Polish Retailer Pepco Eyes African Manufacturing Hub

Discount retailer Pepco is exploring expanding its manufacturing operations to Africa as geopolitical tensions disrupt supply chains from Asia. The company, which sells affordable clothing and household goods across Europe, sources most of its products from China, India, and Bangladesh.

With shipping routes becoming less predictable and costs rising, Pepco sees North Africa—particularly Tunisia and Egypt—as a potential alternative due to their proximity to European markets and free-trade agreements with the EU. These factors could allow manufacturers to produce goods closer to consumers while maintaining competitive prices.

However, Africa faces challenges in competing with Asia’s established manufacturing ecosystems. China’s advantage lies not only in labor costs but also in its extensive network of factories, suppliers, and logistics infrastructure that enables large-scale production at low cost. Companies that previously moved production out of China have sometimes struggled to replicate this ecosystem elsewhere.

Pepco’s potential move represents a test of whether African manufacturers can build comparable capabilities—including reliable electricity, efficient ports, streamlined customs processes, and the ability to produce consistently at scale—to compete in global markets.