Global Courant
STORY: Nestle companies in Nigeria and other African countries are expanding their sourcing of local raw materials.
This includes ingredients such as starch and turmeric.
The move is designed to reduce exposure to foreign currencies – a cause for concern for the industry.
As a result of the health crisis and subsequent supply chain issues, consumer goods manufacturers have stepped up efforts to bring production and sourcing closer to their markets.
And growing debt in many African countries has put pressure on foreign reserves and created currency volatility, making it harder and more expensive to import inputs.
Last week, for example, Nigeria’s central bank allowed the naira currency to fall as much as 36% on the official market.
Now the food giant, which has more than 2,000 brands, including KitKat and Nescafe, is replacing imported cornstarch in Nigeria with cassava starch.
It also develops local suppliers of vegetables and herbs for some products.
And it told Reuters it has already helped seven local suppliers increase capacity to meet their delivery needs.
In a statement, the Swiss company said it is currently looking to expand its localization trajectory to Ivory Coast, Cameroon and Senegal.
Rival Unilever told Reuters last month that foreign exchange concerns were also a big factor in bringing more products out of Africa.
