Slide of the month (SOTM) September. The Nigerian rail industry

Africa’s booming population is creating vast opportunities, including significant demand for robust infrastructure. Consequent to this development, governments of many African countries have become more intentional about investing in improving and diversifying transport infrastructure. One of the most conspicuous areas is the railway sector, which has attracted many global players who seek to benefit from the emerging opportunities.

As experts on Africa business development, africon was consulted by a notable global leader in rail components manufacturing to explicate the existing rail system operations and current or future business opportunities in Nigeria. To get the best insights and evaluate the progress so far, we visited numerous railway sites with operating lines and ongoing construction projects across Nigeria. We also conducted targeted interviews with relevant stakeholders in the railway system.

As a result, africon was able to create a clear picture of the Nigerian railway system for our client. Our data included a view of the country’s historical railway development, key influencers in the sector, mapping of existing and planned rail lines across the country (drawn from the railway master plan), analysis of budgets, financing and expenditure trends, analysis of rolling stock fleet in detail, equipment, components demand as well as long-term demand projections. In addition, we looked closer into the system’s challenges and potential gaps that foreign players could potentially fill. Most importantly, africon charted the most effective route-to-market strategy for our client to be very competitive and well established in the market. We also identified reliable local partners for them to work with to achieve this even faster.

Overall, the railway system in Nigeria is gaining traction with a lot more attention and investments from the government. There are many ongoing and upcoming rail lines in the country. Though the Chinese firm’s interests are well represented, the Nigerian Railway Corporation and Federal Ministry of Transportation state that they are open and welcoming to more foreign suppliers and investors interested in the country’s railway business.

If you have any questions or concerns, you can contact us at info@africon.de

Read previous SOTMs (Slides of the month) here.

Slide of the month (SOTM) August. The Nigerian automotive industry

Slide of the month (SOTM) July. The age of vehicles in operation in Nigeria

Slide of the month (SOTM) June. Labtech imports in East Africa

Slide of the month (SOTM) May: The logistics sector in Rwanda and Ethiopia

Slide of the month (SOTM) April. Overview of the tech scene in select countries in Africa

 

Slide of the month (SOTM) May. The logistics sector in Rwanda and Ethiopia

Many African countries’ economic growth is highly dependent on international trade. A more efficient logistical system can greatly increase a country’s local economic value and as a result, create jobs and prosperity.

In this project, africon was contracted to analyse the logistics sector in Rwanda and Ethiopia. We aimed to identify the existing gaps and fields where the client, a development cooperation agency, could intervene to improve efficiency, thereby aiding job and wealth creation in these countries. We conducted primary and secondary research simultaneously. While analysing country information and industry reports, over 70 interviews were conducted in these countries with relevant players in the logistics field. These included logistics firms, governmental and regulatory bodies, associations and educational institutions.

Through the results of the research, we identified main challenges in key areas that have significant impact on the logistics sector in Rwanda and Ethiopia. Such areas were, for example, infrastructure, customs procedures, education, and digitalisation. The logistics landscape of both landlocked countries is very contrasting regarding the highlighted areas. Based on our findings, we could derive practical directions for measures to fill present gaps and thus strengthen the sector for the future while creating jobs, fostering private investments and promoting sustainability. All results were consolidated into a comprehensive report which contained tactical recommendations for the client.

If you have any questions about the sector or would like to discuss more, please contact us at info@africon.de

Read previous SOTMs (Slides of the month) here.

Slide of the month (SOTM) April. Overview of the tech scene in select countries in Africa

Slide of the month (SOTM) March. Operational and upcoming railway lines in Nigeria

Slide of the month (SOTM) February. Import statistics of medical equipment in East African Community (EAC)

Slide of the month (SOTM) January. The market for commercial vehicles in Kenya

Slide of the month (SOTM) December. The food, beverage and tobacco manufacturing industry in Nigeria

 

Slide of the month (SOTM) March. Operational and upcoming railway lines in Nigeria

Several African countries have ongoing and planned rail projects. Africa’s largest economy is developing the rail sector to improve the poor transport infrastructure. africon recently completed a project in the railway sector in Nigeria for one of our clients who manufactures rail components. The project aimed to give an overview of the industry in terms of ongoing and upcoming projects.

africon spent about 4 months meeting with key local decision-makers and experts in a very challenging market environment. The Nigerian railway network consists of 3,505 km narrow gauge lines and 364 km standard gauge lines. There are several operational lines with multiple ongoing inter-state and light rail projects across major cities in Nigeria. The figure below maps some of the operational lines which we covered in the course of the project. We also provided more invaluable insights & data and gave strategic recommendations about the sector to our client.

Below, you will also find some pictures that our team in Nigeria took.

If you have any questions about the sector or would like to discuss more, please contact us at info@africon.de

Read previous SOTMs (Slides of the month) here.

Slide of the month (SOTM) February. Import statistics of medical equipment in East African Community (EAC).

