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Africa on the Move - Mega Trends Driving Growth


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Mani James', Regional Director, and Dilshaad Booley's, Research Analyst, briefing on the mega trends that are driving growth in Africa.

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Africa on the Move - Mega Trends Driving Growth

  1. 1. Africa on the Move - Mega Trends Driving Growth Mani James, Regional Director Dilshaad Booley, Research Analyst Chemicals, Materials & Food 13th September, 2011
  2. 2. Today’s Presenter’s Mani James, Regional Director Frost & SullivanOver 13 years of management and strategy consulting experience, having worked with clients in North America, South East Asia, Asia Pacific and Africa. Particular expertise in: - Petrochemicals, Biofuels, materials handling, food additives and chemicals in Africa - Industrial Automation and Supply chain management - Manufacturing Dilshaad Booley, Research Analyst Frost & Sullivan Experience in market research and consulting research with particular expertise in: - Paints and Coatings Market in Southern Africa - Polyurethane Market in sub-Saharan Africa - Personal Protective Equipment Market in Southern Africa - Consulting work on the Saldanha Bay Industrial Development Zone 2
  3. 3. Agenda 1. Global Mega Trends – Brief Recap 2. Africa – The Source of Real Future Growth 3. Mega Trends Driving Growth in Africa 4. Sectors in Africa that Would Present the Most Opportunities 5. Conclusion : Unlocking the Opportunities 3
  4. 4. Definition of a Mega Trend Impact of Mega Trends on Key What is a Mega Trend? Organisational Functions Marketing and Strategy Mega Trends are global, sustained and macro economic forces of development that impact business, Innovation Scouting R&D Budget Spending economy, society, cultures and personal lives thereby defining ourfuture world and its increasing pace of change Product Technology Planning and Planning Development 4
  5. 5. Top Global Mega Trends ENERGY Future Global Power GenerationURBANIZATION Mega City Innovating to Zero ! : Zero Emission Mega Regions Technologies Mega Corridors SMART Cities and SMART Infrastructure E-MOBILITY Electric Vehicles Gen Y Population Electric Aircrafts Women Empowerment and Women CEOsSOCIAL Power to the Middle Class Reverse Brain Drain and CXO Positions in Developing Economies INFRASTRUCTURE Geo Socialization Future Investment in Infrastructure : Power, Water and Transport Emerging Transportation CorridorsECONOMY Beyond BRIC: The Next Game Changers New Shores: Emerging Outsourcing Hotspots Future Global 500 Companies by Region New Trade Zones BUSINESS New Business Models SMART Clouds: The Next in Cloud Computing SPACE JAM: Future of SatellitesTECHNOLOGY Virtual World RoboSlaves WELLNESS Future Consumer Electronics HEALTH & Wireless Intelligence Fit or Fat?: Health, Wellness and Well Future Broadband Applications Being Innovative Technologies of the Future 5
  6. 6. The BIG Global Picture – Game Changers Beyond 2020 Russia: $7 Poland: Trillion $650 Billion Turkey: $790 Billion China: $8 Algeria GDP: Trillion $310 billion Egypt: $490 Vietnam: $175 Billion Billion Mexico: $1.5 Nigeria GDP: India: Trillion $510.5 billion $4.5 Trillion The Philippines: Brazil: $2.7 $250 Billion Trillion Angola GDP: $201Note: The figure denotes GDP at billion Indonesia:market prices $800 Billion South Africa: $555.5 Billion BRIC Countries Other Emerging Countries (Africa) Next Game Changers includes: Mexico, Argentina, Poland, Egypt, Turkey, Indonesia, Philippines, Vietnam 6
  7. 7. African Mega Trends 1.Urbanisation 2.Regional Integration 3.Connecting the Unconnected 4.Innovation to Zero 5.Renewable Power 6.New Business Models 7.The Responsible Revolution 8.Future Infrastructure 7
  8. 8. Africa – Did you Know? Manufacturing: $204 billion Manufacturing, food packaging Energy: $800 and fortification. billion Infrastructure Development: Electricity infrastructure, renewable energy, >US$400 billion rehabilitation of existing Transport infrastructure and structures rehabilitation, housing, ICT, building and other materials, construction and PPE Agriculture: US$50 billion Includes fertilizers, crop protection, animal health, feed and additive products, and plant biotechnology. Oil & Gas: US$3.6 trillion Infrastructure, extraction Africa – The Summary chemicals, and rehabilitation Water: US$700 billion Includes sanitation, water infrastructure and chemicals, renewable water, and water and wastewater treatment. 8
  9. 9. Understanding the Role of Mega TrendsDifference between what & why of customer wants , responding to opportunities & threats Sustainable Increasing Health & Safety Urbanisation Development Visionary Innovation &Public / Private Market Sector Vanguard Infrastructure Investment to Development Drive Industry Development Rebuilding War Torn Countries 9
