SBI sets pace for industrialization in unrecognized Somaliland

As Somaliland celebrated its 28^th year since parting ways with Somalia recently, President Muse Bihi has invited corporate companies worldwide to invest in the country.

One company that has maintained its confidence in Somaliland is Coca Cola.

Built 40 kilometers from the capital Hargeisa in Jalelo, the Coca Cola Company has offered employment not only to locals but also expatriates who offer the much needed technical assistance and knowhow in production and management.

Coca-Cola Co. opened the US$15 million bottling plant in Somaliland as part of a plan to win more African consumers by investing $12 billion in the continent by 2020.

Ahmed Guelleh, the chairman of Somaliland Beverage, says the plant has helped the breakaway enclave to build a manufacturing capacity.

“We can actually see life in this town. Our sons and daughters now have some income thanks to the construction of this company,” said Abdihalik Mohammed who has played a role in rebuilding Somaliland after the 1990 attack by the then Somali ruler Siad Barre.  

Coca Cola and Somaliland Beverages Industries (SBI) remains the biggest foreign direct investment (at the time) in the country’s history.

Prior to SBi, Coca Cola fizzy drink products were imported in masses from neighbouring Yemen.

Somaliland is a price sensitive market so the fact that SBi undercut imported Coca Cola goods (by around 40%) underpinned their success.

The company found the right location at the capital city of Somaliland Hargeisa which suffers from a chronic shortage of water. SBI found and secured its water supply after drilling for six months across 200 sites.

Creating jobs

SBI recruited overseas technical/operations staff – by tapping into skills from diaspora it was able to entice highly skilled personnel to come to Somaliland who could then train local workers.

The company also brought in 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.

It has expanded range of products. Since opening with Coca Cola brand fizzy drinks, SBI have since expanded to mineral water with their flagship brand Dasani.

SBI also opened a water bottling plant in Burao (Somaliland’s 2nd largest city in the Togdheer region) – once again generating new job opportunities.

Jacob Obiero, a Kenyan took what he terms as a tough decision to relocate here to Somaliland and head it. Obiero is the technical head of the SBI Company in Somaliland.

“At first, I was very skeptical about coming to Somaliland. My fear was this is a country at war but I was shocked when I arrived here,” says Obiero.

Obiero says he loves the place and the many opportunities in different sectors found in Somaliland not only in the manufacturing but also in telecommunication where companies like Somtel and Telesom have carved a niche.

  “SBI has opened the construction industry in this country. We are now seeing other companies coming up. The rebuilding of the port of Berbera is another big story in this country,” says Obiero.

The company has created job opportunities for the local community states Obiero adding that this has transformed the lives of the hitherto poor locals.

The community has benefitted in form of employment in capability development –90% is locals, which has transformed the people,” he observes. 

For the community members here, the factories have opened up opportunities they would not have got.

One of the locals is Abdirahman Ibrahim, the production manager who was lucky to be selected in the village by the company to go and study in Malaysia. He came back and was offered a job, and with time has risen to the ranks to become the

Somaliland is an independent state but internationally still not recognized.

Other social benefits

Despite current little international recognition in the past 28 years, Somaliland operates with its own currency and government system.

Coca-Cola has at the same time provided clean water for 50,000 Internally Displaced People in Somaliland

Just six kilometres southwest of Hargeisa, lies Ayaha. Here, more than 50,000 Internally Displaced Persons (IDP) and refugees live in makeshift, destitute squalor. The area is divided into four quarters: Ayaha I, II, III and IV.

In spite of extensive support from the local municipality and several international and local development agencies, there is no water supply system in place. This is not unusual in Somaliland, where most urban centers suffer chronic water shortages and where the local water agencies rarely meet demand. Much of the population, living in impoverished and peripheral areas, has to buy water from water trucks at exorbitant prices.

Now, things are looking up for the people of Ayaha – thanks to a partnership between the Hargeisa Water Agency (HWA), the Somaliland Ministry of Water Resources, The Coca-Cola Africa Foundation, the European Union, UNICEF, Somaliland Beverage Industries (SBI) and Terre Solidali. A low-cost, efficient and safe water storage and distribution system has been installed, featuring water-vending kiosks, helping for the very first time to secure Ayaha’s essential human right of clean drinking water.

The water is sold through three kiosks that RAIN has funded. The kiosks are connected to a centrally located reservoir which is connected to an aquifer six kilometres away. The first phase of the project reached Ayaha III, with future projects aiming to extend coverage to Ayaha I, II and IV.

The local water agency, the HWA, manages the project and its operations. Operating the kiosks themselves provides another bonus to the community, as well: critical jobs, which in many cases are being filled by eager and capable women.

“We never used to get enough water because it was very expensive,” said Safia Yusuf Isse, one of the kiosk operators. “This new kiosk will have a huge impact.  As mothers, we only used to get water from the tankers if we had large tanks of our own.  Now, we can get the water we need at a price we can afford.”

“This kind of victory for Ayaha didn’t come easily. The entire project owes its success to an “extremely engaged network of partners,” notes Monica Ellis, CEO of GETF. “From the Hargeisa Water Agency to Terre Solidali [the implementing partner] to SBI, each organization has come together with their unique strengths to make a positive difference for the people of Ayaha.”

By Odindo Ayieko

Originally published in Busiweek 27/5/2019