During a panel session titled ‘How to Manage Inflation without Alienating Customers’ at the 2023 Africa CEO Forum in Abidjan, Cote d’Ivoire, Farouk Gumel, Executive Director and Vice Chairman, Africa, TGI Group, shared valuable insights about the challenges manufacturers face when it comes to costs and the importance of finding innovative solutions.
Gumel acknowledged the inevitability of passing some costs to consumers but stressed the need for manufacturers to think creatively to reduce production expenses while ensuring their products remain affordable.
He emphasized that these efforts are essential for the long-term sustainability of businesses.
“In the diverse landscape of Africa, cost considerations can be complex,” explained Gumel. “The balance between inclusion and efficiency is unique due to the division between urban and rural centres. For us to foster an inclusive economy, we must focus on creating opportunities where unskilled labour can be engaged. This means a certain level of operational inefficiency may be required, but it pays back as community engagement ultimately guarantees the safety and security of investments.”
Gumel highlighted various strategies companies can adopt to lower production costs without compromising product quality. “Examining packaging, optimizing product quality, and streamlining distribution costs are all areas ripe for cost reduction. We regularly assess our packaging choices at TGI, considering factors such as ink type, colour selection, and raw materials. We evaluate where and how to advertise based on our target consumers – should we go digital, opt for print, TV, or radio?”
He emphasized the importance of quality products, noting that they enhance brand affinity. “When your product carries a story and positively impacts the job market, consumers naturally gravitate towards it,” said Gumel.
Regarding TGI’s approach, Gumel highlighted their collaboration with development agencies to optimize resources. “We work closely with partners who provide grants and training, helping us improve while managing our production and distribution costs. While some cost increases are inevitable, careful control can significantly mitigate their impact.”
Gumel’s insightful remarks underscore the delicate balance that African manufacturers must strike to navigate the challenges of inflation and consumer affordability. His experience and commitment to innovative cost management inspire the industry, showcasing the potential for growth while maintaining product quality and affordability.
Tropical General Investments (TGI) Group is a global conglomerate with most of its investments in emerging markets. TGI’s investments focus on driving inclusivity and value addition using locally sourced raw materials, state-of-the-art manufacturing facilities and a highly skilled workforce to produce world-class products consumed locally and exported to global markets.
TGI Group is the parent company of WACOT Rice, CORMART, and CHI Farms, among others.
