MNP3703 Assignment 1 (COMPLETE ANSWERS) Semester 1 2025 - DUE 10 April 2025

Case study Supplier Relationship Management in Unilever’s African Operations Introduction Unilever is a multinational consumer goods organisation with a long history of global expansion and adaptation. The organisation was formed in 1929 through the merger of the Netherlands-based Margarine Unie and the United Kingdom-based Lever Brothers. Over the decades, Unilever has expanded its product offerings across food, personal care and household products, becoming one of the world’s largest manufacturers in the consumer goods sector. Unilever’s entry into the African market Unilever has a strong presence in Africa, operating in 41 countries and serving approximately 600 million consumers. Unilever first entered South Africa through the importation of its products in the early 1900s, specifically starting with Sunlight soap, which quickly gained popularity due to its cleaning efficiency and affordability. This initial success marked the beginning of Unilever's presence in the region and paved the way for the expansion of its product range and brand portfolio throughout South Africa and the broader African market. The organisation employs over 40,000 people across the continent, with a significant footprint in South Africa, where it employs more than 3,500 individuals. Unilever first entered Africa through acquisitions and local partnerships, leveraging its global expertise to adapt products to the unique needs of African consumers. Today, Unilever’s African market is vital for its global strategy. Unilever’s supplier network in Africa Unilever purchases a wide range of raw materials from Africa, including agricultural products, packaging materials and essential oils. These suppliers span multiple African countries, contributing to Unilever’s supply chain resilience and economic development within the region. Below are key suppliers and the countries they operate in: Nigeria - Psaltry International supplies Sorbitol and cassava starch that are used for food and personal care product manufacturing. Unilever shifted to purchasing sorbitol locally in Nigeria to reduce dependence on Asian imports, supporting local farmers and industries. Ghana - Benso Oil Palm Plantation (BOPP) and Serendipalm supply palm oil that is used for food and personal care products, for example soaps and margarine. Unilever has increased its investment in sustainable palm oil purchasing in Ghana to ensure ethical and environmentally responsible production. Kenya - Sasini PLC and KTDA (Kenya Tea Development Agency) harvest and supply tea used in several forms, but Lipton tea remains a favourite Unilever tea product. Unilever has long-term partnerships with several tea farmers in Kenya, emphasising sustainability and fair trade practices. South Africa - Nampak and Mpact supply packaging materials, specifically cartons, plastic bottles and biodegradable packaging, which is used for packaging food and household products. Unilever collaborates with local packaging manufacturers to promote recyclable and eco-friendly packaging. Ivory Coast - Cargill and Barry Callebaut supply cocoa that is used in ice cream and confectionery products. Unilever purchases cocoa from ethical suppliers in Ivory Coast, ensuring compliance with fair labour and sustainability standards. Economic impact of Unilever’s supplier strategy in South Africa According to a report by Kapstein (2025), Unilever plays a significant role in South Africa’s economy. The report highlights the following key findings (Kapstein,2025:43): • Unilever directly and indirectly supports over 100,000 jobs in South Africa through its supply chain and retail networks. • The organisation’s operations contribute approximately 1% to South Africa’s GDP, making it a key player in the national economy. • Unilever actively works with and develops small and medium-sized enterprises (SMEs) to strengthen local purchasing, ensuring more inclusive economic growth. • The organisation has increased investments in waste reduction, energy efficiency and sustainable purchasing to align with South Africa’s environmental and economic goals. Growth and changes in African supplier sourcing An article by Reuters (Sanni & Naidu, 2023), reports that Unilever is increasing its reliance on African suppliers to moderate currency fluctuations and supply chain disruptions. The organisation is shifting away from purchasing inputs in Asia due to the high volatility of foreign exchange rates and the rising cost of imported materials. The report also states that Unilever is expanding local procurement of sorbitol and spices from African suppliers, including Nigeria and Ghana, to reduce dependency on India and China. Unilever runs initiatives to support smallholder farmers and local suppliers, providing training on sustainable agricultural practices and entrepreneurship development. This aligns with Unilever’s broader strategy to strengthen African manufacturing capabilities and improve the sustainability of its supply chain. Procurement Magazine (Collins, 2023) echoes that Unilever is intensifying its shift to African suppliers due to rising global supply chain disruptions. The organisation specifically aims to reduce costs associated with international shipping and currency fluctuations by leveraging Africa’s growing manufacturing sector. The move also fosters greater self-sufficiency and economic empowerment across African markets. Other multinational organisations like Nestlé and Danone are now following Unilever’s lead by expanding their supplier base within Africa, strengthening the continent’s role in the global supply chain. Conclusion Unilever’s supplier relationship management in Africa is a strategic approach to enhancing local purchasing, economic growth and supply chain strength. By partnering with African suppliers, Unilever is fostering sustainable business practices, supporting local industries and mitigating global supply chain risks. The organisation’s commitment to African suppliers not only strengthens its operational stability, but also contributes to broader industrial and economic development across the continent. Assessment questions: