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23 July 2010 | By: Mohamed Hairul Borhan
 Leona Lee, General Manager, Sinba-Link Pte Ltd, explains to Mohamed Hairul Borhan why she decided to turn her back on China and India to focus on Africa
In the late 1990s, when the whole world was looking to expand into China and India, Leona Lee did the unthinkable. Not only did she ignored the two rising economic powers, she decided to set up her company, Sinba-Link Pte Ltd, to do business in one of the poorest countries in the world, Ethiopia.
She sensed that her company, which provides basic FMCG products at an affordable price, would be able to capitalise on the ready-made market in the country. Working together with reliable manufacturers, Ms Lee has since solidified her company’s presence in the continent and has now expanded her business into other parts of Africa.
When did you enter Africa and which markets are you currently in?
My company ventured into Africa in 1997. We started out in one of the poorest countries in the world, Ethiopia. That was my main market then. Gradually, we expanded into Western Africa, Northern Africa as well as Southern Africa.
I’m sure people have asked you this before. Why Africa and not Asia or even Europe?
I felt that the whole world was doing business in Asia so I wanted to build my brand somewhere where it is tough but less competitive. I have no regrets about going into Africa although I have learnt many tough lessons.
Can you elaborate on such a lesson?
We had an incident in Liberia. At that time, Charles Taylor was the president. Opposition to his regime grew culminating in the outbreak of a civil war.
My customer had to flee the country for safety. He advised us to ship back the goods which had just arrived at Monrovia.
Unfortunately, vessels stopped calling at the port due to the chaos. Like many others, our containers were looted. Unable to recover our losses from the insurance company, we had to take the losses and move on.
The example you gave might scare some Singapore companies that are not used to such issues when doing business. Do you think that Singapore companies are ready to venture into Africa?
You would need a lot of patience, resilience and tenacity because you are going to encounter a lot of problems. You would really need to persevere to solve your problems. The worst thing is that we [Singapore] do not have diplomatic links with most of the [African] countries. You are really on your own and you have to find your own way out. You really need to depend a lot on your local partners and on your relationships with your network of contacts built over the years to help you out there.
Is it difficult to find good local partners and what is the best mode of entry into the continent?
There are many African companies who are willing to do business with you. You really have to pick a partner who is reliable and has a setup which complements your business.
As for the best mode of entry, it really depends on the type of business you are in. We depend on distributors for our range of products. If you are investing in the country, you would need local partners who are competent to assist you.
Most of the African countries have very fluid laws. They change all the time as they are still learning and evolving.
Can you elaborate further on this?
You may ship some cargo to a country with all the required documentations in place only to find out that more documents are required to comply with a new law which is effective retrospectively. Compliance is a challenge sometimes.
Is corruption prevalent in Africa?
We don’t want to get involved but we frequently hear from our distributors that they sometimes have to pay money to get the cargo out from the customs. The customs may find fault with the products even though we have all the documents in place.
Is the amount of potential in the continent worth going through all the barriers of entry? Is now the right time to venture into Africa?
I feel that Africa is the last frontier. If you look at the whole world, everywhere is already so developed. Africa’s population base is huge and is relatively undeveloped compared to the rest of the world. So, even though it is tough, I think it is good to put your foot there in view of the future potential and development.
Any words of advice to Singapore companies planning to venture to Africa?
You got to be really careful with who you are dealing with and always be prepared to cut losses when a deal turns bad. You need to have a contingency plan and you must be able to stomach some risks. |
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