Executive Chairman of Rabobank's Executive Board, presented the report to Don
Thompson, CEO of McDonald's Corporation.
Rabobank Group is a global financial services leader providing wholesale and
retail banking, leasing, real estate services, and renewable energy project
financing. Founded over a century ago, Rabobank is one of the largest banks in
the world, with nearly $1 trillion in assets and operations in more than 40
countries. In North America, Rabobank is a premier bank to the food, beverage
and agribusiness industry. Rabobank's Food & Agribusiness Research and
Advisory team is comprised of more than 80 analysts around the world who
provide expert analysis, insight and counsel to Rabobank clients about trends,
issues and developments in all sectors of agriculture.www.rabobank.com/f&a
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Contact: Lynne Burns, email@example.com, (212) 808 2581
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