UNCLASSIFIED

AFRICA- Size Context

3

UKTI East Africa

•UKTI East Africa is made up of 4 relatively

similar markets:

Kenya, Uganda, Tanzania and Ethiopia

•Combined Population:196 m

•Combined GDP: over $100 Bn

•Combined EA Trade (Goods) with UK in 2013:

• UK Imports - £490m

• UK Exports - £760m

4

Why Consider East Africa?

$100 billion in

planned infrastructure

investments

290GW of energy

capacity vs. base of 7GW

Significant Resourcediscoveries despite low levels

of exploration

Global fooddemand will grow 70% and

60% of arable land in Africa

Growing middle

class and formal retail

Highly profitable bankingmarket despite low penetration

Private equityincreased 2.5x from 2011-12

Emerging ICT hub but still huge

upside from broadband penetration

Manufacturing potential as

China is projected to lose 100 million jobs

5

Increasing investment in infrastructure

Top Projects

40

42

10 ▪

Rwanda 6

Uganda

Ethiopia

$113 M

15

Tanzania

Kenya

Total

▪ Lamu Port - LAPSSET

▪ Eastern Electricity Highway

▪ Airport, bypass

▪ Tanzania, Rwanda, Burundi rail

▪ Mwambani bay Musoma Port

Rail

▪ Karuma hydropower plant

Mombasa-Malaba-Kisimu rail

line▪

▪ Saka Kigali Railway

▪ Geothermal power plants

▪ Renaissance Dam

Addis-Djibouti Rail

4

4|SOURCE: Global Growth Compass

Creates big opportunities

• Cement

Basic • Steel (structural,

materials rods, bars)

• Bitumen

• Furniture

Equipment • HVAC

• Electrical

• Tubes and pipes

• Fittings

• Finishes

• Lighting

• Wires and cables

• Construction

Services • Plumbing

• Electrical

• Drivers

6

Kenya key facts

• Area - 583,000 sq. km

• Estimated GDP 2014 - 5.6%

• Inflation: 2010 - 4.1% / 2011 - 14.0% / 2012 projected - 9.0% thereafter to 5% in the medium-term

• Debt / GDP - 48%, B+

• Tax collections - approximately 25% of GDP

• Kenya is the Entry Point to:

• EAC - 150 million, among the fasted growing regions in the world

• Ethiopia, South Sudan, DRC - 150 million

• Discovery of Oil, rare earth, Geothermal and others is a GAME CHANGER

7

Eastern Africa Underexplored

• North Africa

– 19000 wells

• West Africa

– 14000 wells

• East Africa

– >500 wells

13

8

• Four sedimentarybasins -399,519 Km2

– Lamu

– Anza

– Mandera

– Tertiary Rift

• Many sub basins

9

Eastern Africa:Investing inService Co

• Highly specialized• Strictest standards for operations

and safety• Critical services (mistakes ground

operations and increase lossesexponential)

• Heavy investment in serviceprovision + R&D ($$$)

• Not available in KE

46

Fuel

Camps/Accom.

Emergency Services

Waste Management

Security

Medical

Crane Hire

Personnel

Transport

Freight Forwarding

Custom

Clearance

Facilities

Management

IT Services

Telecoms

Hotel/Accom.

Office

Supplies

HR

Unskilled

Labour

TrainingGeneral Trades

Catering

Communications

FPSO/Wellhead

Tangibles

Rig

HireFeed

Seismic

ServicesWell

Services

Environmental Services

Field Construction

Int. Freight Services

Site Prep.

