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DR CONGO - Industry

Nadir T. Jaffer

CEO, Orbit Enterprises SARL

Bio

Nadir T. Jaffer has served as CEO for over 30 years in FMCG markets in Central Africa. He has specialized in water and carbonated drinks as well as condiments, snacks, and cleaning products including one of the best-selling bottled water brands in the DRC, “Canadian Pure”. He holds a Bachelor of Arts in Commerce from Simon Fraser University in Canada.

"I see competition as a healthy part of the market. Competition is part of how markets evolve. Pepsi entering the market is an opportunity for us to highlight what makes our brand unique."

TBY talks to Nadir T. Jaffer, CEO of Orbit Enterprises SARL, about investing the DRC, competing with other drinks brands, and expanding into the cosmetics segment.

Orbit Enterprises has a long history in the DRC. What factors made the country attractive at the time, and how have your operations evolved?

Although our family business started in the DRC in 1985, originally focused on soap and edible oil manufacturing, we are 4th generation born in Africa. I am born in Bukavu (Kivu), and we consider this country our home. The country’s population size and the availability of raw materials locally made it an ideal opportunity to invest in soap and oil. Unfortunately, due to sudden scarcity of locally produced palm oil, we had to close our soap plant and edible oil refinery about three years ago. Fortunately though, we had the foresight years ago to diversify from purely manufacturing soap and edible oil, and expanded our business into various sectors – some of which include the production of carbonate soft drinks (CSD), juice, mineral water, cosmetics, plastics, PET preforms, and sweet and savory snacks.

The DRC has multiple other drinks brands here. In fact, Pepsi has opened a factory here while Coca-Cola is about to do the same. What is Orbit’s strategy to maintaining relevance in the market?

I see competition as a healthy part of the market. Competition is part of how markets evolve. Pepsi entering the market is an opportunity for us to highlight what makes our brand unique. We can focus on our strengths, whether it’s quality, customer loyalty, or specific market needs. It pushes us to stay sharp and deliver even better products and experiences. Over the last 15+ years, we have experienced a large number of competitors in all our manufacturing sectors – be it in mineral water, CSD, juice, cosmetics and snacks. New factories are opening up constantly in the DRC, and this competition challenges us to continue innovating and improving. As long as our brands command respect (which they do), we know that we will always have an opportunity to grow. At the same time as our competition is growing, we must also remember that demand for fast moving consumer products is increasing, as the population of the country is growing at a rapid pace. As for Coca Cola, they have been established in the DRC for over 50 years. When these multi-national corporations grow, we too grow alongside them. In the end, this business is all about adaptability. Orbit Enterprises is here to stay.

How has the market changed post-pandemic, and how has Orbit evolved accordingly?

The manufacturing industry in the DRC has experienced notable changes in the post-pandemic era, shaped by both local and global factors. During the pandemic, the manufacturing sector in the DRC faced significant disruptions in supply chains, and our company was not isolated by this. This was due to global lockdowns, transportation restrictions, and delays in the importation of raw materials. Many factories in the DRC had to reduce or halt production as they faced difficulties in obtaining necessary inputs. Thankfully, Orbit Enterprises houses a number of brands which are well known and well loved by the Congolese market. This, coupled with our strong supplier relations over the decades and foresight to diversify into other fast moving consumer products allowed us to continue to provide high quality products (at attainable prices) across the country. Post-pandemic, there has been a shift toward local sourcing and diversification of suppliers to reduce reliance on global supply chains. Manufacturing sectors, such as ours in consumer goods, have been working to strengthen local production capacities, reducing dependence on imported materials. Companies in this sector, and in this region in particular, have to be creative and open to continually investing to adapt to new market conditions or to make production more economical. The pandemic also of course accelerated the push for digitalization and automation in the manufacturing sector globally, and the DRC was no exception. This has led to overall greater efficiency, cost reduction in some areas, and improved competitiveness.

In addition to beverages, Orbit Enterprises is also expanding into the cosmetics sector. What are your plans there?

When I first came here almost 40 years ago in 1985, Kinshasa’s population was around 3-5 million (the exact count is difficult to estimate), and in the last 40 years, it has allegedly grown to now be around 20 million. We expect almost every consumer sector to grow just as rapidly. This country is blessed with natural resources and has immense potential even though some might assume its population to be impoverished. Orbit Enterprises has decided to focus its growth strategy on expanding into various cosmetic lines in the years to come, as this market now in the DRC has become more sophisticated. We will continue to expand this arm of the business going forward. There is a lot of opportunity here as there is a growing middle class in the Congo, and these consumers are demanding quality cosmetic products, similar to those imported from Europe and Asia.

How limiting are operational costs in the DRC?

The DRC has limited infrastructure, especially outside of major urban centers like Kinshasa and Lubumbashi. Even in Kinshasa, the road infrastructure does not enable us to make deliveries in an efficient manner. We now need double the capacity of trucks to deliver the same quantity due to road congestion. We hope that the government is going to take the necessary measures to improve the infrastructure of this rapidly growing city. It is also important to mention that the Congolese Franc (CDF) has experienced high inflation and significant depreciation against major currencies, which can make both local and foreign sourcing of goods more expensive. The Congolese consumer is very sensitive to price increases; even a very small percentage increment can cause a lot of disruption in the market. Therefore, it is up to the authorities to ensure a stable currency against the USD, as this is mostly a dollar based economy. In addition to inflationary challenges, the DRC has a volatile electricity supply. Although the country has vast hydroelectric potential, companies have to invest in backup generators, which increases operational costs significantly – especially for industries like ours, that require stable and reliable power for continuous production. In conclusion, if the country made the appropriate investments, costs of goods for companies would be drastically lowered and beneficial to the economical growth of the country. The DRC, with its vast natural resources, has a potential to become the second largest economy of Africa, after Nigeria. Its only up to the authorities to develop the infrastructure, to ensure continuous electricity supply and to maintain a stable currency.

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