The proprietor of Good African Coffee, Andrew Rugasira, has called for partnerships between local and foreign brands in value addition, saying this will unlock the barriers that inhibit Ugandan businesses from accessing international markets.
There is need for a shift from the conventional approach of foreign investment, to partnerships that make it easier for local products to be marketed and distributed in major markets, he said.
He was speaking at the opening of business-to-business engagements between a visiting delegation of French businesses and Ugandan companies, at Kampala Serena Hotel on Monday.
“Partnerships need to shift from come and invest in our country so that we can import-replace, or let’s export to your markets. It can be more dynamic,” he said.
He shared his experience with Good African Coffee saying one of the challenges the business faced in its initial stages 15 years ago was exporting coffee to key markets.
“We were such a small brand on these massive supermarket shelves. And it did not only take us 2 to 3 years to get our coffee on the shelf, but also, all the big brands were piling pressure on the supermarkets not to list our products,” said Rugasira.
“If we had partnered with indigenous English or French brands to be able to take coffee from here roast it, pack it and put it on the shelf, with that distribution, marketing and branding, we would have much more sustainable opportunity in those markets”.
He said such partnerships are beginning to emerge, citing one between a Danish co-op and a Kenyan firm where coffee is roasted in Kenya and is shipped to Denmark under the Danish co-op brand.
France is the third coffee market in the EU (13 percent of all the green coffee into the EU goes to France). On average, each individual French citizen consumes 5.1 kilograms of coffee annually.
Available statistics indicate that France imported 5.6 million bags of coffee in 2018 which is more than all the coffee produced in Uganda.
The market value of coffee in France is USD 14bn while roasted coffee is USD 10bn.
“I think competitiveness will no longer just be specialization because of comparative advantage. Competitiveness is going to be a result of creating African brands in partnership with those who have created brands in Northern Atlantic countries, and that partnership producing products that we can sell in the global market,” Rugasira said.
He said the signing of the African Continental Free Trade Agreement is yet another opportunity that will create wider market for African products.
Regarding areas with great potential for investments for France, Rugasira highlighted cocoa and essential oils whose production in Uganda, he said, is another low hanging fruit.
Uganda is looking to address the trade imbalance with France. In 2018/19, Uganda made USD 15.4m worth of exports to France and imported products worth USD 45m from France.