Tiger Brands Presentation

Tiger Brands Limited
Fabulous Group 3: Denise Botha, Seema Bhikha,
Estiaan Joubert, Andra Moolman & Michael Schneider

Agenda
 Company Background
 Group operations structure
 International Strategies
 Market entry strategies
 International Trade and Laws
 Evaluation of international strategies

Company Background
 JSE Limited Top 40 company
 Fast Moving Consumer Goods (FMCG) industry
 One of the largest manufacturers and marketers of FMCG industry products in Southern Africa
 4 key operational divisions: Grains, Consumer brands, Groceries and Tiger Brands International
 Grown and maintained success through the renovation and innovation of its brands.
 Approach to expansions, acquisitions and joint ventures has given traction to a distribution network that now spans more than 22 countries.

Tiger Brands Limited
Group Operations

Nigeria
TB
Internationa l Tiger
Brands
Limited

Grains

Groceries
Consumer
Brands

Africa
Rest of the world Rest of
Africa

International Strategies
Group Strategy pillars:

 Tiger Brands International strategies for expanding into Africa:
1) Acquisitions (WOS)
2) Partnerships (JV)
3) Exports
)Acquired and partnered with companies that produce FMCG goods that compliment, strengthen and expand their own product offerings. )Strategically chose companies that would help them enter and gain market share in the various African countries. Market Entry Strategies

Distribution of Tiger Brand products into African countries (exports)
Acquired manufacturing and distribution companies in Africa

Acquired Manufacturing and distribution companies in South Africa

Forms of acquisitions

International Trade and Laws
 WTO tariff profile 2014 – tariff entry barriers
 Nigeria implemented WTO Agreements since 1995 and full compliance with multilateral principles – rules-based economy
 Most restrictions on foreign investment and related payments have been abolished. (Nigeria)
 Double tax treaties between RSA and Nigeria ( Income tax and CGT)
 Ownership – allowed to own 100% with exceptions to some industries
 Assets owned by foreigned nationals not subject to arbitrary exproriation NO Duty-free
Some dutyfree

 Nigeria (1995), Cameroon and Ethiopia
 Kenya, Zimbabwe

Evaluation of International Strategies
 Nigeria (Largest economy in Africa)
 Large consumer market(1,6bn people) and growing rapidly
• Country operations running at a loss ( -12,4%) (1 st half of 2014)
• Remains priority to fix and grow their existing business
• Contributes to 14% of total group turnover
• Dangote Flour Mills (63% JV)
• Writing off 1,5bn loss – 2 out of 4 mills mothballed
• New industry surplus capacity came on stream as TB entered the market
• Increased wheat levy compounded margin compression
• Paid strategic premium for the business to achieve immediate scale
• Underestimated complexities of running a large business in Nigeria

Evaluation of International Strategies
 Key performance benchmarks include:
• Financial metrics – long term profitable growth : Contribution to total turnover from international operations - > 30% by 2017
• Current international operations contributes 24.9% to total turnover(1st half of 2014 results)
 Tiger Brands International have produced excellent performance driven by topline growth
 Other challenges Tiger Brands International face
• Price competitiveness outside SADC region
• Mozambique border challenges and civil unrest

Thank you…….