  10. 10. Mega Trends Driving Sector Growth Sectors Agriculture Infrastructure Materials Oil and Gas Renewable Energy Mining Products Consumer and Sanitation Water Treatment Construction Mega TrendsIncreasing UrbanisationPublic/Private Sector Investment to DriveIndustry DevelopmentSustainable DevelopmentInfrastructure DevelopmentHealth, Wellness and SafetyRebuilding War-torn Countries 10
  11. 11. Unlocking the Opportunities Presented by Mega Trends How can you adapt your strategies to tap Why is Africa the into this massive next big opportunity Africa opportunity for presents? chemicals and Where are the material key opportunities suppliers? When can you that would expect to see the manifest in Africa What are the key impact of micro by 2020? Mega Trends that trends on the would drive business business for environment? chemicals and materials companies in Africa? 11
  12. 12. 2 3 41 5 Water Treatment and Sanitation Impact o Water abstraction o Water and wastewater treatment plants o Water distribution o Renewable water Central African Republic: 40% of Africans lack access to safe drinking Project worth $15.5 million to water provide access to drinking water 60% of Africans lack access to basic sanitation DRC: >50% of African water reserves, but 74% of population ` 2 million children die from diarrhea have no access to safe drinking every year due to poor sanitation water. Requires rainwater and drinking water. harvesting systems. South Africa: $189 million required for water Renewable Water Water and Waste infrastructure and Water Infrastructure & Water Treatment maintenance US$10 billion Treatment Chemicals US$22 billion US$1.06 billion total Africa has average annual required to upgrade market for 8 major enough water investment Africa’s water sub-Saharan African endowment for infrastructure Regions the entire continent 12
  13. 13. 3 2 41 5 Renewable Energy Impact Morocco 7.2 GW by o Wind power 150 MW Egypt 2020 o Solar power 500 MW 140 MW (natural gas solar plant) o Hydropower Africa requires 7,000 MW of new power-generation Kenya capacity annually (10,000MW) DRC 2000kWh of energy per square metre 52 turbines per year hitting more than 80% of (39,000 MW) ` Africa’s landscape 0.5%: Africa’s share in wind energy production Across Africa: >60,000MW hydropower plants planned Of the US$3.6 billion investments in renewable Wind projects Renewable Hydropower energy in 2010, 73.8% went to Wind Energy Solar thermal Energy $560 Million Egypt and Kenya. $3.0 Billion projects >US$238 billon Cost of materials to $8 billion for hydropower construct 4000MW cost of material for investment by the 3000MW African storage. 2020 hydropower plants potential Africa uses 20% of potential hydropower 13
  14. 14. 3 2 41 5 Agriculture Impact Ethiopia: The o Crop protection Ethiopia, Fertilizer o Fertilizers Support Project allocated $1.3 million o Plant biotechnology in 2010 for the import o Bio-fuels of fertilizers. 90% of agriculture depends on rain – need water pumping systems to improve irrigation 25% of livestock die annually due to preventable animal diseases in Africa ` 5% Sub-Saharan African share of the global crop protection market African countries under- Crop Protection Animal Feed & utilising fertilizer Agriculture Fertilizers > US$2 billion Additives >US$7.6 billion US$5 billion War torn countries under- (projected value of Up to US$40 investment (increase fertilizer utilising fertilizer the market in sub- billion opportunity use from 9kg per Saharan Africa by (Opportunity in Currently using plant Africa by 2020) hectare to 15kg) 2020) biotechnology (incl. field trials) 14
  15. 15. 2 3 41 5 Oil & Gas and Mining Impact North & South Chad Sudan o Oil & Gas Ethiopia: 25 o Mining billion cubic o Downstream metres of natural gas reserves Somalia 75% of the chemicals for the oil and gas sector in Liberia Africa are imported. DRC Burundi < 5% of crude oil refined in Africa Nigeria: to spend $1billion on oil ` Average oil and gas contribution to GDP for the66.6% majority oil producers countries in Africa exploration in Chad, Gongola, Sokoto and Anambra Basins from Uganda/Kenya: Possible 82% of the world’s production of PGM’s comes from 2011-2015 construction of a $1.5 Africa billion 806-mile oil pipeline from Uganda to Kenya Oil & Gas Oil & Gas Exporters Producers $15 billion US$130 billion US$3.5 trillion private investment Oil investment demand for for Nigeria to develop opportunity in extraction Potential Oil Producers its gas industry infrastructure chemicals to full capacity Gold Producers by 2020 Diamonds 15
