Slide of the month (SOTM) June. Consumer goods across Africa

Consumer goods markets in Africa have over the past 10-20 years become increasingly interesting for international companies. Growing overall populations and especially the growing middle class have motivated companies from around the world to expand their footprint on the continent. One learning during this process is that Africa is more diverse than previously assumed.

This slide gives an interesting example: consumer goods in Algeria are usually sold through a distribution network that resembles that of some European countries. In Ethiopia on the other hand, a vast variety of products first passes through “Merkato Market”, a relatively chaotic but hugely important trading centre in the capital Addis Ababa. Further differences between the two markets exist in the type of products traded along these networks, the profiles of companies active in them and in many more areas. For all key African countries, these differences need to be understood and their impacts taken into consideration when building up structures as a foreign company.

Read other SOTMs (Slides of the month) here.

Slide of the month (SOTM) May. Glass production in Africa

Slide of the month (SOTM) April. The sugar industry in East Africa

Slide of the month (SOTM) March. The rope manufacturing industry in Africa

Slide of the month (SOTM) February. Obtaining finance in Côte d’Ivoire

Slide of the month (SOTM) January. Internet speeds across Africa

Slide of the month (SOTM) May. Glass production in Africa

Glass has innumerable applications like building, construction and packaging among others. africon did an analysis for a chemicals manufacturer to understand glass production in Africa, by looking at 5 major countries involved in the process. These were Kenya, Nigeria, Tunisia, Egypt and Morocco. Egypt clearly emerged as the leading country in glass manufacturing, followed by Morocco and Tunisia. Based on the findings, africon was able to have a scope on glass production as an application industry for our client and give strategic recommendations.

Read other SOTMs (Slides of the month) here.

Slide of the month (SOTM) April. The sugar industry in East Africa

Slide of the month (SOTM) March. The rope manufacturing industry in Africa

Slide of the month (SOTM) February. Obtaining finance in Côte d’Ivoire

Slide of the month (SOTM) January. Internet speeds across Africa

Slide of the month (SOTM) December. Automotive market in Uganda

 

Slide of the month (SOTM) April. The sugar industry in East Africa

Agri processing is often referred to as one of the most promising areas for many African countries to develop their economies. In this project, africon was tasked to prioritise countries and sectors to (in a next stage) efficiently identify potential customers for a client. The sugar industry, as one of the evaluated industries, scored a “medium” potential for our client – though the image varies across the region. While many East African countries have sugar producing industries, only Ethiopia has over the recent years registered significant growth in sugar output and might continue to do so over the next 2-3 years. On the other hand, many sugar mills in the region suffer from high production costs and dwindling or stagnating output. Through the results and the continuation of this project, we will not only identify the most promising first customers for our client in East Africa, but we will also provide direction for future sales efforts in the region.

Read other SOTMs (Slides of the month) here.

Slide of the month (SOTM) March. The rope manufacturing industry in Africa

Slide of the month (SOTM) February. Obtaining finance in Côte d’Ivoire

Slide of the month (SOTM) January. Internet speeds across Africa

Slide of the month (SOTM) December. Automotive market in Uganda

Slide of the month (SOTM) November. Chemicals application sectors in Nigeria

Slide of the month (SOTM) March. The rope manufacturing industry in Africa

africon recently completed stage 1 of a project for a client from the textile industry. As a supplier of machines for making ropes, the first key question on the way to developing an Africa strategy was “where can we find local manufacturing of ropes in Africa?”. africon answered this question through a combination of industry knowledge from an expert on the ground, as well as a comprehensive analysis of trade statistics. With the identified focus countries, the project can now proceed to look at specific market environments and how our client can position himself to succeed in them.

Read other SOTMs (Slides of the month) here.

Slide of the month (SOTM) February. Obtaining finance in Côte d’Ivoire

Slide of the month (SOTM) January. Internet speeds across Africa

Slide of the month (SOTM) December. Automotive market in Uganda

Slide of the month (SOTM) November. Chemicals application sectors in Nigeria

Slide of the month (SOTM) October. Construction sector performance in South Africa

Slide of the month (SOTM) February. Obtaining finance in Côte d’Ivoire

Over the past years, a strong reform drive has helped the Ivory Coast to become one of West Africa’s most interesting markets. Growth rates of consistently more than 7% p.a. make the country a promising target market for suppliers of all kinds of industrial machinery. However, when managing market entry, it is important to not just look for potential partners but to also understand the context. In this case, africon was asked to investigate the topic of “obtaining finance” as a key constraint for potential Ivorian customers of the client. Luckily, conditions on the ground are relatively favourable, making other factors more critical for potential customers locally.

