In the first of our series looking at business Success Stories in Somaliland we review Somaliland Beverages Industries (SBi).
Back in 2010, Somaliland Beverage Industries, owned by local businessman Ahmed Osman Guelleh, was awarded a license to build & operate a Coca-Cola bottling factory in Somaliland (also covering Puntland). In fact, SBi had the franchise to Somaliland before the war (then a region of Somalia); after losing everything in the war Ahmed Guelleh and SBi won the licence back.
At the time, SBI was the country’s single biggest investment to date. The opening of the $17 million Coca-Cola production was inaugurated 22nd May 2012 by the president back then H.E. Ahmed Mohamed Mohamoud (Silaanyo). The fact that a company of the size of Coca-Cola invested millions of their own money into what was an ‘unrecognised’ country spoke volumes and underlined the solid business case.
Hear Their Story:
Though a little old (shot back in 2012) it still gives good insights to their success story.
Why We Think It is a Success Story:
- The biggest foreign direct investment (at the time) in the country’s history with an investment of close to $20m
- Undercut Imports – prior to SBi, Coca Cola fizzy drink products were imported in masses from neighbouring Yemen via multiple spot traders. Somaliland is a very price sensitive market so the fact that SBi undercut imported Coca Cola goods (by around 40%) underpinned their success.
- Why import if we can produce more efficiently locally? This should be a mantra adopted across everything really.
- Found the Right Location – the capital city of Somaliland (Hargeisa) suffers from a chronic shortage of water so finding the right location for the plant was no easy task. SBI found and secured its water supply after drilling for six months across 200 sites
- Recruited overseas technical/operations staff – by tapping into skills from diaspora SBi were able to entice highly skilled personnel to come to Somaliland who could then train local workers
- Brought in local graduates from local colleges/universities – in our view this is a very important thing on a number of fronts. Newly created jobs not only provide a chance for these local graduates to build a sustainable career, but it gives hope to thousands of other students right across the country.
- Expanded range of products – since opening with Coca Cola brand fizzy drinks, SBi have since expanded to mineral water with their flagship brand Dasani now arguably the #1 brand in Somaliland. SBi also opened a water bottling plant in Burao (Somaliland’s 2nd largest city in the Togdheer region) – once again generating new job opportunities.
• Imported almost everything – other than a few items almost everything in the plant was imported and sourcing everything couldn’t have been an easy feat.
• Proved Sceptics Wrong – as mentioned in the video, there were many doubters who thought that a venture of this scale would not succeed so the fact that the owners proved them wrong is a good thing for sure.
Hopefully in the near future we’ll do a follow up interview with the owners and get a more updated view of things (since the last video was in 2012). There will undoubtedly be many learnings from this successful business that others can benefit from.