How to become an African success story: Six tips from Zambeef’s boss
By Kate Douglas, howwemadeitinafrica.com
“There was no empire in the beginning I can assure you of that,” said Francis Grogan, co-founder and CEO of Zambeef, a US$300m-plus business with operations in Zambia, Nigeria and Ghana.
Born in Ireland, Grogan arrived in Zambia in 1991 to help a struggling meat factory before starting Zambeef in 1994 with his Zambian-born business partner, Carl Irwin. The company got its first big break when South African retailgiant Shoprite entered the market in 1995 and asked Zambeef to operate their in-store butcheries.
Today Zambeef is a market leader in the production, processing, distribution and retailing of a range of meat and agri products – such as beef, edible oils, flour and stock feed, to name a few. In addition to over 110 independent retail outlets and Shoprite butcheries throughout Zambia, as well as three wholesale depots, the group also runs the fast-food brand, Zamchick Inn.
In an interview with How we made it in Africa, Grogan shares some of his tips for growing a successful company in Africa.
1. Working with governments is vital
“It’s absolutely important,” emphasised Grogan. “If you don’t have a good working relationship with the ministries that are particular to your business, I think you are going to have serious problems. If you are going to butt heads with the policy makers, you are asking for trouble. It’s the same with every country. That’s normal.”
He added the Zambian government has been a key stakeholder in Zambeef and advises business people to interact with policy makers and align their interests. African governments want their country’s industries to be developed and employment to rise. If a company can show they are investing for the long term, and can positively impact the economy, governments are likely to see a benefit in creating an enabling environment for the business to grow.
“I work particularly with the ministry of agriculture… and if we can convince them of what is needed to promote the beef industry in Zambia, for example, they will take it very seriously. They work closely with companies like us, and they take us seriously because we are 100% committed to the development of Zambia, in particular its meat and agricultural industries.”
2. Hire local talent and have a training programme to promote them
“We see people running into Africa now with big cheque books trying to do this and that. But you need to have hands-on local experience to know what you are doing,” he explained.
Zambeef has invested in a training programme for its management and staff which aims to develop skills and bring promising employees through the ranks. And according to Grogan, this is the backbone of an African success story.
“The people we have at Zambeef are the reason we are successful. It’s not me in particular, it’s the fact that we have, over the last 20 years, managed to hire and train really good, passionate, hard working, devoted staff,” said Grogan.
He added that a lot of Zambian employees have been at the company for 10-20 years and have an expert understanding of the industry. “Look, no cheque book could buy you that.”
3. Don’t ignore the informal sector
Grogan advises business people not to underestimate the large informal market in Africa. In fact, he believes the sector holds some of the greatest potential for business. “The informal sector in Zambia is massive – it’s probably about 75-80% of business.”
In the poultry industry in Zambia, for example, Grogan estimates that no more than 25% of chickens are sold processed. The rest are sold alive in the informal market. “And our stock feed business is doing very well with selling feed to this informal live bird market.”
4. Invest in the supply chain
Zambeef has grown to own much of its supply chain – from the production and feeding of a chick, to the processing and packaging of the poultry sold to the end consumer. The group also has its own logistics arm with one of the largest transport and trucking fleets in Zambia, and the company even owns a maintenance workshop to service them.
Being involved throughout the supply chain not only improves profit margins for companies, but can also be a necessary requirement for businesses to operate more efficiently, meet demand, and expand in African markets. Zambeef’s operations along the supply chain grew organically through trying to meet the growing demand from consumers.
“For example, we were buying chickens originally from chicken farmers but they couldn’t give us the amount we wanted, when we wanted, so we set up our own chicken houses and chicken abattoir processing plant.”
5. Diversify and add value
Having a diversified business, explained Grogan, can help protect companies against market shocks.
While the company grew on the back of its meat (particularly beef) operations, today its largest divisions are actually within the cropping and edible oil businesses. Its animal feed division (Novatek), which was originally formed to address the company’s own supply needs, has now grown a strong market share in supplying the livestock industry in Zambia.
The group is also developing a palm project, with its most recent subsidiary Zampalm.
Zambeef adds value to almost everything it produces and, according to Grogan, nothing goes to waste. For example, once cattle are slaughtered, its beef, head, hooves and organs are sold. The hides are then processed by the company’s Zamleather subsidiary and produced into footwear under the Zamshu brand.
6. Find the right business partner
“You need to have complementary skills,” noted Grogan. “I was very lucky with Carl. He is a chartered accountant and very good administrator, whereas my skills are on the meat production and operations side.”
But, he added, the most important thing to look for in a business partner is complete trust. “Trust is everything, and so is having confidence in your partner. If you don’t have the confidence and trust in them, then it’s simply not going to work.”