Saturday, July 25, 2009

"Good African Coffee"

President M7 and Mr. Andrew Rugasira , the founder and chairman of Uganda's ambitious premier Good African Coffee company, are basking in the limelight of having just inaugurated the first African coffee processing company to export finished packaged coffee to Europe and South Africa.
The company was founded in 2003 under the trade name of Rwenzori coffee; which if you oblige, is a less presumptuous company name than the current "Good African Coffee". Earnestly, what are the other African coffee producing countries going to name their products, should they opt to join the competition?
The original Rwenzori coffee company started after striking a deal with South Africa's largest supermarket chain, Shoprite, in 2004.
If Good African coffee company can break even with this venture, all the power to it. The trouble is, this is a quasi government of Uganda undertaking in which the government has invested so far, $ 995,500 of tax payer money!
President Museveni called this new processing company, a liberation of Africa from economic slavery; which, with all due respect to the president, is a euphemism for Africa's post independence leadership failures, incompetence, corruption and economic policies that discouraged entrepreneurship and foreign investment.
Good African coffee company may also find that upstart costs, marketing and advertising expenses, notwithstanding the actual competition from veteran coffee companies, prohibitive for a start up.
The fact that government is heavily invested in this company should be troubling, since governments are not for profit entities and are notoriously fraught with waste, overspending, fraud and corruption.
The biggest challenge is that successful coffee production is highly labor, capital equipment and infrastructure intensive. High scientific labor skill sets are also necessary to sustain not only a quality end product but also to maintain a competitive edge.
The video link here of Costa Rica's CooperPalmares can exemplify this challenge. Costa Rica's commitment to good quality coffee production began in 1962; an effort that has taken a half a century, vs Good African Coffee company's meager five years in business!
Competition in Western commercial goods markets is also ferocious. Its like the olympics. If your product doesn't meet customer satisfaction, its not going to make it. Uganda's "Good African Coffee company", is going to need a lot of time and luck! And knowing Africa's competitive track record at the olympics, this is going to be a long shot!
Separate ventures that Uganda entered with Denmark, Egypt and China to sell its coffee more than five years ago are collapsed.

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