Specialist Trades

Inspections

Infield

Transport

Spare

Parts

Infield

Services

Civil

Mechanical

Electricals

Mud/

Cuttings

Construction

Materials

INDIRECT SERVICES• Mostly available and well serviced in KE• Not very specialized but requires some

expertise• Need to improve standards• Some investment required ($)

DIRECT SERVICES• More specialized• Stringent compliance to safety and

operational standards• Requires significant investment ($$)• Not widely available in KE

SPECIALIST SERVICES

OIL&GASVALUECHAIN

11

Kenya Oil & Gas Industry

2014

• Upstream exploration, Farm in and Farm outs. Support services and partnering with National Oil corporation in their upstream ambitions

2014

• Infrastructure development – LAPSSET, Pre Feasibility study for pipeline ongoing by Toyota Tsusho. LNG Export Terminal, Airports, Roads, Resort cities. EOI welcome by PPP unit.

2014/5

• Education and Skills (especially for O&G) – development of training centres(centre f excellence), collaboration with UK universities and technical and vocational institutions.

2015/6• Onshore Oil and Gas distribution networks – Tender for EPC of pipeline and associated

infrastructure to be floated by MoE by April 2015

2020

• Construction, Operation & Maintenance of proposed Mombasa LNG Plant.

• Midstream and Downstream opportunities.

• Gas monetisation project other than LNG (Fertilisers, Methanol, etc)

14

• Over 60 British companies based in Kenya.• Total Bilateral trade over £1.3bn.• UK still the largest cumulative investor in Kenya.• Inflows of Foreign Direct Investment (FDI) to Kenya expected to average US$1.3

billion annually between 2014 – 2018 due to Oil & Gas finds.• Annual GDP growth projection for 2014 5.1%• No restrictions on repatriation of funds or controls on foreign currency.• Educated Workforce.• Only developing country that hosts a UN agency Headquarters – UNEP and UN

HABITAT.• Over 100 diplomatic missions.• Variety of strategies to enter the market: Licensing; Joint ventures; Wholly owned

subsidiary; Franchising• Growing Middle Class• Kenya Vision 2030: www.vision2030.go.ke• Significant Oil Discoveries from 2012 – Present – Tullow Oil main Player – Over 1Bn

Barrels of recoverable resources in place.

Why Kenya?

15

Challenges (Opportunities) of Doing

Business in Kenya(East Africa)• Bureaucracy

• Poor Infrastructure

• Political Environment

• Corruption

• Cost of Doing Business

• Security Threats

16

Summary - Opportunities in East Africa Construction and Infrastructure. Minerals Education and Training and local content. Real Estate – 25% return on investment in Kenya. Aid Funded Business. Environment & Waste Management. Transportation and Logistics. LAPSSETT Energy & Power Tourism Oil and Gas ICT Banking and Financial Services Agriculture Food and Beverages

Interest is growing and investments are on the rise – but not just from the

UK

Tata Group is in talks with partners in Africa to set up new assembly lines for

commercial and passenger vehicles in Kenya.

Mobile phone maker Tecno has announced plans to establish a handset assembly

plant in Kenya

Samsung is set to open a television, laptop and printers’ assembly plant in Kenya

positioning Nairobi as the nerve centre of its operations in East Africa

Huajian Group, a Chinese shoe maker, plans to build a manufacturing zone in

Ethiopia that may generate $4 billion of exports a year within a decade

TVS Motors has just begun production at its assembly plant at Kenya, after

concluding trial production of its Star City motorcycle

Clarks have recently opened their second store in Nairobi

Chery Automobile is to become the second Chinese vehicle maker to build an

assembly plant in Kenya

50 Turkish Textile Factories to Relocate in Ethiopia (August 2013)

Foton Motor group has opened an assembly plant in Nairobi in a bid to explore the

market in Kenya and East Africa, March 2012|

18

UKTI Tailored Services to Meet your

Specific Needs

Product launches and seminars

Networking and relationship building

Publicity and Marketing

Securing meetings with ministers / officials

Market Research

Identifying Potential Customers or Partners

Advice on Market Entry Strategies

Arrangement on programmes for market visits

East Africa OMIS

19

Recipe for Success

Do your researchQuality is paramountMeetings – simplicity key, short introduction importantEtiquette – humility will win friendsPatience: right market for medium-long term successInvest in relationshipsIdentify appropriate option for doing businessDue Diligence

THANK YOU