Increasing consumer demand for quality dairy products continues to indicate attractive growth prospects for investors in emerging market dairy businesses. Rising incomes are underpinning growing demand for animal protein and dairy, and emerging market governments are promoting the health benefits of including dairy in the daily diet.
This report considers a number of material risk factors at emerging dairy companies, including environmental issues, food safety and animal welfare. It also assesses the emerging issue of added sugar, and which companies are best positioned to maximise the opportunity of shifting their portfolio from liquid milk to higher value dairy products.
The emerging market companies considered in the report are: China Mengniu Dairy Company Limited; Clover Industries Limited; Dutch Lady Milk Industries Berhad; Fan Milk Limited; Grupo LALA SAB de CV; Juhayna Food Industries; Parag Milk Foods Ltd; Vietnam Dairy Products Joint Stock Company (Vinamilk); and Inner Mongolia Yili Industrial Group Co Ltd (Yili).
South African energy policy is in a state of flux. The country is heavily dependent on coal, which is used for around 90% of electricity generation. Meanwhile, under the Copenhagen Accord, South Africa has pledged to reduce emissions by 34% in 2020 and 42% in 2025.
Kigoda Consulting was requested by a NGO client to assess investment trends in the energy sector. This included analysis of South African banks’ lending exposure to the power sector, and their policies on social and environmental factors, including climate change. It also included coverage of key policy and regulatory changes, such as plans to introduce a Carbon Tax, and opportunities for renewable energy projects.
South African companies are generally assumed to have a high standard of corporate governance. This report provides an analysis of previous instances of poor corporate governance in South Africa, and an assessment of companies with potential corporate governance weak spots that could represent a risk to investors. Companies considered included: Gold Fields, Pick n Pay, Exxaro, Remgro, Naspers, FirstRand and Investec.
Transparency in SA mining (2013)
Following the tragic events at Marikana in August 2012, where 34 Lonmin mineworkers were killed by the South African Police Service, questions have been raised as to whether responsible investors could have better assessed and acted on early warning signs. In light of this, Kigoda was asked to assess the extent to which mining companies are acting transparently in South Africa and identify areas of possible improvement. Three significant areas for improvement that were identified were (1) tax and revenue transparency; (2) social and labour plans; and (3) rehabilitation and closure. A lack of transparency in these areas renders effective stakeholder engagement impossible, and undermines the social licence to operate.
Fast Food’s Final Frontier: an environmental, social and governance profile (2013)
Kigoda Consulting was commissioned to undertake research into the quick service restaurant (QSR) and casual dining sector in sub-Saharan Africa, which has been described as the sector’s “final frontier”. The report identified several material ESG risks including waste management; obesity and nutrition; food safety and sustainable sourcing. Many of these are particularly acute given the poor state of physical and social infrastructure in the region. The report also considered how companies are addressing these issues, assisting responsible investors to assess the risks and opportunities facing the sector and to develop engagement strategies aimed at improving company performance.