Archive d’étiquettes pour : technology

Slide of the month (SOTM) March. Kenya’s construction and real estate sector

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africon GmbH was contracted by one of our clients and we successfully conducted a research on the aluminium industry in Kenya. We found out that the key drivers of this industry are the construction and real estate sectors in Kenya. Findings revealed that these sectors have experienced positive growth rates within the last five years and are expected to expand even further.

Kenya’s construction sector expanded by 8.6% and contributed approximately 6% to the country’s GDP in 2017. It is also one of the major sectors attracting foreign investors to the country. 

According to Deloitte’s construction trends report, Kenya has remained the leading country with the highest number of projects in East Africa for four consecutive years, with projects increasing by 78% from 23 projects in 2017 to 41 projects worth $38.2 billion in 2018. The major construction projects are in real estate, energy and power, and transport, sources also reveal that the Kenyan government is spending billions of dollars on transport projects as Kenya is expected to become the logistics hub of East Africa.

Challenges to this Kenya’s construction sector include: the frequent use of substandard materials, long procurement procedures, low project completion rates, and low technological knowledge. Despite these apparent challenges, continuous growth is expected in the sector as the Kenyan government plans to build 500,000 houses by 2022, and also to reduce corporate tax for developers who construct at least 400 units per year.

Kenya’s real estate sector is the 6th largest contributor to Kenya’s GDP, and was valued at $5.5 billion in 2017. The sector expanded by 6.1% in 2017 compared to 8.8% in 2016, and this slowed growth rate is due to the elections and reduced credit supply (as a result of capped interest rates). The construction of new private residential buildings in Nairobi increased from 9,054 in 2015 to 10,002 in 2016, while new public residential buildings rose from 45 in 2015 to 1,062 in 2016. Some of the challenges faced by Kenya’s real estate sector include inadequate sources of funding, high land costs, and infrastructure development costs. However, government initiatives such as digitization of the land ministry, removal of land search fees, and inclusion of affordable housing as part of Kenya’s big four agenda is likely to boost real estate development over the next few years

For more information, check out our other slides of the month and do not hesitate to contact us.

 

africon’s editorial publication in the ITA journal

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last October africon published its first editorial addressing the future of the Steel industry in East Africa at the 3rd journal edition of the International Tube Association. The article started by highlighting how East Africa distinguishes itself by economical growth and political stability in the region and being the least dependent on primary commodities such as gold or oil in comparison with other african regions. The East African region was projected to capture the highest regional economic growth over the past year in Africa. The article then went in depth to analyse those macro-economic factors and focused on the drivers of steel industry that promote economic growth in Africa and especially in East Africa.

Now you can read the full version of the editorial here or download it as a white paper

Download Whitepaper

Slide of the month (SOTM) February. Automotive parts imports in sub-Saharan Africa

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Automotive parts import Sub-Saharan Africa.

Let us look at the automotive market in sub-Saharan Africa narrowing down to the aggregate value of three main automotive service parts which are: Filters (consisting of air filters for internal combustion engines, as well as Oil or petrol filters for internal combustion engines), Spark plugs, and Brake parts. The total combined import value of these automotive parts in sub-Saharan Africa was $753 million in year 2017. Brake parts recorded the highest import value worth $388 million which is 52% of the total import value of the three selected automotive parts combined, while spark plugs were the least of the imports valued at $58 million.

Based on our analysis of the available data on automotive parts imports in sub-Saharan Africa, we found that South Africa, Nigeria, Angola, Kenya, and Ghana were the top five importers of filters, spark plugs and brake plugs into sub-Saharan Africa in the year 2017. South Africa being the largest market, accounted for 47% of these automotive parts imports worth $355 million, while Ghana being the fifth largest market was worth $21 million.

The major export partners were China, Germany, South Africa, Belgium and USA. However, the data from year 2007 shows that Germany was the largest exporter of these automotive parts to the Sub Saharan Africa region until 2013 when China took over as the largest exporter to the region. Brake parts were also the largest exports (of the three parts) from China and Germany while Filters were the largest exports from South Africa, Belgium and USA.

Slide of the month (SOTM) January. The automotive parts market in Nigeria

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SOTM. January

The Nigerian automotive industry appears to be an interesting market, as our research on the automotive parts market shows that the market size is worth USD 4.4bn or more.

The total vehicles in operation in Nigeria is currently estimated at 12.7 million, and Nigerian drivers spend an average of USD 350 on automotive parts per year.

Interviews conducted with various automotive experts in Nigeria also confirmed that the market for service parts accounts for the biggest share of the automotive market.

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

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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.

Slide of the month (SOTM) November. Market entry project for a US communication company

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Market entry project

When it comes to the two-way radio communication industry, South Africa dwarfs its counterparts in terms of market size and market maturity. Nigeria, Kenya and Angola on the other hand offer the greatest potential going into the future. Quality was found to be the key determining criteria for consumers when purchasing two-way radios. This is mainly due to the fact that main users of two way radios tend to be in critical sectors where quality cannot be compromised including law enforcement, private security, mining, oil and gas. Customers in this sectors are willing to pay a premium for the guarantee of a reliable product.

africon can provide value to other radio communication companies by evaluating the market potential for their product, analyze the value chain and identify suitable distribution partners in the key market Africa.

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

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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.

 

 

Spectaris tasks africon GmbH for Nigeria, West- and East Africa

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The industry association Spectaris contracted africon GmbH in 2015 to analyse the Nigerian market potential for German companies in the area of laboratory and analytical equipment.

Focus of the joint Nigeria study was the analysis of market sizes for the various product areas, the identification and evaluation of promising target market segments, as well as the explanation of macroeconomic developments. Best practice examples of German companies operating in Nigeria display the present potentials, valuable insights from local industry players are a key element of the study.

With a total market size of around $80m and rapid growth in various sectors, Nigeria is the 2nd largest market in Sub Sahara Africa after South Africa for companies supplying laboratory equipment. Even though low quality standards are a common challenge in the industry, more conscious segments are emerging, driving demand for German high quality products.

The decision for the study was a result of an increasing interest of the German high tech industry on the African growth markets. Especially in the area of medical devices, but also across many other sectors, some African markets are experiencing rapid growth, opening up opportunities for German and international companies.

In continuation of the joint exploration of the African markets, Spectaris and africon furthermore conducted a joint work shop for its member’s companies on the opportunities in East- and West Africa in June 2016. Outside West Africa, East Africa boasts strong potentials, e.g. for medical devices with major public and private projects in the Kenyan health care sector, oil discoveries in the region will attract investments in laboratories. Successful regional integration initiatives as well as strong economic growth further enhance business potentials.