Nestle to reduce its presence in Africa

Global food giant Nestle will reduce its business in Africa after concluding that consumption of its products in the region by shrinking middle income groups was "extremely small" and "not really growing."

The company's chief executive for equatorial Africa region Cornel Krummenacher told the Financial Times that profits in the region did not meet initial forecasts set in 2008, when Nestle started to expand its presence in the continent.

Krummernacher echoed a 2014 survey from Standard Bank, which showed that the continent's middle income group amounted 15 million people in 11 countries, well down from 330 million that a 2011 survey carried out by the African Development Bank found.

Nestle announced a 15% headline reduction of its presence in the region, that suffers from poor infrastructure, corruption, frequent natural disasters, civil unrest and currency depreciation, which makes conducting business difficult.

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Nestle had to close its offices in Rwanda and Uganda, and is reducing its product line by half, given the difficulties of local markets dominated by family businesses and local know-how

Since 2005, the food giant has invested nearly $1bn in the region, building new factories with an aim to double its market size every three years.

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