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Business in Africa Pays: Nigeria Hitachi 2014

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Presentation slides from Steve Murphy's keynote speech at Business in Africa Pays: Nigeria 2014. Mr Murphy explains how Hitachi, a company that is responsible for 82% of the worlds IT infrastructure, is making inroads to Nigeria.

You can watch a video of Steve's presentation here: http://businessinafricapays.com/steve-murphy-keynote-speech-at-business-in-africa-pays-nigeria-2014/

Published in: Economy & Finance, Business
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Business in Africa Pays: Nigeria Hitachi 2014

  1. 1. NIGERIA: A WORLD OF OPPORTUNITY STEVE MURPHY VICE PRESIDENT UK & Ireland Emerging Markets EMEA 1
  2. 2. WHO IS MURPHY ?  Steve Murphy ‒ Scottish ‒ Married 24 years ‒ 3 daughters (22, 20, 19) ‒ 7th year at HDS  7 years at Oracle Technical & Sales  7 years at Sun Sales Director  5 years at EMC EMEA VP Software  2 years at HP UK GM  7 year at HDS RVP Emerging Markets
  3. 3. HITACHI LIMITED • Established in 1910 in Hitachi city, Japan • Japan’s biggest producer of electronics • Employs more than 360,000 • Operates in multiple industries including supply of semiconductors, medical equipment, construction machinery, trains and power stations • Ranked number 5 in terms of number of US patents held • Annual revenues exceed 100 billion dollars
  4. 4. HITACHI DATA SYSTEMS • Headquartered in Silicon Valley, California • Hitachi’s focal point for the sale of its enterprise computer equipment including computer servers, data storage systems, software and consulting services • Conducts business through direct and indirect channels in over 170 countries • Sells to both private and public customers • 82 of the Fortune Global 100 companies use Hitachi Data Systems’ equipment
  5. 5. EMERGING – WHO WE ARE! Population 1.2 billion Five Major Branches (J’burg, Dubai, Istanbul,, Warsaw, Prague) Area: 50 Million Km2 Growing & Profitable 21+ major languages 12 HDS office locations Operational across 50+ countries 300 employees 18+ major currencies 3 Major Regions 4 Time Zones (Africa, Middle East & Turkey, Central & Eastern Europe) Total # of customers: 900+ $150 Million Turnover
  6. 6. WHAT HEADLINES DO I SEE WHEN I THINK ABOUT NIGERIA?
  7. 7. WOULD YOU INVEST IN THE BRICS COUNTRIES? OF COURSE YOU WOULD! Country Population Growth 2011 Growth 2012 Growth 2013 (est) Brazil 194m 2.7% 0.9% 2.9% Russia 142m 4.3% 3.4% 2.3% India 1.13bn 6.3% 3.2% 5.7% China 1.33bn 9.3% 7.8% 7.7% South Africa 52m 3.5% 2.5% 2.5% (World Bank statistics)
  8. 8. BUT WHAT ABOUT NIGERIA… Country Population Growth 2011 Growth 2012 Growth 2013 (est) Brazil 198m 2.7% 0.9% 2.9% Russia 143m 4.3% 3.4% 2.3% India 1.2bn 6.3% 3.2% 5.7% China 1.3bn 9.3% 7.8% 7.7% South Africa 51m 3.5% 2.5% 2.5% Nigeria 168m 7.4% 6.6% 6.7% (World Bank statistics)
  9. 9. INSERT NEWSPAPER HEADLINES ABOUT NIGERIA’S POTENTIAL
  10. 10. WHAT HEADLINES DO MY LAWYERS SEE?
  11. 11. AND LOOK AT THESE NUMBERS FOR NIGERIA!  Fourth fastest growing economy in the world from 2001-2011 (IMF)  Economy of Lagos is as big as the economy of Kenya  Predicted to overtake South Africa to become Africa’s biggest economy by 2015, 2020 or 2025 (depends which newspaper you read!)  GDP per capita doubled from 2000 to 2012  Tenth largest proven petroleum reserves in the world and Africa’s leading oil producer  Nigeria is the most lucrative telecoms market in Africa with growth at twice the African average  Nigeria is the second biggest market for Guinness in the world having overtaken Ireland in 2007 and expected to overtake the UK to become the biggest next year!
  12. 12. SO WHY DO MY LAWYERS HAVE CONCERNS? The world as seen by the International Monetary Fund (source Real GDP growth, IMF Data Mapper)
  13. 13. CORRUPTION AROUND THE WORLD The world as seen by Transparency International (source TI Corruption Perception Index November 2012)
  14. 14. GLOBAL ECONOMIC GROWTH V GLOBAL RISK
  15. 15. WHAT DO MY LAWYERS SEE?
  16. 16. SO WHY BOTHER? • Nigeria has strong historical, language and constitutional ties with the UK • Nigeria is the UK’s 31st largest overseas market • It was the second largest African market for UK goods last year • UK companies as diverse as Diageo, Shell, Unilever, Cadbury, Standard Chartered, Blue Circle and British Airways are already resident in the country • There are investment incentives in the form of Free Trade Zones and reduced tax rates • Availability of established professional services support from local lawyers, accountants and consultants • Nigeria is in a position to build a highly prosperous economy aided by high oil prices
  17. 17. OPPORTUNITIES IN NIGERIA According to the UK Trade and Investment department of the UK government there are major export opportunities in the following industries: • Oil and gas • Agriculture • Mining and mineral processing • Power • Communications • Film industry (Nigeria’s film industry is the 3rd largest in world) And UKTI also believe there is a lot of potential in healthcare, finance, ICT and construction and infrastructure.
  18. 18. HITACHI DATA SYSTEMS AND NIGERIA  We bought our African reseller, Shoden Data Systems, last year  Prior to the acquisition HDS had no direct presence in Africa. Hitachi Limited however had a number of other business established in Africa  We primarily bought Shoden because of the strength of the South African business but we saw the potential in the subsidiaries particularly Nigeria  We do not sell directly to Nigerian endcustomers but through partners Ghana Kenya Nigeria Uganda Tanzania
  19. 19. CONCERNS IN NIGERIA • International laws such as the US Foreign Corrupt Practices Act, the UK Bribery Act and export control laws may apply to business conducted in Nigeria • Sanctions are severe for companies and individuals breaching these laws • Security concerns • High youth unemployment • Power instability • Infrastructure problems
  20. 20. MY RECOMMENDATIONS FOR DOING BUSINESS IN NIGERIA • Choose your partners carefully and conduct full due diligence on potential distributors, resellers and agents plus make sure you put comprehensive contracts in place with anti-corruption clauses • Conduct full due diligence when conducting government business in terms of who is in the supply chain of the goods and payments for the goods • Check home country laws to see what they say about foreign country investments • If the business involves the use of foreign technology then you need to register the technology with the relevant • Get to know your business partners and customers – relationships are important in Nigeria so you need to get to know who you are working with
  21. 21. MY PERSONAL VIEW OF THE PEOPLE…….. • Nigerian culture, is very polite so remember that a Nigerian will not want to say no out of respect for you • Remember that Nigerians like to bargain and you should expect to bargain and compromise at the negotiating table • At the start of a business discussion the conversation may veer towards personal questions such as questions about your family and interests. It is a sign of warmth and respect • The handshake is an important part of the meeting. Again it is a sign of warmth and respect – don’t be in a hurry to pull your hand away! • Appoint and use established local advisors particularly accountants and lawyers.
  22. 22. AND FINALLY • Invest In Nigeria • Enjoy The Country • Be Careful • Keep Going Back
  23. 23. THANK YOU

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