Executive Insights of the Future of African                               Chemicals        PUTTING MEGA TRENDS INTO PRACTI...
Today’s Presenters                           Mani James                                                         Carolyn Kr...
Focus Points1.   Occasion for the Analyst Briefing2.   Three of the Six African Mega Trends3.   Water Treatment and Sanita...
The Occasion for the Analyst Briefing                               This analyst briefing:                               o...
Opportunities in Africa                   Manufacturing:                      Energy:                    $204 billion     ...
Mega Trends Driving Sector Growth                                                                   Sectors               ...
Water Treatment and Sanitation in Africa
Water Treatment and Sanitation in Africa – Macro to Micro                       Increasing Urbanisation            Infrast...
Major Water Treatment and Sanitation Drivers and         Challenges (Current and Future)                       Great need ...
Public Sector Project Values and Major Companies                                               Water and Wastewater Treatm...
Water Treatment and Sanitation—Locating Opportunities   AfDB has agreed to fund 70% of the finance required    for two was...
Construction / Infrastructure in Africa
Construction / Infrastructure in Africa – Macro to Micro                      Increasing Urbanisation           Infrastruc...
Major Construction Drivers and Challenges         (Current and Future)                       Need for investment in public...
Infrastructure Chemicals and Materials Market & Decorative and Industrial Coatings Market                                 ...
Construction—Locating Opportunities     South Sudan requires more than $5 billion for 32,000        km to enable the count...
Conclusions and Growth Challenge
Conclusion       Africa Opportunity Focus – Water Treatment & Sanitation, Construction & Infrastructure1.   Increasing urb...
Are you geared up for growth in the water and                                                                             ...
Next StepsDevelop Your Visionary and Innovative Skills       Growth Partnership Service                      Share your gr...
Your Feedback is Important to Us          What would you like to see from Frost & Sullivan?Growth Forecasts?Competitive St...
Follow Frost & Sullivan onFacebook, LinkedIn, SlideShare, and Twitter            http://www.facebook.com/FrostandSullivan ...
For Additional InformationChristie Cronje               Carolyn KrynauwCorporate Communications      Research AnalystAfric...
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Executive Insights of the Future of African Chemicals

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Executive Insights of the Future of African Chemicals

  1. 1. Executive Insights of the Future of African Chemicals PUTTING MEGA TRENDS INTO PRACTICE – MICRO TRENDS THAT DRIVE OPPORTUNITIES IN WATER AND CONSTRUCTION SECTORS Mani James, Regional Director Carolyn Krynauw, Research Analyst Chemicals, Materials and Food 15 May 2012© 2012 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property ofFrost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.
  2. 2. Today’s Presenters Mani James Carolyn Krynauw Regional Director - Africa Research Analyst Frost & Sullivan Frost & Sullivan Africa Africa Cape Town Cape TownFunctional Expertise Functional Expertise• Over 13 years of management and strategy consulting • Three years of experience in market research and consulting, experience, having worked for clients in North America, South with particular expertise in: East Asia, Asia Pacific and Africa.Particular expertise in: - Analyzing market trends and data in the retail and - Market assessment and analysis chemicals, materials and food industries - Strategy creation and implementation - Market segmentation and assessment - Market entry and expansion strategies - Presenting findings and interacting with top executives - Customer analysis and segmentation Industry Expertise - Competitive strategy Experience base that covers various sectors, including: - Solutions modeling and implementation - African Mega TrendsIndustry Expertise - Agriculture Experience base covering a broad range of sectors, working - Chemicals (home and personal care, food and beverage with senior executives to develop and implement strategies detergents) across a range of geographies, with particular expertise in: - Materials (renewable energy) - Petrochemicals, bio-fuels, materials handling, food additives - Retail (FMCG) and chemicals in Africa - Industrial automation and supply chain management - Manufacturing 2
  3. 3. Focus Points1. Occasion for the Analyst Briefing2. Three of the Six African Mega Trends3. Water Treatment and Sanitation in Africa4. Construction / Infrastructure in Africa5. Conclusions and Growth Challenge ` 3
  4. 4. The Occasion for the Analyst Briefing This analyst briefing: o Macro to micro viewpoint o Market drivers and challenges o Business opportunities in Africa How you will benefit: o Gain through involvement in Africa o Opportunities presented by PPPs o Challenge your current growth strategy o Interactive Q & A session 4
