africa on the move - mega trends driving growth
TRANSCRIPT
Africa on the Move - Mega Trends Driving Growth
Mani James, Regional Director
Dilshaad Booley, Research Analyst
Chemicals, Materials & Food
13th September, 201113 September, 2011
Today’s Presenter’s
Mani James, Regional Director
Frost & Sullivan
Over 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
2
- 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
Agenda
1. Global Mega Trends – Brief Recap
2. Africa – The Source of Real Future Growth
3. Mega Trends Driving Growth in Africa
3
3. Mega Trends Driving Growth in Africa
4. Sectors in Africa that Would Present the Most Opportunities
5. Conclusion : Unlocking the Opportunities
Definition of a Mega Trend
What is a Mega Trend? Impact of Mega Trends on Key
Organisational Functions
Mega Trends are global, sustained
and macro economic forces of
development that impact business,
Marketing and Strategy
R&D Budget Innovation
4
development that impact business,
economy, society, cultures and
personal lives thereby defining our
future world and its increasing pace
of change
R&D Budget Spending
Product Planning and Development
TechnologyPlanning
InnovationScouting
Top Global Mega Trends
Mega CityMega RegionsMega CorridorsSMART Cities and SMART Infrastructure
Mega CityMega RegionsMega CorridorsSMART Cities and SMART Infrastructure
Gen Y PopulationWomen Empowerment and Women CEOsPower to the Middle Class Reverse Brain Drain and CXO Positions inDeveloping EconomiesGeo Socialization
Gen Y PopulationWomen Empowerment and Women CEOsPower to the Middle Class Reverse Brain Drain and CXO Positions inDeveloping EconomiesGeo Socialization
UR
BA
NIZ
AT
ION
SO
CIA
L
Future Global Power GenerationInnovating to Zero ! : Zero EmissionTechnologies
Future Global Power GenerationInnovating to Zero ! : Zero EmissionTechnologies
Electric Vehicles Electric AircraftsElectric Vehicles Electric Aircrafts
EN
ER
GY
E-M
OB
ILIT
YIN
FR
AS
TR
UC
TU
RE
5
Geo SocializationGeo Socialization
Beyond BRIC: The Next Game ChangersNew Shores: Emerging Outsourcing HotspotsFuture Global 500 Companies by RegionNew Trade Zones
Beyond BRIC: The Next Game ChangersNew Shores: Emerging Outsourcing HotspotsFuture Global 500 Companies by RegionNew Trade Zones
SMART Clouds: The Next in Cloud ComputingSPACE JAM: Future of SatellitesVirtual WorldRoboSlavesFuture Consumer ElectronicsWireless IntelligenceFuture Broadband ApplicationsInnovative Technologies of the Future
SMART Clouds: The Next in Cloud ComputingSPACE JAM: Future of SatellitesVirtual WorldRoboSlavesFuture Consumer ElectronicsWireless IntelligenceFuture Broadband ApplicationsInnovative Technologies of the Future
EC
ON
OM
YT
EC
HN
OLO
GY
Future Investment in Infrastructure : Power, Water and Transport Emerging Transportation Corridors
Future Investment in Infrastructure : Power, Water and Transport Emerging Transportation Corridors
New Business Models New Business Models
Fit or Fat?: Health, Wellness and WellBeingFit or Fat?: Health, Wellness and WellBeing
INF
RA
ST
RU
CT
UR
EB
US
INE
SS
HE
AL
TH
&
WE
LL
NE
SS
The BIG Global Picture – Game Changers Beyond 2020
China: $8 Trillion
Russia: $7 Trillion
Egypt:
Turkey: $790 Billion
Poland: $650 Billion
Algeria GDP: $310 billion
6
India: $4.5
Trillion
Brazil: $2.7 Trillion
Egypt: $490 Billion
Mexico: $1.5 Trillion
Indonesia: $800 Billion
The Philippines: $250 Billion
BRIC Countries
Next Game Changers includes: Mexico, Argentina, Poland, Egypt, Turkey, Indonesia, Philippines, Vietnam
Vietnam: $175 Billion
Note: The figure denotes GDP at market prices
South Africa: $555.5 Billion
Nigeria GDP: $510.5 billion
Angola GDP: $201
billion
$310 billion
Other Emerging Countries (Africa)
1.Urbanisation
2.Regional Integration
3.Connecting the Unconnected
4.Innovation to Zero
African Mega Trends
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4.Innovation to Zero
5.Renewable Power
6.New Business Models
7.The Responsible Revolution
8.Future Infrastructure
Energy: $800 billion
Electricity infrastructure,
renewable energy,
rehabilitation of existing
structures
Agriculture: US$50 billionIncludes fertilizers, crop
protection, animal health, feed
Infrastructure Development: >US$400 billion
Transport infrastructure and
rehabilitation, housing, ICT,
building and other materials,
construction and PPE
Manufacturing: $204 billionManufacturing, food packaging
and fortification.
Africa – Did you Know?
