Africa could become part of Pepco Group’s next manufacturing strategy as the Polish discount retailer looks to reduce its dependence on Asian suppliers and build a more resilient supply network for its European stores.

The Warsaw-listed company is examining potential production and sourcing hubs on the continent, in a move that could open opportunities for African manufacturers supplying clothing, toys, household goods and other low-cost consumer products.

Pepco operates more than 4,000 stores across 19 European countries. Its existing supply chain is heavily linked to China, Bangladesh and India, meaning products often travel thousands of kilometres by sea before reaching European customers.

That model has become harder to manage as geopolitical tensions disrupt major shipping routes.

Cape route adds pressure to Asia-Europe sourcing

Attacks and threats against vessels in the Red Sea have pushed many carriers away from the Suez Canal and toward the longer route around Africa’s Cape of Good Hope.

At the same time, tensions involving Iran have heightened risks around the Strait of Hormuz, another critical corridor for global trade.

Longer voyages can require additional ships and containers while increasing freight costs and delivery times — problems that matter particularly to a discount retailer built around high-volume, low-cost merchandise.

“Unpredictability is a new normal for the supply chains. It is also a new normal for all the retail areas,” said Javier Rubio Fueyo, Pepco’s global sourcing and supply chain director.

Africa opportunity remains at an early stage

Pepco has yet to disclose which African markets it is considering, what products could be made on the continent, whether it has identified manufacturing partners or how much it could invest.

That leaves the proposal at an exploratory stage, rather than a confirmed manufacturing expansion.

North African economies could benefit from their proximity to Pepco’s European markets, while opportunities may also exist in parts of sub-Saharan Africa with established or developing textile and light-manufacturing industries.

Any eventual decision will depend on factors including production capacity, energy reliability, logistics, workforce skills, access to materials, tariffs, EU trade arrangements, rules of origin, foreign-exchange conditions and regulatory stability.

For African manufacturers, the significance is less about an immediate Pepco investment and more about the possibility of a major European retailer reconsidering where its products are made as global supply chains become increasingly vulnerable to geopolitical shocks.