Chemicals Sector Future Growth Opportunities
Is Africa a Part of Your Strategy?
Mani James, Operations Director, Africa
Ro...
2
Today’s Presenters
Mani James
Operations Director- Africa
Frost & Sullivan, Africa
Cape Town
Functional Expertise
• Over...
3
Focus Points
1. Occasion for the Analyst Briefing
2. Mega Trends: Then and Now
3. Case Study on DOW Chemical
Company – A...
4
Poll Question 1
Which group of sub-Saharan African countries are anticipated to provide
future growth opportunities afte...
5
Agenda
This analyst briefing:
o Mega Trends in 2010
o Success story in Africa – Dow Africa
o Mega Trends 2022
o Q & A Se...
6
Urbanisation: Then and Now
Water and Wastewater
Treatment
Construction &
Infrastructure (Chemicals)
Urbanisation rates w...
7
2010
2010
2010
2010
Road Rail Electricity Airports Telecom
2013
2013
2013
2013
Road Rail Electricity Airports Telecom
In...
8
Sustainability: Then and Now
Hydro
Fossil Fuels (includes
nuclear for SA
Renewables
2010 2013
2010 2013
Kenya: Energy Mi...
Sub-Saharan Africa … Lifting off
EAST
SOUTH
WEST
GDP
Growth
Population
Growth
FDI
South
West
East
Oil
Ga
s
Strengths
Weakn...
10
Mega Trends: Fast Forward to 2022
Urbanisation and
Infrastructure
Development
Energy Demand
and Resource
Drain
Water an...
11
Emerging African Economies
• x
South Africa
Nigeria
Kenya
Ghana
Indicator
Angola Tanzania
2014 GDP ($ billion) 129.79 3...
12
Poll Question 2
Have you identified the right distribution partners for your African Growth
Strategy?
• Yes
• Not sure,...
13
Supply Chain Efficiencies—Major Trends
Source: Frost & Sullivan
Improve Integrate InvestKey Strategies:
14
Supply Chain Efficiencies—Logistics Performance Index
Source: World Bank, Frost & Sullivan
Logistics Performance Index,...
15
Urbanisation and Infrastructure Development—$28 billion
will be invested in transport corridor development
Road
Rail
Po...
16
Energy Demand and Resource Drain—African Trade
Corridors: What is driving their development and why?
C
B Bauxite
Uraniu...
17
Water and Food Scarcity
2012
Global
Hunger
Index
Level of
Severity
Angola 24.1 Alarming
Tanzania 19.3 Serious
Zambia 23...
18
Key Take-Aways – Success factors in Africa
Key Cash cow products
in the broad range
Strengthen e-commerce
platforms
Aff...
19
Next Steps
Develop Your Visionary and Innovative Skills
Growth Partnership Service Share your growth thought leadership...
20
Your Feedback is Important to Us
Growth Forecasts?
Competitive Structure?
Emerging Trends?
Strategic Recommendations?
O...
21
https://twitter.com/frostsullivansa
Follow Frost & Sullivan on Facebook, LinkedIn,
SlideShare, and Twitter
http://www.f...
22
For Additional Information
Samantha James
Corporate Communications
African Operations
+27 21 680 3574
Samantha.James@fr...
Upcoming SlideShare
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Chemicals Sector Future Growth Opportunities - Africa Must Be Part of Your Strategy

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Seven of the fastest growing economies in the world are in Africa. Frost & Sullivan's analyst team has tracked Mega Trends that drive growth in Africa. To understand how companies can tap into future growth opportunities, Frost & Sullivan looks at the macro-to-micro viewpoint and how it impacts the business community and personal lives of those living in Africa. This webinar investigates how chemical manufacturers, suppliers and distributors can take advantage of the growth opportunities in the chemicals & materials sector in Africa.

Key points discussed include:

· Mega Trends predicted five years ago and what has played out so far
· Evidence of the sectors the Mega Trends have affected, key product groups that have seen growth, and how chemicals companies have taken advantage and grown in Africa
· Case study of a Dow Chemical Company success story
· How Africa is aligned with its growth strategy and the future
· Mega Trends expected to drive growth in Africa in 2022
· Future growth predictions for Africa

Published in: Business
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Chemicals Sector Future Growth Opportunities - Africa Must Be Part of Your Strategy

  1. 1. Chemicals Sector Future Growth Opportunities Is Africa a Part of Your Strategy? Mani James, Operations Director, Africa Ross McLean, President, Dow Africa Chemicals, Materials, and Food 2 July 2014 © 2014 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of Frost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.
