KENT: We’ve trained women to run project that helps connect with the locals

Coca-Cola chairman and CEO Muhtar Kent. PHOTO | COURTESY 

By Berna Namata

In Summary

Bio

• Current position: From 2009, chairman of the board and chief executive of the Coca-Cola Company.
• Employment history
  1978: Joined Coca-Cola Company in Atlanta.
  1985: General manager of Coca-Cola Turkey and Central Asia.
  1989: President of the company’s East Central Europe division and senior vice president of Coca-Cola International.
  1995: Managing director of Coca-Cola Amatil-Europe
  1999: President and CEO of the Efes Beverage Group, a diversified beverage company with Coca-Cola and beer operations across Southeast Europe, Turkey and Central Asia.
  2005: President and chief operating officer, Coca-Cola Company’s North Asia, Eurasia and Middle East Group
  Less than a year later, he became president of Coca-Cola International, leading all of the Company’s operations outside North America.
• Education:
  Bachelor of Science in Economics, University of Hull in England; Master of Science in Administrative Sciences, City University London.
• Others: Chairman, International Business Council of the World Economic Forum; Co-chair of the Bipartisan Policy Centre’s CEO Council on Health and Innovation; a fellow of the Foreign Policy Association; member of the Eminent Persons Group for ASEAN; chairman emeritus of the US ASEAN Business Council;
  Serves on the boards of 3M, Special Olympics International, Ronald McDonald House Charities, Catalyst and Emory University.

The chairman and CEO of Coca-Cola, Muhtar Kent spoke to Berna Namata, about the Ekocentre initiative and its business strategy across Africa.

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How are you repositioning your operations to tap into the African market?

We have an important regional business based in Nairobi , very large and growing business. We have another one in the south of Africa: we have two business units with a lot of talented people across Africa and excited about the future of the investment.

We have doubled the investment for the period 2010-2020. This investment will go towards more brand communication, factories, distribution, collaboration with farmers for fruit juice and more employment.

What is the strategic thinking behind Ekocentre sustainable entrepreneurship project?

We have 127 Ekocentres around Africa, and they serve as a powerful way for us to connect with local communities. Ekocentres are both community centres and general stores, and they can bring tremendous benefits in supporting the economic and social progress of African communities.

For example, clean water is such an important resource and there are so many children that die because of lack of access to clean water in Africa. We feel that we have a unique opportunity to use our knowledge of water and our convening power, to help address this challenge through the Ekocentre model as we can see here in Ruhunda along with our partner Pentair.

We also have an initiative called 5by20 that will enable the economic empowerment of five million women entrepreneurs across our company’s global value chain by 2020. We train women to run these Ekocentre kiosks, where they sell many consumer goods and not just our products. It is good for the business and the community because when women get empowered communities get stronger.

We decided that there is an opportunity to make this even more powerful by bringing in specialist partners who are experts in medicine, connectivity (solar power) as well as sports activities such as football. This helps us achieve a completely holistic community service approach.

I’m a big believer in leveraging partnerships using the convening power of Coca-Cola and making communities stronger because it will mean we will have a stronger business.

Is there a business case for this kind of work?

There is a huge business case based on the following: First, you have to focus your efforts; it is not simply giving back (to the communities), think of it as creating value for all your stakeholders, including your shareowners. When you create value for all your stakeholders, what you do is you optimise the value for shareowners.

The stakeholders include employees — we have over 70,000 employees throughout the continent and we depend on hundreds of thousands of more people each day who form our local supply-chain. You start by creating value for your employees, bottling partners, retailers, NGO partners and the governments that host you and your shareholders.

We have initiatives in important areas, including women, water and well-being and we are also focused on ensuring our own operations are more sustainable. For example, when we recycle our bottles we create value from waste while the costs go down — everything is connected

You cannot maintain charity forever but you can maintain stakeholder value creation when you have the model right. This is part of the business model.

How do you ensure that such initiatives are sustainable in the long term?

From our 5by20 programme, we have economically empowered over 1.2 million women around the world, with over half this number in Africa.

We have 24 million retailers in the world; with the 5by20 initiative, we are going to add two million retailers. These women who now make much money as a result of the training they got from us, the micro-credit we gave them, they will be loyal to us.

Creating loyal huge retailers is a huge benefit for us. We believe that ensuring sustainability initiatives brings value to business as well as communities is essential.

What do you regard as the key operating challenge in Africa today?

I think infrastructure is a major challenge; roads to allow us to distribute our products freely, getting the last mile, is very challenging in Africa.

Communication and travel is challenging: the basic infrastructure. I don’t know any country in the world that is going to become middle income without huge massive investment in infrastructure including roads, airports and communication.

Africa currently accounts for just 1.9 per cent of global manufacturing, yet the continent must industrialise to reduce its susceptibility to volatile commodity prices.

What will it take?

African governments need to create free trade zones in the country, where you get appropriate tax incentives for investment and tax incentives for export as well as ease customs procedures for manufacturing companies.

If these things are done, manufacturing will take off because today you have a situation where in China the cost of labour is going up, Asia the cost of labour is going up, in Latin America the cost of labour has gone up and you only have Africa left that can attract investment now but it has to be developed in the right way, there is a huge potential.