Establishing a Locally Rooted Business Network Covering 54 Countries
Toyota Tsusho’s ties to Africa trace back almost a century, beginning with its importation of raw cotton in 1922. In the 1960s, we started our automobile business in Africa, expanding our automotive value chain from CBU exports and dealers business to include captive financing and leasing, used vehicle sales, and small-scale local production. We have also raised our presence in areas outside of automobiles, primarily in eastern and southern Africa, such as the power plant-related business in Egypt, a geothermal power plant construction project and local production and sales of blended fertilizer in Kenya.
In 2012, we took a stake in CFAO (converted into a wholly owned subsidiary in 2016), which was, at the time, France’s largest trading company dedicated to business in Africa. CFAO, which primarily did business in northwest Africa, and Toyota Tsusho, which primarily did business in southeast Africa, complemented each other geographically, and due to the high affinity of the two companies’ business strategies, we were able to combine their business networks and experience, further solidifying the companies’ robust business foundation for all of Africa.
Striving for Medium- and Long-term Development Led by the Africa Division
Africa is a continent with tremendous capacity and potential. It has been called the final frontier. This is due in part to its rapidly expanding middle class and its growing and youthful population.While there are African countries that struggle with political instability, deficits, and tribal con"icts, in recent years the foundation of democracy has made progress overall, and stable economic growth is now expected. Another reason that the world’s attention is turning to Africa is that its population is growing repidly, and it has high potential as a commercial market due to rising consumption by the middle class.
Given this background, Toyota Tsusho, which is engaging in business in Africa with a medium- and long-term perspective, established the Africa Division in April 2017 to integrate its Africa-related business. It is made up of four strategic business units(SBUs): the Mobility SBU, which is developing business by leveraging a sales network covering the entire continent; the Healthcare SBU, which aims to expand business based on CFAO’s 70-year track record in pharmaceutical wholesaling in Africa; the Consumer Goods SBU, which is engaged in local production and retailing of consumer goods such as beverages and ballpoint pens; and the Technology & Energy SBU, which is promoting renewable energy and the harbor development business. The division has unified the chain of command involved in strategies and investment, with the aim of optimizing all business in Africa.
- *SBU：Strategic Business Unit
The “WITH AFRICA FOR AFRICA” Philosophy that Serves as the Foundation of Our Business
Toyota Tsusho’s Africa business is based on the philosophy of “WITH AFRICA FOR AFRICA.” For example, all businesses launched in Africa are based on the philosophy of “WITH AFRICA.” That is, their ideals are to have leadership provided by people from Africa and to operate businesses based on the wealth of know-how and experience locally accumulated over the decades. Furthermore, decisions on whether to launch new businesses include a “FOR AFRICA” perspective, considering whether the businesses have the potential to help resolve local social issues. These businesses provide long-term support for regional economic development and the enrichment of peoples’ lives. The “WITH AFRICA FOR AFRICA” philosophy has already thoroughly permeated businesses that are in progress. We present several examples here.
Examples of the “WITH AFRICA FOR AFRICA” philosophy in action
Contributing to industrialization through local production and MaaS (Mobility SBU)
One of the strengths of our automotive business is that we have built a sales network that extends across Africa and deals with multiple brands. In this business segment, we are focusing on promotion of the small-scale complete knock-down (CKD) production business and the local procurement of automotive parts, contributing to the vitalization of the local production industry requested by local governments.
Furthermore, in order to spread the use of Mobility as a Service, or MaaS, which is drawing increasing attention as a new service model, we are engaged in funding and collaborations such as logistics matching services in Kenya, the bike taxi business in Mali, and the car-sharing business in Rwanda. We are supporting the development of automobile-centric industry.
Healthcare business supporting the medical field in Africa (Healthcare SBU)
Our healthcare business, which includes pharmaceutical production and wholesaling, is one with a long history under CFAO. We operate our healthcare business in 24 countries in Africa. We offer approximately 27,000 kinds of products, and deliver them daily to roughly 6,000 pharmacies and hospitals. Local staff handles pharmaceutical shipping, storage, inventory management, and the like. In Algeria and Morocco, licensed manufacturing of pharmaceuticals is also performed locally. We are considering the same type of manufacturing of pharmaceuticals in Sub-Saharan Africa as well.
Supporting small-lot production through a multi-purpose plant (Consumer Goods SBU)
In our consumer goods business, we manufacture consumer goods such as cosmetics, beer, and ballpoint pens, as well as operate shopping malls. Our beer production plant in Côte d’Ivoire is notable for producing both global brand products and local brand products. Additionally, Toyota Tsusho applied the technopark concept to construct a multi-purpose plant that enables partners to profit even with small-lot production.
Encouraging industrial development through energy development (Technology & Energy SBU)
In our technology and energy business, we are focusing on renewable energy (wind, solar, geothermal, and other power) and developing new projects that leverage the potential of African countries and the strengths of our partners. The geothermal power generation project in Kenya, the solar power generation project in Nigeria, and the wind power projects in Egypt and eight southeast African countries all serve as sources of the energy that is essential for domestic industry to "ourish. Toyota Tsusho is also searching for areas with latent power generation potential and proposing power projects in order to promote local energy self-sufficiency.
Active Promotion of Local Personnel
In our Africa business, we also re"ect the “WITH AFRICA FOR AFRICA” philosophy in our human resources, striving to create a management structure with personnel from Africa at its core. Locally, compensation are based on performance in relation to defined KPIs, and we have introduced fair, highly transparent performance management systems. Furthermore, we believe that the development of middle management is essential to the implementation of our medium- and long-term strategies, so we strengthen personnel development through our next-generation leader development program and regional job rotations.
Collaboration with Locally Capitalized Company
As part of its Broad-Based Black Economic Empowerment (B-BBEE) program, the Republic of South Africa is appealing to foreign enterprises to strengthen partnerships with black-owned companies in the country. Our local operation site, Toyota Tsusho Africa (TTAF), received 25.1% financing from black-owned investment company Kapela Holdings as a business partner in April 2019, thereby gaining certification as a B-BBEE Level 1 contributor in 2023, and has a management system in line with South Africa’s national economic policy. Furthermore, TTAF is developing the technical skills of employees, implements procurement from BEE-compliant businesses, and strives to support the local community.
Moving forward, TTAF will continue to strengthen relationships with local companies, through investment and by contributing to the creation of employment opportunities, to benefit South Africa’s economic growth.
Firmly Establishing the Toyota Group’s Corporate Culture
We have introduced kaizen and safety activities, essential elements of the Toyota Group’s corporate culture, in the operation sites of all 166 companies active in Africa.
Our kaizen activities start with thorough implementation of “the two Ss” (sorting and setting in order). By establishing a kaizen mentality and kaizen processes, we aim to enhance operation efficiency and improve worksite productivity. In our safety promotion activities, we conduct risk assessments at logistics centers and production sites and provide safety education and training to all staff members.
Providing Educational Opportunities through SDGs
In 2014, Toyota Tsusho established the Toyota Kenya Academy in Nairobi, Kenya. The academy is a continuing education center open to the local community, offering technical training in automobiles, construction and agricultural machinery, as well as leadership training. In Mauritius, as well, we established a social contribution-oriented venture development fund (Toyota Tsusho CSV Africa Pte. Ltd) in 2014, through which we are contributing to the development of local start-ups and ventures. Our continuing education provides support in the capability development field while our venture development provides support in the technological innovation field, with both efforts aligning with the United Nations’ Sustainable Development Goals (SDGs) .