  5. 5. Opportunities in Africa Manufacturing: Energy: $204 billion $800 billion Manufacturing, food packaging Electricity infrastructure, and fortification. renewable energy, rehabilitation of existing Infrastructure Development: structures >US$400 billion Transport infrastructure and Agriculture: US$50 billion rehabilitation, housing, ICT, building and Includes fertilizers, crop other materials, construction and PPE protection, animal health, feed and additive products, and plant biotechnology. Oil & Gas: US$3.6 trillion Infrastructure, extraction chemicals, and rehabilitation Africa – The Summary Water: US$700 billion Includes sanitation, water infrastructure and chemicals, renewable water, and water and wastewater treatment. Source: Frost & Sullivan analysis. 5
  6. 6. Mega Trends Driving Sector Growth Sectors Water Focusing on Three of the Six Mega Trends Treatment Infrastructure Construction and SanitationIncreasing UrbanisationPublic/Private Sector Investment to Drive IndustryDevelopmentSustainable DevelopmentInfrastructure DevelopmentHealth and SafetyRebuilding War-torn Countries Source: Frost & Sullivan analysis. 6
  7. 7. Water Treatment and Sanitation in Africa
  8. 8. Water Treatment and Sanitation in Africa – Macro to Micro Increasing Urbanisation Infrastructure Development Sustainable Development Lack of Supply, Ongoing Maintenance, Reliable Water and Wastewater Treatment Demand > supply Limits industrial development Impact of climate changeBusiness Economy Catchment area problems Leaking and water wastage Non-compliance with treatment Increased health expenditure Unsanitary water treatment regulations or the lack thereof Uncertain water usage rights Limited treatment technology Unreliable access and low quality Higher production costs Changing water availability Reduction in industrial Limits competitiveness Higher production costs productivity The Gaps The Opportunities Construction Water of plants Distribution PPP & Ongoing Technology Manage- (treatment / of Skill maintenance Transfers ment desalination) potable water Transfer Contracts Infrastructure Innovative or Water Construc- Infrastructure and water- Alternative alternative Treatment tion upgrades related Systems solutions Chemicals Chemicals chemicals Source: Frost & Sullivan analysis. 8
  9. 9. Major Water Treatment and Sanitation Drivers and Challenges (Current and Future) Great need for water treatment and sanitation Scarcity of water in some regions of Africa drives the demandMarket Drivers for water reuse Drive to reach the millennium goals Governments are recognising the benefits of PPPs Lack of adequate enforcement of water regulationsMarket Challenges Lack of local skills and knowledge Problems obtaining tenders Increasing population and need for water infrastructure maintenance Source: Frost & Sullivan analysis. 9
  10. 10. Public Sector Project Values and Major Companies Water and Wastewater Treatment Water and Wastewater Treatment South Market, South Africa, 2010 and 2015 Ghana Market, Ghana, 2010 and 2015 Revenue ($ Million) Africa 250 140 Revenue ($ Million) 218.5 122.8 200 182.2 120 Major Suppliers: Major Suppliers: 100• Süd-Chemie 150 • Nalco (Ecolab) 80 79.4 100 78.2 93.5 2010 60 (Clariant) • Süd-Chemie 2010 40• NCP Clorchem 50 2015 (Clariant) 5.5 7.3 2015 20• Buckman 0 • Hiss Ghana Ltd 0• Improchem Water Wastewater • Senmin Water Wastewater Treatment Treatment Treatment Treatment• Zetachem • Vinmar Ghana Water and Wastewater Treatment Water and Wastewater Treatment Kenya Market, Tanzania, 2010 and 2015 Market, Kenya, 2010 and 2015 Tanzania Revenue ($ Million) 127.9 120 140 105.1 Revenue ($ Million) 120 43.3 100 94.6 82.7 100 80 80 60 Major Suppliers: 60 Major Suppliers: 33.2 2010 31.5 2010 40 27.1• Wotech Kenya 40 • Nalco (Ecolab) 2015 2015 20 Limited 20 • Süd-Chemie 0 0• Kel Chemicals (Clariant) Water Wastewater Water Wastewater• Improchem Treatment Treatment • Marshall Flower Treatment Treatment Source: Frost & Sullivan analysis. 10
  11. 11. Water Treatment and Sanitation—Locating Opportunities AfDB has agreed to fund 70% of the finance required for two wastewater purification projects in Morocco. Tunisia has received $42 million from The total cost is estimated at $39 million. the AfDB to rehabilitate 30 wastewater treatment plants and to increase the AfDB is interested in financing supply of treated water per year. the preparation and implementation of the In East Africa, the effectSogakope-Lome Transboundary of climate change is Water Supply Project between expected to have a Ghana and Togo. negative impact on water availability. The AfDB has approved a US$100 million loan to rehabilitate, construct, and ` BP Angola will finance a expand water and sanitation facilities in US$400 000 project to Zaria (city in northern Nigeria). provide rural communities in Huambo and Bié with potable Operation and maintenance of water (20 boreholes will be Tweefontein and Emfuleni Wastewater constructed in 18 months). Treatment Plants ($11.4 million project over 5 years) Source: Frost & Sullivan analysis. 11
  12. 12. Construction / Infrastructure in Africa
  13. 13. Construction / Infrastructure in Africa – Macro to Micro Increasing Urbanisation Infrastructure Development Sustainable Development Lack of Housing, Energy, Roads, Communication, and Water Demand > supply Limits industrial development Need for renewable energyBusiness Economy General overcrowding Lowers economic income Depletion of natural resources Negative impact on tourism Limits FDI Negative impact on regional trade Reduced business activities Higher production costs Need more skilled labour Unhealthy workforce Limits competitiveness High initial costs Acceptance The Gaps The Opportunities Formal Ongoing PPP & Lack of Paints & Building construction maintenance Skill skills Coatings Materials Transfer Green Innovative Infrastructure Construc- Fibre Local building solutions upgrades tion Optic Manufac- materials Chemicals Cables turing Source: Frost & Sullivan analysis. 13
