Newly appointed Chief Executive Officer (CEO) of South Africa’s biggest consumer foods maker Tiger Brands; Lawrence MacDougall, has said that the company would review its strategy and overhaul its operations, after a botched investment in Nigeria and difficulties in South Africa and its other exports markets.
Tiger Brands is facing shrinking demand for its products, especially in the Nigeria and Mozambique, coupled with a bleak outlook in South Africa (its largest market) where consumer confidence is near 14- year lows.
“Being able to focus our attention and being able to prioritise where we spend our money is going to be critical to a good set of results,” MacDougall said.
“We need to know which buttons to push and which to prioritise,” he told reporters after a interim results presentation for the company, which makes bread, breakfast cereals and energy drinks.
Tiger Brand announced last December that it will sell its 65.7% stake in its loss making Nigerian division to Dangote Industries Limited for $1.
That deal saw Tiger Brands receive an immediate cash injection of $46.1m with Tiger Brand taking ownership of debt of about $26.3 million, which meant the South African company effectively lost all of the money it invested in the company.
Tiger Brands has had a bitter experience in Nigeria, with the economy being hit hard by oil price slump and foreign exchange scarcity.
Chief Operating Officer, Noel Doyle told Reuters the company would tread more cautiously in uncharted markets and currency and inflation concerns could dampen the appeal of any acquisitions in the near future.
“If we brought a big acquisition today to the market in Africa shareholders would quite rightly have a lot of questions about it and there would be some resistance,” he said.