  2. 2. 2 Today’s Presenters Mani James Operations Director- Africa Frost & Sullivan, Africa Cape Town Functional Expertise • Over 13 years of management and strategy consulting experience, having worked for clients in North America, South East Asia, Asia Pacific and Africa.Particular expertise in: - Market assessment and analysis - Strategy creation and implementation - Market entry and expansion strategies - Customer analysis and segmentation - Competitive strategy - Solutions modeling and implementation Industry Expertise Experience base covering a broad range of sectors, working with senior executives to develop and implement strategies across a range of geographies, with particular expertise in: - Petrochemicals, bio-fuels, materials handling, food additives and chemicals in Africa - Industrial automation and supply chain management - Manufacturing Ross McLean President Dow Africa Johannesburg Ross McLean, is leader for Sub-Saharan Africa and oversees Dow’s growth and expansion across the region. Ross joined Dow in August 1997 as Finance Director of the South African agricultural chemicals division. Assuming the role of Regional Finance Director for Dow’s Africa operations in 2001, he later added the role of Country Leader and Managing Director for South Africa, to his responsibilities. During this period, Ross led several transactions to divest non-core assets in South Africa, managing successive organizational changes to realign the local team to support Dow’s ongoing business. Relocating to Dubai in 2006, Ross assumed responsibility for various business development projects in India and the Middle East while developing Dow’s market entry strategy for Africa. Ross has over 20 years experienced in chemicals and related industries. His career spans finance, general management, mergers & acquisitions and strategic development roles in South Africa, the United Kingdom and the United Arab Emirates.
  3. 3. 3 Focus Points 1. Occasion for the Analyst Briefing 2. Mega Trends: Then and Now 3. Case Study on DOW Chemical Company – Africa Story 4. Mega Trends: Fast Forward to 2022
  4. 4. 4 Poll Question 1 Which group of sub-Saharan African countries are anticipated to provide future growth opportunities after South Africa, Nigeria, Kenya, and Ghana? • Uganda, Tanzania, Ethiopia, and Rwanda • Mozambique, Angola, Tanzania, and Zambia • Rwanda, Uganda, Botswana, Ethiopia, and Namibia
  5. 5. 5 Agenda This analyst briefing: o Mega Trends in 2010 o Success story in Africa – Dow Africa o Mega Trends 2022 o Q & A Session
  6. 6. 6 Urbanisation: Then and Now Water and Wastewater Treatment Construction & Infrastructure (Chemicals) Urbanisation rates will continue to increase in all African regions 62% 50% 51% 24% 63% 50% 52% 25% Urbanisation as a % of Total Population: 2010 2014 Revenue Prediction in 2010 for 2013 Actual Revenues in 2013 South Africa $916.3M $855.0M Nigeria $241.2M $215.0M Kenya $88.6M $82.5M Revenue Prediction in 2010 for 2013 Actual Revenues in 2013 South Africa $174.8M $160.0M Kenya $73.2M $67.5M Nigeria $160.5M $155.0M South Africa Nigeria Ghana Kenya Revenue Prediction in 2010 for 2013 Actual Revenues in 2013 South Africa $19.7B $19.6B Nigeria $16.3B $16.0B Revenue Prediction in 2010 for 2013 Actual Revenues in 2013 South Africa $4.5B $4.4B Nigeria $273.4M $274.0M Kenya $106.5M $105M KeyDriversfor continuedgrowth Water and wastewater treatment growth to increase to achieve millennium development goals Urbanisation and growing middle income earners continue to drive demand for commodity products Materials – Packaging Oil & Gas – Petrochemicals Source: IMF, Frost & Sullivan