8
Africa – The Summary
Water: US$700 billionIncludes sanitation,
water infrastructure and
chemicals, renewable
water, and water and
wastewater treatment.
Oil & Gas: US$3.6 trillionInfrastructure, extraction
chemicals, and
rehabilitation
protection, animal health, feed
and additive products, and
plant biotechnology.
Understanding the Role of Mega TrendsDifference between what & why of customer wants , responding to opportunities & threats
Increasing Urbanisation
Visionary
Health & SafetySustainable Development
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Infrastructure Development
Innovation
&
Market
Vanguard
Public / Private Sector
Investment to Drive Industry Development
Rebuilding War Torn Countries
Mega Trends Driving Sector Growth
Mega Trends
Sectors
Ag
ricu
lture
Infra
stru
ctu
re
Ma
teria
ls
Oil a
nd
Ga
s
Re
ne
wab
le E
ne
rgy
Min
ing
Co
ns
um
er
Pro
du
cts
Wa
ter T
rea
tme
nt
an
d S
an
itatio
n
Co
ns
truc
tion
Increasing Urbanisation
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Increasing Urbanisation
Public/Private Sector Investment to Drive Industry Development
Sustainable Development
Infrastructure Development
Health, Wellness and Safety
Rebuilding War-torn Countries
Unlocking the Opportunities Presented by Mega Trends
Where are the
Why is Africa the next big
opportunity for chemicals and
How can you adapt your
strategies to tap into this massive opportunity Africa
presents?
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What are the key Mega Trends that
would drive business for
chemicals and materials
companies in Africa?
When can you expect to see the impact of micro trends on the
business environment?
Where are the key opportunities
that would manifest in Africa
by 2020?
chemicals and material
suppliers?
o Water abstraction
o Water and wastewater treatment
plants
o Water distribution
o Renewable water
Water Treatment and Sanitation1
34
5
2
Impact
40% of Africans lack access to safe drinking water
60% of Africans lack access to basic sanitation
Central African Republic: Project worth $15.5 million to provide access to drinking water
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`̀
South Africa: $189 million required for water infrastructure and maintenance
Renewable Water
US$10 billionaverage annual
investment
60% of Africans lack access to basic sanitation
DRC: >50% of African water reserves, but 74% of population have no access to safe drinking water. Requires rainwater harvesting systems.
2 million children die from diarrhea every year due to poor sanitation and drinking water.
Water Infrastructure &
TreatmentUS$22 billion
required to upgrade Africa’s water infrastructure
Water and Waste Water Treatment
ChemicalsUS$1.06 billion total
market for 8 major sub-Saharan African
Regions
Africa has enough water
endowment for the entire continent
Renewable Energy
DRC
Kenya
EgyptMorocco
150 MW
500 MW
7.2 GW by 2020
140 MW (natural gas solar plant)
(10,000MW)
o Wind power
o Solar power
o Hydropower
2000kWh of energy per square metre
Africa requires 7,000 MW of new power-generation capacity annually
1
34
5
2
Impact
13
`̀
DRC
Wind projects
Solar thermal projects
52 turbines (39,000 MW)
2000kWh of energy per square metre per year hitting more than 80% of Africa’s landscape
0.5%: Africa’s share in wind energy production>60,000MW hydropower plants planned
Renewable Energy
>US$238 billon investment by
2020
Hydropower$560 Million
Cost of materials to construct 4000MW
hydropower plants
Across Africa:
Of the US$3.6 billion investments in renewable energy in 2010, 73.8% went to Egypt and Kenya.
$8 billion for hydropower storage.
Africa uses 20% of potential hydropower
Wind Energy$3.0 Billion
cost of material for the 3000MW African
potential
Agriculture
o Crop protection
o Fertilizers
o Plant biotechnology
o Bio-fuels
1
34
5
2
Impact
90% of agriculture depends on rain – need water pumping systems to improve irrigation
Ethiopia: The Ethiopia, Fertilizer Support Project allocated $1.3 million in 2010 for the import of fertilizers.
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Agriculture>US$7.6 billion
investment opportunity
25% of livestock die annually due to preventable animal diseases in Africa
5% Sub-Saharan African share of the global crop protection market
Crop Protection> US$2 billion
(projected value of the market in sub-Saharan Africa by
2020)
Animal Feed & Additives
Up to US$40 billion
(Opportunity in Africa by 2020)
FertilizersUS$5 billion
(increase fertilizer use from 9kg per hectare to 15kg)
Currently using plant biotechnology (incl. field trials)
War torn countries under-utilising fertilizer
African countries under-utilising fertilizer
`̀
Oil & Gas and Mining
o Oil & Gaso Miningo Downstream
75% of the chemicals for the oil and gas sector in Africa are imported.
