Like agriculture and textiles, the cosmetics sector in Namibia is largely driven by women. Namibia’s cosmetic industry is probably one of the fastest growing in the country at the moment after the intervention of the Ministry of Industrialization, Trade and SME Development’s targeted ‘Industry Growth Programme’ launched in 2016, which prioritized 10 potential sectors for support. Namibia is home to abundant indigenous plants and trees where the by-products are mostly organic oils which have become highly sought after in the domestic and international markets. This means the cosmetics sector presents opportunities for women to increase their participation in the economy, drive trade, and create new jobs.

Some of the famous and highly demanded organic oils found in Namibia include !Nara oil from the !Nara plant, Marula Oil from the fruit nut of the Marula tree, Ximenia oil, and eembeke oil. All of these oils are used as active ingredients in the manufacturing of various cosmetics products. If one looks at how the value chain of the cosmetics sector is set up in Namibia, women are participating from production and manufacturing to marketing and sales. The harvesting of Marula nuts, for example, provides income to about 6 000 people in rural communities, of which 90% are women.

Production and trade

The plants from which the active ingredients are extracted have their origin in local communities. The resources are naturally spread around the country, allowing diverse products to be developed and ultimately increasing diversity when it comes to female participation.

Multinational cosmetics company ‘The Body Shop’ is sourcing pressed Marula oil from a Women’s Cooperative based in the northern part of Namibia. Women are involved in the harvesting of the Marula nuts and the extraction of the white kernel which is then pressed into oil. The cooperative is also involved in the packaging and selling of the oil under their own brand as a way to diversify their source of income. Cosmetics manufacturers can therefore source Marula oil as an active ingredient in the production of various cosmetics. The current production of Marula oil per annum is estimated to be around 30 to 35 tonnes while that of !Nara oil is estimated at 10 tonnes per annum.[1]

The production of active ingredients is mainly export-oriented. This is why the Government saw the need to support the sector to move from exports of raw materials to value addition. According to 2017 data, Namibia’s top export markets for cosmetics products are Angola, South Africa, France, Democratic Republic of Congo, Germany and Eswatini.[2] South Africa, France and Germany are sourcing mostly the organic active ingredients for further processing while Angola’s imports are largely finished products. When it comes to imports, Namibia imported cosmetics[3] valued at US$92 309 in 2017 from the world market, of which 85% of this value is imported from South Africa while 12.5% percent is from Eswatini. Germany and the United Kingdom (UK) also supply with minimum quantities.

Manufacturing

The Ministry of Industrialization, Trade and SME Development estimates that there are about 25 registered cosmetics companies in Namibia (mostly small and medium-sized enterprises (SMEs)) involved in the manufacturing of cosmetics products. Of the total active companies, 80% or more are women-owned.

A successful woman-owned SME manufacturer based in Windhoek is manufacturing more than five varieties of cosmetics products and employs at least three women in the production process while services such as accounting, marketing and distribution are outsourced to third parties. The primary market is the tourism sector as distribution is done mainly at lodges and hotels across the country targeting mainly tourists. This is an important complementarity for the cosmetics sector – tourism businesses act as both buyers of the products and as retailers. This can help the penetration into further export markets as foreign tourists ‘discover’ Namibian skincare and cosmetic products.

Marketing and Sales

The biggest challenge facing the cosmetics sector in Namibia remains that of visibility in the formal market. International cosmetics products dominate the shelves of local retailers, making it very challenging for the domestic SME manufacturers to penetrate and position their brands for faster growth. The sector also has to overcome distribution constraints which hinder the supply-chain of both active ingredients and final products in the market.

One of the models used to market cosmetics products in Namibia is through exhibitions and expos. The industry has set up an association to drive such initiatives. These types of market platforms increase visibility and bring products directly to customers; however, it results in lumpy cash flow due to their seasonal nature.

Support required

Women-driven sectors generally remain the least supported through incentives and deliberate interventions. The Ministry of Industrialization, Trade and SME Development in its Sector Growth Strategy identified four main interventions required for the cosmetics sector to grow at a sustainable rate by 2020. This covers issues of sustainable development of Namibian natural resources for the cosmetic industry and the issue of market access, which remains one of the biggest challenges to manufacturers.

A cosmetics product is most often sold as a brand and local manufacturers have to compete with multinational brands in order to build recognized brands. However, due to the unique properties contained in the active ingredients, Namibia’s positioning should target niche markets. Technical support, including capacity development to enhance production, is key as well as sector governance to build networks with other sectors.

The sustainable growth of the cosmetics industry hinges on the involvement of the communities harvesting the products. Disputes within communities who own the active ingredients have in the past disrupted supply. This is a risk for manufacturers using the oil in their production, and constrains the general expansion of the sector which could provide many jobs for women. It is thus important that communities affected, including the mostly women producers and owners of manufacturing companies, are actively involved in designing the value chain and that deliberate measures to support their efforts are implemented.

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[1] This number is underrepresented because most of the oil is in the informal market where data is not available.

[2] Data sourced from ITC trade map.

[3] The cosmetic sector in this blog is defined under HS 33: ‘Essential Oils and Resinoids, perfumery, cosmetic or toilet preparations’.