Read other SOTMs (Slides of the month) here.

Slide of the month (SOTM) January. Internet speeds across Africa

Slide of the month (SOTM) December. Automotive market in Uganda

Slide of the month (SOTM) November. Chemicals application sectors in Nigeria

Slide of the month (SOTM) October. Construction sector performance in South Africa

Slide of the month (SOTM) September. Consumer goods distributors in Ethiopia

Slide of the month (SOTM) January. Internet speeds across Africa

For an increasingly digital world, fast internet is a key driver of growth. As anywhere else, internet speeds in Africa vary greatly between countries as this slide shows: while for example Madagascar has a download speed of around 32 Mb/s, faster than that of the UK, and countries like Ghana and South Africa have speeds of above 20 Mb/s, others still lag behind.

In the project this slide stems from, a client of africon and digital services company was looking for potential future sourcing locations in Africa. africon analysed indicators such as the above to prioritize countries according to their sourcing potential for the client. Though internet speed was an important determinant, a critical factor was to also consider further KPIs, such as the cost and availability of other means of production. An analysis of a mix of various critical indicators finally led to an East African country being ranked as number one. The next target is now to jointly establish a local presence in this country for the client.

Read other SOTMs (Slides of the month) here.

Slide of the month (SOTM) December. Automotive market in Uganda

Slide of the month (SOTM) November. Chemicals application sectors in Nigeria

Slide of the month (SOTM) October. Construction sector performance in South Africa

Slide of the month (SOTM) September. Consumer goods distributors in Ethiopia

Slide of the month (SOTM) August. Real estate projects in South Africa

Slide of the month (SOTM) December. Automotive market in Uganda

The automotive aftermarket is one of the key sectors of opportunities in Africa – not just for Germany, but for many global automotive nations as well. However, many international automotive firms face challenges when doing business in Africa as markets function differently compared to other parts of the world – and within Africa itself. The typical route to market is one example: while consumers in markets like Nigeria tend to buy parts from retailers, consumers in some East African countries – like Uganda here – tend to go for the more convenient option of buying from workshops directly. This changes dynamics in decision making, of which automotive suppliers need to be aware to efficiently position their brands in the market.  

Slide of the month (SOTM) November. Chemicals application sectors in Nigeria

Africa‘s chemical industries have experienced enormous growth over the past decades. Though at a smaller scale, various markets in Africa offer substantial market opportunities for global chemical companies. One of them is our client for this project.  

Taking a certain set of chemicals in our client‘s portfolio, the project objective was to identify the most interesting countries on the continent, as well as the key application industries and important potential customers. After a targeted industry analysis across various countries, africon was able to provide a detailed market sizing and competitive analysis, leading to a comprehensive prioritization of countries and industries, along with recommended routes to market.  

Despite being hampered by its recent recession, the Nigerian market partially shown here emerged as an important country on the list, even though countries like Egypt and Kenya currently rank partially significantly higher than Africa‘s giant“.  

Slide of the month (SOTM) October. Construction sector performance in South Africa

South Africa’s construction sector is one of the largest in Africa and currently worth about 15 billion USD while contributing 4% to the country’s GDP. Unfortunately, it has been in recession since 2017. The overall growth rate in the past decade has been relatively low at only 2.47%.

A struggling economy and a 12% reduction in spending on infrastructure by the government have negatively affected the sector, and even in the current year 2019, some players report that business is shrinking further.

africon completed a local research project in this sector, which was aimed at achieving a detailled market understanding as well as identifying suitable business partners in South Africa for our client.

Despite the current situation, a short to medium term upturn is likely as there are still many planned projects. Additionally, the government has recently established a 27.5 billion USD infrastructure fund and targets infrastructure spending of 59 billion USD over the next 3 years.

Slide of the month (SOTM) September. Consumer goods distributors in Ethiopia

The impressive growth of Ethiopia over the past decade has put the country on the map in the consumer goods business. In this project, africon identified and recommended potential distribution partners for the client locally. After meeting approximately 20 consumer goods distributors, africon rated and ranked the firms according to key performance indicators previously agreed upon with our client.

Even though East Africa Holding did not make it to the shortlist of the most interesting potential partners, africon was impressed by the company’s strong local networks and standing in the market. Its focus on own manufactured goods provide a strong asset in times of Ethiopia’s forex crisis – even though it (at least presently) reduces the company’s priority on imported foreign brands.

If you would like to know more about consumer goods and FCMG in Ethiopia or other parts in Africa, do not hesitate to get in touch with our team.