Sailing with Africa's Wind

A few months ago, Sir Roy Welensky, the Central African Federation's Prime Minister, looked with considerable gloom at a crucial aspect of the African economy. "Let's face it," he said, "as an investment, Africa stinks." Reporting to his stockholders recently, a sober London businessman who presides over the biggest foreign enterprise in Africa took a more optimistic tack. "The African outlook," said Unilever Chairman George J. Cole, "is less dark than one might think.''

Cole's cautious optimism was a prime example of British understatement. Through its wholly owned subsidiary, the United Africa Co., giant Unilever has staked $373 million--nearly one-quarter of its total investment--on Africa. An empire in its own right, the United Africa Co. operates in 29 African countries, sells more than 4,000 items, ranging from "mammy cloths" (cotton prints) to bulldozers. It runs an assembly plant for General Motors in Nigeria, has its own fleet of river boats, and tends more than 418,000 acres of palm-tree plantation. In 1960, despite Africa's political travail. United Africa had its best year, boosted its sales to $616 million, an increase of $53 million over 1959.

A Firm Foundation. United Africa has prospered primarily by knowing what Africans aspire to both economically and politically. Convinced that the African standard of living was bound to rise dramatically, the company began opening its giant Kingsway supermarkets and department stores in major West African cities as early as 1948, has gradually stocked them with a dazzling array of the latest Western products, from television sets to trousseaux. To help introduce Africans to these new luxuries, the Kingsway stores have used style shows and appetite-whetting advertising on the delights of modern living. As one measure of their success, United Africa executives cite the brisk sales of "ladies' foundation garments," an item that once would have interested few African women.

The company has also won favor by its longstanding commitment to racial equality. Even before World War II, United Africa began moving Africans into executive posts; today, virtually all the managers of United Africa stores are African. In Ghana and Nigeria, Africans sit on the company's local board of directors. To train its African executives, who are paid on the same salary scale as Europeans, United Africa sends them to company schools--the newest of which, a $500,000 management center, opened last week in the Nigerian capital of Lagos.

The Strength of Size. As the African states have emerged to independence, United Africa has actively sought ways to cooperate with their new nationalism. To avoid charges that it smothers native enterprise, the company has begun to cut back on its retail operations and expand its role as a wholesale supplier to African retailers. Getting in on the drive toward local industrialization, United Africa has invested, almost always as a minority stockholder, in African plants producing everything from cement to cosmetics. In Ghana, when the government decided to take over the buying and selling of palm products, United Africa willingly gave up the business--and became the government's agent.

United Africa has not emerged everywhere unscathed. Its profits in Kenya are still off from pre-Mau Mau days; its immense plantation operation in the Congo slipped $364,000 into the red last year (though its Congolese margarine and trading companies turned modest profits). In Guinea, United Africa's business was brought to a halt a year ago when Marxist-inclined President Sekou Toure set up a government trading agency. But Toure's recent concession that Guinea's economy has room for private companies, too, has sparked the company's hopes of resuming operations. "Size is not a bad thing in Africa," muses a company executive. "Without it, we could not have held a toe hold in Guinea."

Grand Strategy. As a Unilever subsidiary, United Africa has its own chairman, burly, blunt Arthur H. Smith, 56, who bosses the company's week-to-week operations. .But Unilever's Cole, himself a veteran of 38 years of African business experience, still makes the long-range financial decisions and has the final word on United Africa's grand strategy. His own explanation of United Africa's success: "When there's a change of wind, it simply means you alter your sails. If you do it right, you may even sail faster."

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