  16. 16. 3 2 41 5 Construction and Infrastructure Impact Egypt attract $7.3bn in construction o Construction (by 2015), with cement demand growth of 9% to 2015 across o Road and Rail Infrastructure Africa 30 % of the rural population in Sub-Saharan Africa has East Africa : Liberia: $18.5 Construction boom to access to all-season roads. million project to increase demand for rebuild universities steel and cement over 5 and infrastructure yearsLow-cost , light weight housing development in Rwanda ` – banana , sisal fibre, volcanic cinders27% of Trans-African Highway system in good condition Sudan: 80-90% of dwellings are made of straw, cow dung and mud and need periodic replacement Transport Road Republic of Infrastructure Maintenance South Sudan: US$ 300 billion in Paints and US$26 billion $500+ billion for road and rail Coatings just to maintain roads, bridges, infrastructure >US $2 billion existing paved refineries and upgrading roads pipelines 16
  17. 17. 2 3 41 5 Manufacturing and Materials Impact o Raw Materials o Manufacturing o Plastics Packaging o Building Materials Manufacturing in Africa is: 49% resource- based, 31% medium-high technology, 20% low Kenya: informal technology manufacturing enterprises account Collective GDP in 2020 is expected to be for about 83% of total ` $2.6 trillion, with $1.4 trillion consumer manufacturing spending in 2020 employment Low cost government housing to increase by 30% - main requirement of composite materials Manufacturing Food Building >US$200 billion Materials Packaging & Engineering materials: plastics: (Manufacturing is >US$8.6 billion Fortification $15 billion $ 100 million roughly 10.5% of Investment US$3.8 billion Africa’s GDP) investment 17
  18. 18. Are you Geared up for Growth? Customised Solutions South Africa‘s Physical Proximity Dominance Challenged More Global Chemical Chemicals, Materials & Food Business Product Porfolio Companies Locating to Differentiation Africa Consumer focus – Africa as a Low Cost Customer‘s Customer Manufacturing Hub Delve Downstream 18
  19. 19. Three Phased Approach to Identify Emerging Opportunities:Robust Methodology to Evaluate Top Mega Trends and Short list the Most Relevant toCompany X’s Business Short list Top 10-15 Mega Trends Which Provide Most Opportunity/Impact to Company MT MT MT MT MT MT MT MT MT MT MT• Short-list 10 most relevant Mega Trends to Company X and create a short profile of each MT Mega Trends Presentation or• Prioritize the 5 most relevant MTs for Company X and conduct a top level Phase 1 Workshop is the First assessment of these MTs to Step Company X• Conduct a detailed assessment of Detailed Assessment these MTs to Company X with a follow-up workshop or consulting Phase 2 (Phase 2) and Tactical assignment Business Plan (Phase 3) Can Take the Form of Consulting• Develop tactical business plan and implementation strategy Engagement or Follow• Develop a monitoring, evaluation, and Phase 3 optimization strategy Up Workshops Final output : Defined short list of the 4 or 5 most market attractive, MT MT MT easy to implement and high ROI Mega Trend opportunities MT MT 19
  20. 20. Conclusion Africa Opportunity Focus – Water Treatment & Sanitation, Agriculture, Oil & gas, Mining, Renewable energy, Construction & Infrastructure, Manufacturing, Consumer products & Materials1. Mega Trends impact multiple industries and need to examined carefully to optimally develop medium and long term strategies in current and new markets2. It is important to understand the eco-system of the Mega Trend, possible convergence and the elements of the value chain which have most profitability3. All these trends are global and have global ramifications thereby offering scalable opportunities4. These forces are changing rapidly and bringing new competencies into play at half the life-cycle speed of the past decade5. Organisations’ need “Mega Trend” champions and teams within their organisation structure to best exploit the opportunities6. In Africa we need to particularly understand the opportunities arising locally as a consequence of global mega trends – e.g. local markets, international markets, as part of international supply chain 20
  21. 21. Next Steps Request a proposal for Growth Partnership Services or Growth Consulting Services to support you and your team to accelerate the growth of your company. ( Join us at our annual Growth, Innovation, and Leadership 2012: A Frost & Sullivan Global Congress on Corporate Growth occurring 15 – 16 May, 2012 ( Register for Frost & Sullivan’s Growth Opportunity Newsletter and keep abreast of innovative growth opportunities ( 21
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  24. 24. For Additional Information Samantha James Vassalissa Kozoulina Corporate Communications Account Manager Africa CMF +27 18 468 2315 +27 21 680 3286 Mani James Regional Director Growth Partnership Services +27 21 680 3208 24