< 5% of crude oil refined in Africa
Chad
DRC
Somalia
North & South Sudan
Liberia
Burundi
Ethiopia: 25 billion cubic metres of natural gas reserves
1
34
5
2
Impact
15
Oil & GasUS$130 billion
investment opportunity in infrastructure
Oil & GasUS$3.5 trillion
demand for extraction chemicals by 2020
`̀
Exporters Producers
Oil
Potential Oil Producers
Gold Producers
Diamonds
Nigeria: to spend $1billion on oil exploration in Chad, Gongola, Sokoto and Anambra Basins from 2011-2015
Uganda/Kenya: Possible construction of a $1.5 billion 806-mile oil pipeline from Uganda to Kenya
Average oil and gas contribution to GDP for the majority oil producers countries in Africa66.6%
$15 billion private investment
for Nigeria to develop its gas industry to full capacity
82% of the world’s production of PGM’s comes from Africa
Construction and Infrastructure
o Construction
o Road and Rail Infrastructure
1
34
5
2
Impact
30 % of the rural population in Sub-Saharan Africa has access to all-season roads.
Egypt attract $7.3bn in construction (by 2015), with cement demand growth of 9% to 2015 across Africa
East Africa : Construction boom to increase demand for steel and cement over 5
Liberia: $18.5 million project to rebuild universities
16
Transport Infrastructure
US$ 300 billion in road and rail infrastructure
upgrading
Road MaintenanceUS$26 billion just to maintain existing paved
roads
`̀years
Low-cost , light weight housing development in Rwanda – banana , sisal fibre, volcanic cinders
27% of Trans-African Highway system in good condition
rebuild universities and infrastructure
Republic of South Sudan:
$500+ billion for roads, bridges, refineries and
pipelines
Sudan: 80-90% of dwellings are made of straw, cow dung and mud and need periodic replacement
Paints and Coatings
>US $2 billion
Manufacturing and Materials
o Raw Materials
o Manufacturing
o Plastics Packaging
o Building Materials
1
34
5
2
Impact
Manufacturing in Africa is: 49% resource-based, 31% medium-high technology, 20% low technology
Kenya: informal manufacturing enterprises account
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Collective GDP in 2020 is expected to be $2.6 trillion, with $1.4 trillion consumer spending in 2020
Manufacturing>US$200 billion (Manufacturing is roughly 10.5% of
Africa’s GDP)
`̀enterprises account for about 83% of total manufacturing employment
Materials>US$8.6 billion
Investment
Food Packaging & Fortification
US$3.8 billion investment
Low cost government housing to increase by 30% -main requirement of composite materials
Building materials: $15 billion
Engineering plastics:
$ 100 million
Are you Geared up for Growth?
Physical Proximity
Customised Solutions
South Africa‘s Dominance Challenged
Chemicals, Materials
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Delve Downstream
Product Porfolio Differentiation
Consumer focus –Customer‘s Customer
Africa as a Low Cost Manufacturing Hub
More Global Chemical Companies Locating to
Africa
Chemicals, Materials & Food Business
Three Phased Approach to Identify Emerging Opportunities: Robust Methodology to Evaluate Top Mega Trends and Short list the Most Relevant to Company X’s Business
MT
MT MT MT
MT
MT
MT MT MT
MTMT
Phase 1
� Mega Trends
Presentation or
Workshop is the First
Step
Short list Top 10-15 Mega Trends Which Provide Most Opportunity/Impact to Company
• Short-list 10 most relevant Mega Trends to Company X and create a short profile of each MT
• Prioritize the 5 most relevant MTs for Company X and conduct a top level assessment of these MTs to Company X
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MT
Phase 2
Phase 3
MT MT
MT MT
Final output : Defined short list of the 4 or 5 most market attractive, easy to implement and high ROI
Mega Trend opportunities
• Conduct a detailed assessment of these MTs to Company X with a follow-up workshop or consulting assignment
• Develop tactical business plan and implementation strategy
• Develop a monitoring, evaluation, and optimization strategy
� Detailed Assessment
(Phase 2) and Tactical
Business Plan (Phase
3) Can Take the Form
of Consulting
Engagement or Follow
Up Workshops
Conclusion
Africa Opportunity Focus – Water Treatment & Sanitation, Agriculture, Oil & gas, Mining, Renewable
energy, Construction & Infrastructure, Manufacturing, Consumer products & Materials
1. Mega Trends impact multiple industries and need to examined carefully to optimally develop
medium and long term strategies in current and new markets
2. It is important to understand the eco-system of the Mega Trend, possible convergence and the
elements of the value chain which have most profitability
3. All these trends are global and have global ramifications thereby offering scalable opportunities
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3. All these trends are global and have global ramifications thereby offering scalable opportunities
4. These forces are changing rapidly and bringing new competencies
into play at half the life-cycle speed of the past decade
5. Organisations’ need “Mega Trend” champions and teams within
their organisation structure to best exploit the opportunities
6. 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
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. ([email protected])
� Join us at our annual Growth, Innovation, and Leadership 2012: A Frost & Sullivan Global Congress on Corporate Growthoccurring 15 – 16 May, 2012 (www.gil-global.com)
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Samantha James
Corporate Communications
Africa
+27 18 468 2315
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Regional Director
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