Air Liquide's Taki Nkhumeleni and other panellists share their companies’ stories of growth on foreign soil.
Air Liquide is a global company present in 80 countries with between 67,000 employees. In Africa, they operate in Mozambique, Namibia, Madagascar, and Eswatini. Speaking at the Finance Indaba Network 2020, interim CEO and financial director at Air Liquide Taki Nkhumeleni said, “Countries on the southern part of the African region contribute around 12 percent into our business in South Africa.”
Another business expanding their footprint is Massmart into the rest of Africa is Massmart, which has identified an opportunity in the growing African population who will need food and essentials. Mohammed Abdul Samad, Massmart’s CFO, said “Ten percent of our turnover is from the rest of Africa. Our main business is in South Africa, though we are trying to change that.”
Going into a foreign country comes with its challenges: legislation, cultural differences and understanding new markets to expand your business successfully. When you go into a different country you must go in with the respect of the culture and their people and understand trying to drive your corporate culture requires you to respect theirs as well.
“The challenges that we face entering other countries is being able to understand what the legislation is in that country and having to understand the market. The best way to overcome these challenges is being able to partner with local businesses, speaking to other companies who have been in that market for some time, and getting in-country experts to help you,” Taki added.
South Africans also take a very legalistic approach to everything, panellists agreed: we like to get lawyers involved and in other parts of the continent, they prefer to talk things out to resolve the problem. “I remember on a trip to Zambia, at the stock exchange regulatory panel where we took our lawyers along to resolve a problem. The CEO there asked us why we brought lawyers along, instead of having a chat over a cup of coffee,” Mohammed said.
To run a successful operation in another country you must have a management mix that consists of someone local and someone from your own country. Mark Kathan, CFO at AECI, explained how they’ve used this strategy for their business operations.
“In most of the territories that we operate in, we have a local CEO or CFO and we also inject a South African professional. However, as those countries have matured, we’ve stepped away from putting South African management there and we’ve allowed the locals to run with it,” he said.
He added that no matter what geographical location you find yourself in or no matter what the legislation is, you must stick to the values of your own business. At the same time, it’s important to abide by the legislation of that country. In addition, if your practices are more stringent than the country you are expanding in, feel free to enforce those practices.
Finally, to have any kind of brand success, you need to appreciate that each country is different and what is successful in your country won’t necessarily be successful in another one. A “plug-and-play” approach doesn’t work, said the panellists. There is no brand loyalty that already exists, and the customer value proposition might completely different. Tailor your strategy to that specific region.