With new offerings, Hapag-Lloyd continues to focus on growth in the booming region of West Africa
Cashew nuts, cocoa, rubber, cotton, frozen fish, bananas – many of the goods traded across the world today come from West Africa as raw materials. Cashew nuts are exported to Vietnam and India, where they are roasted and packaged before being re-exported. Rubber is transported to factories in Europe and Malaysia, where it is among other things used to make tires. While cotton goes to the textile factories in Asia, bananas from Ghana and the Ivory Coast are delivered directly from the plantation to retail businesses. And oceanic bonito (also known as skipjack tuna) is fished off the coast of West Africa and exported as frozen goods to Thailand, Indonesia and South America, where it is packaged in cans and then re-exported to retail shelves around the world.
“The business is diverse – and it’s booming,” says Diego Barriga, Hapag-Lloyd’s Senior Manager Sales for West Africa. In fact, Hapag-Lloyd’s business in Africa has grown by 30 percent over the last year, and Barriga is convinced that “there’s no end in sight.” West Africa accounts for around 60 percent of Hapag-Lloyd’s cargo on the continent, and this figure is expected to increase. Barriga has high expectations related to the expansion of the important port of Tema in Ghana, which is scheduled to be completed in the second half of 2019. Hapag-Lloyd has opened a new office of its own in Tema this year, and positioned itself early on for the expected boom with a young, highly motivated team.
Container shipping industry actively drives economic growth
Without a doubt, in addition to benefiting from economic growth in Africa, the container shipping industry is also an active driver of this development. Just this November, Hapag-Lloyd launched its third West Africa service, the Dakar Express (DEX). “This was also a clear signal that we are pursuing ambitious plans in this region,” Barriga emphasizes. The DEX offers weekly services from Northern Europe to Senegal and Mauritania. For Senegal, this opens up additional trade routes to important markets: Fresh melons go to Spain, frozen fish is delivered to the Mediterranean region, and fresh vegetables – such as tomatoes, corn and green beans – head to supermarkets in Northern Europe. And, as part of what Barriga calls “the cherry on the cake,” Mauritania’s location on the edge of the Sahara means that Hapag-Lloyd’s DEX service is also opening up a whole new market.
However, if you plan to do business in Africa, you also have to be prepared for problems. The often dilapidated infrastructure can entail a cost factor that shouldn’t be underestimated. “The worst is in Nigeria, where the port is chronically congested and there are also many land-side problems,” Barriga warns. There, the average trip from the port to the customer’s warehouse takes five days. “This means that the appointed trucker eats, sleeps under his truck in a handmade hammock, and doesn’t even have outhouse to use,” Barriga says to illustrate the difficult conditions.
African economy better than often expected
However, such conditions do not dampen the widespread feeling of optimism on the continent. Indeed, Africa is doing better economically than is often assumed. The continent is home to 16 of the world’s 26 fastest-growing economies, young and skilled workers are in good supply, and the digital infrastructure is also better than one might expect. “Access to internet and smart phone technology is boosting development,” Barriga says. He sees evidence of this development in Quick Quotes, Hapag-Lloyd’s new online tool, which can be used to obtain quotations practically in real time. “The inquiries from Africa are constantly increasing,” the sales manager says with satisfaction.