African product making: Risk vs rewards

Procter & Gamble, the maker of popular consumer brands like Ariel, Pampers, and Olay, is closely monitoring the inflationary trends in South Africa and the broader African region. Velo Triska, the Senior Vice President and General Manager for Sub-Saharan Africa at Procter & Gamble, shared insights on the company's strategy to navigate through the challenging economic environment. With personal care inflation reaching 9.2% in October, higher than the overall headline consumer inflation rate, businesses like Procter & Gamble are facing cost pressures from various sources such as increased transport freight costs, commodity prices, energy costs, and wage inflation. Despite these challenges, the company remains focused on offering superior quality products to consumers at competitive prices. Procter & Gamble's approach involves identifying consumer needs and developing products that provide value while balancing cost pressures. Triska highlighted the importance of local production for Procter & Gamble in South Africa, which has helped mitigate supply chain disruptions caused by factors like delays at the ports and tight bottlenecks. By investing in local manufacturing facilities, the company has been able to maintain product availability and adapt to changing market dynamics. Triska mentioned the recent launch of a new liquid hand-washed detergent production facility in South Africa as part of Procter & Gamble's ongoing commitment to innovation and growth in the region. Looking ahead to 2023, Procter & Gamble plans to continue investing in the region, with a focus on innovation, production capacity enhancements, and strengthening partnerships with retail and distribution channels. Despite the anticipated inflationary pressures in the coming months, Triska sees opportunities for the company to reinvent its product portfolio, optimize promotional strategies, and streamline the supply chain to remain competitive in the market. Overall, Procter & Gamble's commitment to the African market remains steadfast, with significant investments in local manufacturing capabilities and distribution infrastructure. As the company navigates through economic uncertainties and inflationary challenges, its focus on value creation for consumers and shareholders remains paramount.