  14. 14. Major Construction Drivers and Challenges (Current and Future) Need for investment in public infrastructure development and construction (housing, all-season roads, and energy plants)Market Drivers Low-cost solutions in Africa Ambitious economic targets Governments are recognising the benefits of PPPs Inability of governments to finance necessary constructionMarket Challenges projects The lack of integrated transport routes Dilapidated and outdated infrastructure Source: Frost & Sullivan analysis. 14
  15. 15. Infrastructure Chemicals and Materials Market & Decorative and Industrial Coatings Market Infrastructure Chemicals and Revenue ($ Million) Materials Market, South Decorative Coatings South Africa, 2010 and 2015 Market, East Africa, 2010 and Africa 600 East Africa 2015 Revenues ($ Million) 416.8 453.6 400 100 88.1 Major Suppliers: 200 71.9• Plascon 0 Major Suppliers:• Dulux • Crown Berger 50 2010 2015• a.b.e Sales Breakdown: • Basco Paints Construction Coatings (63.6%) 0 • Sadolin Paints Chemicals 2010 2015 Thermal insulation material (23.7%) • Regal Paints• BASF Waterproofing material (9.3%)• Dow Sealants & grouts (3.4%) Infrastructure Chemicals and Materials Market, Kenya, 2010 Industrial Coatings Revenue ($ Million) Kenya and 2015 Market, East Africa, 2010 and 80 75.1 East Africa 2015 62.6 60 15 Revenues ($ Million) 40 11.7 Major Suppliers: Major Suppliers: 9.5 20 10• Sika • Sadolin Paints 0 5• BASF • Kiboko Paints Construction 2010 2015 Sales Breakdown: • Insignia 0 Chemicals Coatings (62.1%) • BPC Chemicals 2010 2015• Kenbro Waterproofing material (31.2%) • Crown Berger• Mau West Sealants & grouts (6.7%) Source: Frost & Sullivan analysis. 15
  16. 16. Construction—Locating Opportunities South Sudan requires more than $5 billion for 32,000 km to enable the country to be fully networked Ethiopia is going to construct hydropower plants in the basin of the Blue Nile River to Uganda has a housing generate 5500MW. deficit of more than Estimated completion: 2017700,000 units. 60% of the urban population live in informal settlements. Despite significant delays, Tatu City and Konza ` City (outside Nairobi, Kenya) Central Africa (darker blue countries) are expected to be built at an have the worst infrastructure in Africa. estimated $3 billion and $14 Less than 20% of roads are asphalted. billion, respectively. However, significant hydro-power potential exists. Source: Frost & Sullivan analysis. 16
  17. 17. Conclusions and Growth Challenge
  18. 18. Conclusion Africa Opportunity Focus – Water Treatment & Sanitation, Construction & Infrastructure1. Increasing urbanisation, infrastructure development, and sustainable development impact multiple sectors and need to be examined carefully to optimally develop medium and long term business strategies in current and new African markets.2. Gaps are certainly evident in both the water and construction sectors and businesses would do well to rethink strategy to incorporate the African market.3. This can be done by developing a strategy to (a) analyse and (b) understand how Africa can play a role in your future growth strategies.4. However, businesses need to acknowledge that Africa is a unique segment of the global market that requires a different business model to tap into relevant opportunities.5. PPPs provide access to markets and enable skill and technology transfers. Source: Frost & Sullivan analysis. 18
  19. 19. Are you geared up for growth in the water and Chemicals, Materialsconstruction industries? & Food BusinessDegree of Impact on the African Economy High Are you willing to customise? Customised solutions May lead to more customised solutions to differentiate from Product porfolio competitors...have you Physical Proximity differentiation considered this? More global chemical Africa as a low cost companies locating to Africa manufacturing hub Where would you South Africa‘s place: dominance challenged Consumer focus – Not if, but when... Customer‘s customer Delve Downstream Low Low Degree of Certainty High Source: Frost & Sullivan analysis. 19
  20. 20. Next StepsDevelop 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
  21. 21. Your Feedback is Important to Us What would you like to see from Frost & Sullivan?Growth Forecasts?Competitive Structure?Emerging Trends?Strategic Recommendations?Other? Please inform us by “Rating” this presentation. 21
  22. 22. Follow Frost & Sullivan onFacebook, LinkedIn, SlideShare, and Twitter http://www.facebook.com/FrostandSullivan http://www.linkedin.com/companies/4506 http://www.slideshare.net/FrostandSullivan http://twitter.com/frost_sullivan 22
  23. 23. For Additional InformationChristie Cronje Carolyn KrynauwCorporate Communications Research AnalystAfrica Chemicals, Materials and Food(+27) 21 680-3566 (+27) 21 680-3211Christie.Cronje@frost.com Carolyn.Krynauw@frost.comMani James Vassilissa KozoulinaRegional Director Account ManagerGrowth Partnership Services Chemicals, Materials and Food+27 21 680-3208 +27 21 680-3279Mani.James@frost.com Vassalissa.Kozoulina@frost.com 23

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