DP World expands logistics presence across Africa, prioritizing Nigeria

DP World, a Dubai-based logistics company that has bought two companies in the past three months, is looking to capitalize on Nigeria’s rapidly changing consumer sector in its bid to expand into Africa.

In March 2022, DP World announced a 90% majority stake in Imperial Logistics, a South African logistics company, and in July it additionally acquired a majority stake in Africa’s FMCG Distribution Ltd., a subsidiary of the Chanrai Group. Summit.

The company in a statement said its acquisition of the two companies is in line with its plan to expand its footprints on the African continent by leveraging a high-potential industry as it looks to a larger market with increased business activities and more distribution channels such as FMCG industry and other opportunities.

“This transaction is part of our ambition to become the premier market access and logistics partner in Africa by connecting trade flows in and out of Africa, which has a significant presence in Africa, a market where trade is expected to grow to more than twice GDP. driven by population growth, accelerated urbanization and the rise of the middle classes,” said Ahmed Bin Sulayem, Chairman and CEO of DP world group.

According to Allied Market Research, the global FMCG Logistics Market was valued at USD 1,056.58 Billion in 2019 and is projected to reach USD 1,400.80 Billion by 2027, registering a CAGR of 4.6% from 2020 to 2027.

According to Frank Ojadi, a lecturer at the Lagos Business School, the number of port owners around the world has led to fierce competition, pushing port owners to capture as much of the global market as possible.

“DP World is expanding its borders to access other countries and continents due to competitive pressure, and that is why they have been interested in establishing a presence in African countries,” Ojadi said.

The Chanrai Summit Group trades and operates under multiple names across all of its business activities. With subsidiaries like Africa FMCG, Afriventure, a supply chain and distribution company with customers like P&G, which is present in important African markets and distributes products like Lucozade boost, Ribena, Kerrygold, Orbit, Snickers, M&M, Mcvities, among others.

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In January 2021, Procter & Gamble (P&G) awarded a major contract to Imperial’s joint venture with Chanrai Summit Group for end-to-end distribution and logistics of P&G’s consumer goods in Nigeria.

In April 2022, Africa FMCG, a subsidiary of Chanrai Summit Group, its flagship company, Fareast Mercantile Company, purchased energy drinks Lucozade and Ribena for $14 million from Suntory Beverage & Food Limited (SBF). The share transfer and loan transfer agreements, which would have cost $7 million each, are expected to close in the second quarter of 2022, in which DP World now owns a majority stake.

Building on its business heritage built through the Chanrai group of companies for over 130 years, AFMCG has developed longstanding relationships with multinational FMCG companies, established itself as a player in leader in the Nigerian consumer market and has demonstrated good corporate citizenship through his broad-based social network. impact initiatives.

Mohammed Akoojee, COO of DP World Logistics and Group CEO at Imperial, said the company is gaining a foothold in Nigeria through the AFMCG and this is due to the large population and the ability to sell pan-African solutions to his clients.

“As one of the largest economies on the African continent, with attractive demographic and macroeconomic fundamentals, Nigeria boasts of a large consumer market and the AFMCG presents an ideal opportunity with the scale needed for us to sell truly pan-African solutions to our constituents and clients,” Akoojee said.

Ojadi added that the development of DP World through the acquisition of a majority stake is aimed at building capacity even in the Nigerian hinterlands and other parts of the world so as to have a stronghold to compete with others. .

“So beyond just unloading ships and containers, a lot of them have to find a growth path, an expansion convention, and that’s where the AFMCG comes in because they have a very strong distribution and logistics capacity, and by acquiring them, DP World can expand into the hinterland of the port, distribute its products and have a longer reach in Nigeria,” Ojadi said.

Currently, DP World operates nine ports and terminals in 8 countries in Africa – Algeria, Angola, Egypt, Mozambique, Rwanda, Senegal, Somaliland and South Africa.