Kumasi, Ghana: Potential Opportunities for Investors - Millennium ...

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Fruit processing market In addition to the Ghanaian market, there is the potential for Ghanabased manufacturers to enter regional and international fruit juice markets Indicative fruit juice market sizes, 2007 a 1 US, UK, Germany and Netherlands Nigeriaa 1 Ivory Coast, Burkina b c Faso and Togo Ghana 2 c US$37.1bn US$320m US$50m US$50m Notes: a Includes pure fruit juices and fruit juice blends b Based on same spending per capita on non-carbonated fruit juice drinks as Ghana adjusted for relative GDP levels c Non-carbonated fruit juices Sources: 1 Interactive consumer database, Datamonitor, November 2007 2 KPMG in Ghana interview programme and World Bank Market in Ghana The demand for soft drinks in Ghana is significant and forecast to grow. The overall soft drinks market in Ghana is estimated to be in the region of US$150 million, split US$85 million in carbonated soft drinks and US$65 million in noncarbonated soft drinks1 (of which approximately US$50 million is the fruit juice market). In the carbonated soft drinks market, Coca-Cola has a 95 percent market share. Based on KPMG’s interview programme, the Ghana’s soft drinks market has the potential to grow at around 5 percent per annum between 2007 and 2010. Although official statistics appear unreliable in absolute terms, the available data, taken together with market evidence and KPMG’s interview programme, indicates a significant growth trend in fruit juice imports. Export possibilities Neighbouring countries represent potential additional markets, particularly where these markets are currently underdeveloped. Ghana could act as a central manufacturing location from which neighbouring countries’ soft drinks markets could be supplied. Page 30 Limitations in transport infrastructure and lower levels of consumer affluence are likely to act as constraints to entering neighbouring markets. While Nigeria represents a substantial fruit juice market in the region, KPMG interviews indicate that the market’s relative maturity and the high costs associated with shipping product from Ghana to Nigeria, act as notable deterrents to attempts to access the market. Successful market entry into the expansive markets of the US and Europe is likely to be dependent on developing a partnership with an established market player. The fruit juice markets in the US and Europe are dominated by a limited number of suppliers and retailers. • Three suppliers account for almost 75 percent of the US fruit juice market 2 • In the UK, four supermarkets account for over 80 percent of all grocery sales 3 1 KPMG in Ghana interview programme 2 ‘Juices in the United States’, Datamonitor, December 2006 3 ‘How Britain Shops 2007: Food and Grocery’, Datamonitor, April 2007 © 2008 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
The Ghanaian fruit juice market alone represents an attractive target market Summary of key positive influences on domestic fruit juice production Production cost advantage Local producers should benefit from lower transport and labour costs creating potential margin advantages over imported products Consumer preference Consumer demand appears to be robust even at higher price points Fruit juice market in Ghana Fragmented value chain Potential for more equitable distribution of value throughout the supply chain Source: KPMG in Ghana interview programme and desk research Current production The scale of individual domestic fruit juice producers varies considerably and is currently concentrated on pineapple juice. While there are a limited number of largescale domestic fruit juice producers with annual production in the region of three million litres, these facilities mainly manufacture pineapple juice. Pineapple and citrus fruit production currently appears to consist mostly of individual farmers’ own small-scale production supplying a very local market. Foreign fruit juice producers who have notable coverage within the Ghanaian market include: • Well-known UK brands such as Just Juice and Del Monte • Regional producers such as Ceres Fruit Juices from South Africa “ I think there is a great opportunity in producing fruit juices in Ghana.” Manufacturer Consumer interest Ghanaian consumers seem to be developing a stronger preference for fruit juices even where these products come at a price premium. “ Many Ghanaians like to drink pineapple juice while eating as it appears to soothe their stomach.” Consumer Despite the products having a price point that is commonly two to three times higher than locally-produced fruit juices, fruit juice imports appear to be growing strongly. Retail interest There are no dominant players within the grocery retail value chain in Ghana although imported fruit juice brands dominate in terms of shelf space. Page 31 There is considerable fragmentation at every level of the grocery retail value chain which should hinder the creation of value chain imbalances similar to those present in more developed markets such as in Europe where retailers enjoy a particularly strong position. © 2008 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Page 1 and 2: TRANSACTION SERVICES Kumasi, Ghana
Page 3 and 4: Foreword As part of KPMG’s Global
Page 5 and 6: A substantial programme of future,
Page 7 and 8: The Millennium Cities Initiative Th
Page 9 and 10: With its political stability, econo
Page 11 and 12: Ghana’s abundant natural resource
Page 13 and 14: Ghana has established a track recor
Page 15 and 16: Foreign investment interest in Ghan
Page 17 and 18: Kumasi, as Ghana’s second city, i
Page 19 and 20: Investment in Kumasi Page 17 © 200
Page 21 and 22: In common with other regions in Gha
Page 23 and 24: Issues to be addressed The secure s
Page 25 and 26: Development plans are seeking to ea
Page 27 and 28: The main initial projects to free-u
Page 29 and 30: Other initiatives promoting investm
Page 31: Value proposition Ghana’s growing
Page 35 and 36: Competition Current competition is
Page 37 and 38: The cost of establishing a fruit ju
Page 39 and 40: Value proposition Kumasi’s local
Page 41 and 42: Large investment in the retail envi
Page 43 and 44: Key Negative status Positive status
Page 45 and 46: Hotel accommodation Page 43 © 2008
Page 47 and 48: The hotel market Ghana’s visitor
Page 49 and 50: Hotel accommodation is concentrated
Page 51 and 52: Enablers and constraints Key Negati
Page 53 and 54: Pharmaceuticals Page 51 © 2008 KPM
Page 55 and 56: Pharmaceuticals manufacturing marke
Page 57 and 58: Leading local pharmaceuticals manuf
Page 59 and 60: Enablers and constraints Key Negati
Page 61 and 62: Appendices Page 59 © 2008 KPMG Int
Page 63 and 64: Opportunities Overview Industrial p
Page 65 and 66: Appendix 2: Acknowledgements KPMG S
Page 67 and 68: Appendix 3: Glossary of terms ACN A

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