  7. 7. 7 2010 2010 2010 2010 Road Rail Electricity Airports Telecom 2013 2013 2013 2013 Road Rail Electricity Airports Telecom Infrastructure Development: Then and Now Road and rail = km per 1000 capita; Electricity = MW per 1000 capita; Airports and telecom per capita $XXBKenya ($B) Ghana ($B) South Africa ($B)Nigeria ($B) 15% Investment since 2010 to 2013 to $2.9B Investment since 2010 to 2013 to $1.5B 4% Investment since 2010 to 2013 to $6.5B 7% Infrastructure EfficiencyRanking 109 Ghana 135 Nigeria 1 148 102 Kenya 66 South Africa 6.4 4.5 25.4 15.2 84.6 64.2 Planned spend 2010-2013 Actual spend 2010-2013 10.7 5.9 Planned spend 2010-2013 Actual spend 2010-2013 Planned spend 2010-2013 Actual spend 2010-2013 Planned spend 2010-2013 Actual spend 2010-2013 Source: IMF, World Bank, PWC, Frost & Sullivan
  8. 8. 8 Sustainability: Then and Now Hydro Fossil Fuels (includes nuclear for SA Renewables 2010 2013 2010 2013 Kenya: Energy Mix Evolution South Africa: Energy Mix Evolution 2010 2013 Ghana: Energy Mix Evolution 2010 2013 Nigeria: Energy Mix Evolution 15% Kenya Agriculture yield by 2030 with a 2% GDP investment in a green economy 24% South Africa Increase crop yields by 2030 – investing in ecological practices Source: The Financial Times Limited, Frost & Sullivan Trillion cubic feet shale gas reserves in South Africa 468 Planned or possible investment in the US by chemicals companies to use shale gas $91B Reduction in price since 2011 for ethane in the US produced from shale feedstock >1/3
  9. 9. Sub-Saharan Africa … Lifting off EAST SOUTH WEST GDP Growth Population Growth FDI South West East Oil Ga s Strengths Weaknesses Opportunities Risks Gold Agricultur e Opportunities • Geographic Expansion • Renewables • Agriculture South West East Platinum
  10. 10. 10 Mega Trends: Fast Forward to 2022 Urbanisation and Infrastructure Development Energy Demand and Resource Drain Water and Food Scarcity Supply Chain Efficiencies Emerging African Economies
  11. 11. 11 Emerging African Economies • x South Africa Nigeria Kenya Ghana Indicator Angola Tanzania 2014 GDP ($ billion) 129.79 36.61 GDP Growth Rate (2015-2019) 5.6% 7.0% Manufacturing Size ($ million in 2012) 7,220.4 2,609.2 Ease of Doing Business (2014) 179/189 145/189 Indicator Zambia Mozambique 2014 GDP ($ billion) 24.85 17.35 GDP Growth Rate (2015-2019) 6.6% 7.8% Manufacturing Size ($ million in 2012) 1,723.6 *1,573.9 Ease of Doing Business (2014) 83/189 139/189 Source: IMF, World Bank, Frost & Sullivan* 2011 data Rwanda MATZ and RUBEN INTRODUCING...
  12. 12. 12 Poll Question 2 Have you identified the right distribution partners for your African Growth Strategy? • Yes • Not sure, time will tell • No, we are searching for alternatives
  13. 13. 13 Supply Chain Efficiencies—Major Trends Source: Frost & Sullivan Improve Integrate InvestKey Strategies:
  14. 14. 14 Supply Chain Efficiencies—Logistics Performance Index Source: World Bank, Frost & Sullivan Logistics Performance Index, Global, 2010 and 2014 Year Rank Score Angola 2014 112 2.54 2010 142 2.25 Tanzania 2014 138 2.33 2010 95 2.60 Zambia 2014 123 2.46 2010 138 2.28 Mozambique 2014 147 2.23 2010 136 2.29 Uganda 2014 - - 2010 66 2.82 Ethiopia 2014 104 2.59 2010 123 2.41 Namibia 2014 93 2.66 2010 152 2.02 Botswana 2014 120 2.49 2010 134 2.32 Rwanda 2014 80 2.76 2010 151 2.04 Growth of African Cities % increase, 2010- 2025 forecast 0 50 100 Cape Town Johannesburg Durban Cairo Casablanca Algiers Alexandria Douala Accra Ibadan Lagos Dakar Abidjan Addis Ababa Luanda Kinshasa Nairobi Dar es Salaam
  15. 15. 15 Urbanisation and Infrastructure Development—$28 billion will be invested in transport corridor development Road Rail Ports $9.2 billion $14.8 billion $3.5 billion Roads in good condition Western 72% Central 49% Eastern 82% Southern 100% Container dwell times (International standard: 7 days) Western 11-30 days Eastern 5-28 days Southern 4-8 days Freight transport by rail Western 11% Central 2% Eastern 2% Southern 85% Existing road networks will be rehabilitated and expanded to create nine Trans-African Highways Rail networks will be extended and upgraded to complement the Trans-African highways Capacity building at ports will decrease bottlenecks and support growth in trade and industry Ten transport corridors are being developed across the region to improve road and rail networks and increase port capacity Current State of Transport Infrastructure: *based on active projects in 2013 Source: World Bank; Frost & Sullivan
