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.
africon GmbH won their first tender with GIZ (Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH) – The official German association for international cooperation. africon was then invited to organize the program of a Tunisian delegation visiting Germany from 24-26th April of this year.
During their time in Germany the Tunisian companies met with German companies of the food & beverage sector to create valuable and fruitful contacts in order to create long lasting partnerships for the purpose of entering Sub Saharan African markets with joint forces.
The delegation trip was part of the 4-year GIZ project PEMA (Promotion des exportations créatrice d’emploi dans des nouveaux marchés africains), which aims at supporting export activities to Sub Sahara Africa and to further job creation in SSA. The Tunisian delegation consisted of 7 food processing companies and visited Germany for 2 days.
The core piece of the delegation’s trip was a B2B Workshop at the Congress Center Düsseldorf on Thursday, 25 April 2019. During this event the German and Tunisian companies received very good insights into the Tunisian as well as Sub Saharan African markets of food & beverage processing through overview presentations given by africon GmbH and Deloitte Tunisia (the local Tunisian partner of GIZ).
After these introductory presentations the participants exchanged ideas & interests in individual discussions while sharing coffee and lunch.
All participants (Tunisian & German) said that the B2B event, including the presentations, was very satisfying and useful.
During their first day, on 24. April 2019 the Tunisian delegates received the opportunity to visit one of the largest German non-alcoholic beverage manufacturers “Sinalco” (Deutsche Sinalco GmbH Markengetränke & Co. KG).
During this site visit a presentation about the history of Sinalco was given and Sinalco presented their production facilities to the delegation. This gave the Tunisian company representatives the opportunity to experience one of the largest German beverage manufacturers “in action”.
The agrofood event took place alongside the plastprintpack event from the 26th to 28th of March, 2019, featuring over 120 exhibitors from 24 countries. Africon was part of the 2,094 visitors in attendance, and was well represented by our Nigerian team.
Asides the display of new technologies and products by exhibitors, the event included a very insightful 3-day conference, where industry experts shared their knowledge and foresight about different topics relating to the food and beverage processing, plastics and packaging business in Nigeria.
According to africon representatives, it was such an interesting and insightful event, and they had great interactions with many exhibitors and visitors .
africon conducted a market analysis on the automotive industry with specific interest in the automotive parts market in sub-Saharan Africa. Our focus was further narrowed 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.
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.
africon recently conducted aluminium market research in Africa and this revealed that 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 mn tonnes to 107 mn 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.
Last October and in the International Tube Association 3rd journal edition, africon published an article about the Steel industry in East Africa. The article started by portraying the image of Africa that is perceived by the rest of the world. Many countries in the continent have started to change their image from a crisis centre to a potential emerging market. The macro economic factors strongly indicate positive changes that will lead the continent to be the next emerging market. The growing young population together with economic growth on the continent lead to a growing labour force and cities which lead to a significant increase in middle class. Furthermore, the continent is pushing towards manufacturing and automation as this sector remains as the continent weakest link. Also, constant rise in foreign direct investment over the past decades is further boosting the economy not only in financial terms but as well in terms of knowledge, expertise and technology. Industries of almost all kind will experience a rapid growth due to this economic boom, however the African market is still very diverse as the continent host 54 countries.
East Africa currently distinguish itself by economical growth and political stability in the region and the least dependent on commodities such as gold or oil. The region was projected to capture the highest regional economic growth over the past year in Africa. The article 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
Overall, Africa does host enormous opportunities for firms from around the world. With its diversity and complicity however comes the need to evaluate closely where they are and how to make use of the it.
To access the full article, please use the link below:
The East African Steel Industry
Over the past years, more and more automotive firms have shown increasing interest in Sub-Sahara Africa. Even though OEMs like VW and Nissan have dominated the news with their announcement of establishing assembly plants in Africa, the largest immediate automotive business potential lies elsewhere: in the automotive aftermarket.
With more than 12,7 million vehicles on the road in Nigeria, more than 6 million in Egypt and almost 2 million in Kenya, more and more automotive parts are sold in Africa. The main challenge especially for global aftermarket leaders from Europe and Japan: the sector requires large amount of data to efficiently and effectively increase sales. With data availability in Africa being a major challenge, africon has successfully plugged this gap and supported aftermarket firms from around the world and in different product segments on their Africa strategy. Amongst other points, we supported firms with market sizes, details on vehicles in operation, suitable import partners and even research on specific part numbers. For the upcoming years, africon has set an increased focus on the sector and expects more companies to follow current early movers to the continent.
africon was contracted to carry out a suitable go-to market Africa strategy for a major international player in the two-way radio communication industry (LMR). The project covered 7 countries where a total of 184 interviews were conducted with relevant players in the industry. The results concluded from the analysis of all interviews and market data was clear; South Africa dwarfs its counterparts in terms of market size with at market of more than 30 mio Euro. Nigeria, Kenya and Angola on the other hand offer the greatest growth potential going forward. Quality was found to be the key determining criteria for consumers when purchasing two-way radios. This was due to fact that the main users of two-way radios use them in critical situations where quality cannot be compromised including law enforcement, private security, mining, oil and gas. Customers in these sectors are willing to pay a premium for the guarantee of a reliable products. These still hold a market share of more than 80% compared to cheap products from China. Another finding has been that local system partners are key to success where africon identified more than 30 locally in key markets
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 underlaying 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.
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