Unilever CI: Food & beverages

The Company

Unilever CI is the leading manufacturer of household cleaning products, personal and dental hygiene, and food products in Côte d’Ivoire. In December 2008 Unilever CI divested its oil activity to SIFCA Group and acquired Cosmivoire’s (SIFCA Group) soap activities to refocus its business portfolio on the production and distribution of soaps, detergent and cosmetics products – which it distributes to the eight West Africa Economic and Monetary Union states.

The consumer products market in Côte d’Ivoire is highly competitive, with other brands coming from Europe, Asia and India, as well as local names. Unilever CI strongly competes with Danone, L’Oréal, Sipro-Chim, and Africa West Industries. Unilever CI has two major distribution channels – one modern and one traditional. The modern circuit is based on supermarkets, hypermarkets, wholesale, semi-wholesale and discount, and comprises industrial-distributors, wholesalers, semi-wholesalers and retailers. The channel is dominated by Prosuma, Compagnie de Distribution de Côte d'Ivoire and Société de Distribution de Toutes Marchandise, which account for 45% of sales.

Meanwhile, the traditional circuit is made up of customers that buy and resell products with the Unilever CI trademark. This circuit includes independent wholesalers, large distribution companies and retailers, which contribute the remaining 55% of sales.

In 2013 Unilever CI’s turnover fell 19.9% year-onyear (y-o-y) from CFA73.37bn (€110.1m) to CFA58.8bn (€88.2m), due to supply problems with the Lifebuoy brand; a lack of promotion of the Lux and Rexona brands; greater competition for household soaps; and quality issues with its Omo powder detergent. Unilever CI’s sales consist of 60% local sales and 40% exports.

The local market is dependent on the sale of soaps, which represent 59% of total sales, as well as detergents, margarine and mayonnaise, which together account for 25.34%. Local sales volumes were down 20% y-o-y to 31,903 tonnes in 2013, while export OUTLOOK: Unilever CI continued its downward trend in the first half of 2014 with CFA5.6bn (€8.4m) in losses due to a 5.36% y-o-y drop in sales to CFA30.6bn (€45.9m). The result was further affected by accounting operations stemming from the closure of its toothpaste plant and the transfer of the washing powder production plant, on the order of CFA1.12bn (€1.67m) and CFA2.97bn (€4.19m), respectively, for a total impact of CFA4.14bn (€6.21m).

Unilever’s average sustainable share value from the various valuation methods used is forecast at CFA59,000 (€88.50) in 2016, compared to the current price of CFA39,000 (€58.50). This represents potential growth of 51.28% in a 24-month investment period. Given the negative results of late, Unilever CI did not distribute dividends in 2009, 2010, 2012 or 2013; however, the company is forecast to recommence dividend distribution at the end of 2016.

Development Strategy

Management has a range of priorities through 2020, including doubling the size of the business; reducing its environmental footprint; increasing its positive social impact; and improving profitability. The focus will be placed on eight points in order to achieve these priorities:

• The return of the managing director in Côte d’Ivoire, who has been in Ghana since the Ivorian crisis;
• A new brand-building manager, with the goal of increasing brand positioning in the local market;
• The arrival of a customer development manager, who will mainly be focused on the export market;
• Increase consumption through marketing;
• Improve distribution systems in local and export markets;
• Product variety and quality at competitive prices;
• Introduce new products to the market; and
• Combat counterfeiting through a partnership with Ivorian Customs.

The sound application of the above strategies should help Unilever considerably increase its level of sales and allow it to recapture its previous market share.