  16. 16. 16 Energy Demand and Resource Drain—African Trade Corridors: What is driving their development and why? C B Bauxite UraniumGold Copper Diamonds Oil Gas Timber KEY: Iron Ore Coal C CC CC C C B B B Is the Green Economy relevant to Africa? Source: EIA; Frost & Sullivan Angola: • Second-largest oil producer in SSA with 1.8 million barrels per day in 2013 • Second-largest volume of proved natural gas reserves in SSA in 2014 (9.71 trillion cubic feet) • First LNG plant opened in 2013 in Soyo Mozambique: • Contains 4.5 trillion cubic feet of proved natural gas reserves • First commercial crude oil production to take place in Inhassoro in 2014 Tanzania: • Produces small volumes (32.8 billion cubic feet in 2012) of natural gas for own use • Future export opportunities with offshore natural gas discoveries
  17. 17. 17 Water and Food Scarcity 2012 Global Hunger Index Level of Severity Angola 24.1 Alarming Tanzania 19.3 Serious Zambia 23.3 Alarming Mozambique 23.3 Alarming Uganda 16.1 Serious Ethiopia 28.7 Alarming Namibia 13.2 Serious Botswana 13.7 Serious Rwanda 19.7 Serious Source: IFPRI, Frost & Sullivan Increase in net food imports at constant prices in sub-Saharan Africa since 2000 (FAO).>60% Cereal yield (kg per hectare) vs. rate of developed countries Sub-Saharan African share of the global crop protection market 5% Fertilizers used per hectare (aim is 50kg) compared to 80kg, the world average. Soil degradation. Annual mineral nutrient loss ranges from 30kg to 60kg per hectare (Henao & Baanante). 75% 27% 9kg In Africa: Income from crop production Annual value of grain is lost postharvest 70% 15% Ageing infrastructure, water leakages Dam rehabilitation Treatment plants need to keep pace with urbanisation 1 3 4 5 2 Severity
  18. 18. 18 Key Take-Aways – Success factors in Africa Key Cash cow products in the broad range Strengthen e-commerce platforms Affordable product pricing Strong local Distributor partnerships Country and city specific strategy Regulatory and incentive policies by country Trusted brand & loyalty - Strong local presence Key Success Factors Aggressive product promotion “Do not judge me by my successes, judge me by how many times I fell down and got back up again” Nelson Mandela
  19. 19. 19 Next Steps Develop Your Visionary and Innovative Skills Growth Partnership Service Share your growth thought leadership and ideas or join our GIL Global Community Join our GIL Community Newsletter Keep abreast of innovative growth opportunities
  20. 20. 20 Your Feedback is Important to Us Growth Forecasts? Competitive Structure? Emerging Trends? Strategic Recommendations? Other? Please inform us by “Rating” this presentation. What would you like to see from Frost & Sullivan?
  21. 21. 21 https://twitter.com/frostsullivansa Follow Frost & Sullivan on Facebook, LinkedIn, SlideShare, and Twitter http://www.facebook.com/FrostandSullivan http://www.linkedin.com/companies/4506 http://www.slideshare.net/FrostandSullivan
  22. 22. 22 For Additional Information Samantha James Corporate Communications African Operations +27 21 680 3574 Samantha.James@frost.com Mani James Operations Director African Operations +27 21 680 3208 Mani.james@frost.com Avril Harvey Team leader Chemicals, Materials and Food +27 21 680 3283 Avril.Harvey@frost.com Danielle Kruger Strategic Account Manager Chemicals , Materials and Food +27 21 680 3262 Danielle.Kruger@frost.com

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