Slide of the month (SOTM) January. The market for commercial vehicles in Kenya

Slide of the month (SOTM) December. The food, beverage and tobacco manufacturing industry in Nigeria

Slide of the month (SOTM) November. The construction industry in Africa

Slide of the month (SOTM) October. The meat & fish sector 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) April. Ghana’s aluminium fabrication market

The overall market for aluminium profiles in Ghana is split into three price/quality segments: Firstly, premium profiles are used in large high rise and complex construction projects, which are shaping the skylines of Accra and other cities in Ghana. This segment represents around 19% of the total market volume and is served by so called “International Fabricators” and “Niche Fabricators”. On the opposite side of the spectrum, “Retail Fabricators” serve around 50% of the market demand with relatively lower price/quality profiles. These profiles are used in common housing construction and for smaller commercial buildings. In between these two segments is the medium price/quality segment, which represents around 31% of the market. Profiles in this segment are used in a variety of residential and commercial construction projects.

Overall, the aluminium profiles market in Ghana has a pyramid shape, with a large budget and a relatively smaller but still significant premium segment. As for other building materials, especially the premium segment holds interesting opportunities for firms from Europe and elsewhere.

If you would like to know more about how your market in Ghana looks, how to access this market, who the right local partners and the customers are, do not hesitate to get in touch.

SOTM December

Slide of the month (SOTM) December. Aluminium market growth in sub-Saharan Africa

SOTM December

The Aluminium market in sub-Saharan Africa has been experiencing a steady growth in the past decade.

The major contribution to this, is the increased import of hollow profiles of aluminium alloys into sub-Saharan Africa which has grown by 467%, from 23 million tonnes to 107 million tonnes between 2008 and 2017, compared to other profiles.

The non-alloyed profiles which has the lowest contribution seems to be dwindling in import size, as they only increased between 2009 and 2012, after which they began to decline.

renewable energy generated in Africa

Slide of the month (SOTM) May. Renewable energy in sub-Saharan Africa

renewable energy generated in Africa

The African continent offers an ideal environment for electricity generation from renewable sources. Therefore, it is not surprising that sub-Saharan Africa (SSA) already ranks third worldwide in terms of percentage of electricity generated through renewable sources. Roughly 27% of electricity generated in 2015 was generated through renewable sources. Lesotho, Ethiopia, D.R. Congo, Central African Republic, Namibia, Zambia, Uganda and Malawi rank best, as they generate more than 90% of their total electricity output from renewable sources.

However, as of 2015, 91% of the renewable energy generated in SSA was generated from hydropower. The continent’s abundant solar, wind, biomass and geothermal resources are yet to be exploited more efficiently.

The Africa Renewable Energy Initiative (AREI), established in 2015 and operating under the mandate of the African Union, aims to add 310 gigawatt of additional renewable energy generation capacity to the continent until 2030. This brings also other sources of renewable energy than water into focus and creates high opportunities for international technology and service providers in the renewable energy sector.

Slide of the month (SOTM) February. Steel industry growth in Africa.

 The heightened interest in the African steel markets can partly be explained by this chart. It shows the rapidly increasing demand for steel in Africa, as well as key countries for steel in Africa. As part of the projects, africon personally conducted meetings with over 100 decision takers of local steel producers and stakeholders across the SSA region. Visited companies included local groups such as Safal, Comcraft and Aarti. Insights were also gathered about machinery suppliers such as HITEC, HITACHI, Danieli, SMS and Sinosteel.

Slide of the month (SOTM) November. Aluminium foil

After growing its expertise in the African packaging markets throughout the last 5 years, africon supported a leading aluminium foil supplier to the flexible-, laminated carton, cigarette- and blister packaging industry with the development of its Africa strategy.

53 key industrial players were interviewed, including 11 packaging manufacturers in South Africa and 12 packaging manufacturers in Nigeria. In terms of market attractiveness, the South African market outscored the Nigerian market. However, given the well established long term relations many South African companies have with their suppliers, the Nigerian market offered a far bigger accessible market than the South African.

Only by meeting the local key players personally in Nigeria and South Africa, africon was able to identify which companies signaled interest in a future cooperation with the client. The africon hands-on approach was therefore once again essential for the development of a successful Africa strategy.

 

 

 

Slide of the month (SOTM) September. Woodworking machinery importation

During a recent project conducted by africon with focus on the wood working machinery market in Nigeria, africon GmbH identified 107 furniture manufacturing companies and 14 machine distributors focusing specifically on the furniture manufacturing market.

By holding expert interviews with a big number of manufacturers and distributors it became quite clear that the furniture manufacturing sector in Nigeria is very much quality oriented when it comes to purchasing machinery. This stands in contrast to many other industrial sectors that are clearly driven by price when it comes to purchasing e.g. in the steel industries.

The slide of the month August 2017 shows that during economically difficult periods price is starting to become the underlying factor even though quality is still considered to be very important. Therefore, the countries exporting high quality machinery have lost a big market share to countries exporting low price machinery. Consequently, it would be important for high quality machinery suppliers to widen their portfolio containing a lower priced machine that still meets all basic quality requirements.