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Glob of the world focusing on Africa.

Africa. The Emerging Market.

Posted 04/06/2016 by Tom Meek, Business Director, Africa

Interestingly with the rapidly developing economies of Latin America and Asia Pacific grabbing the headlines as key sales drivers across fast-moving consumer goods, growth exhibited across Africa tends to be less commonly discussed. But as we delve deeper into this region, it becomes apparent that Africa is a fast-growing continent that represents huge opportunities.

Access to African markets is a key driver 

Did you know that by 2050 there will be more Nigerians than Americans on our planet? By 2035, the UN estimates that half of all Africans will live in cities. And, Nigeria’s 170 million people are now among the world’s biggest consumers of imported tomato paste and rice, and they drink more champagne than anyone outside France (Fortune 2014).  

Industries and companies can’t overlook this healthy growth and expansion, and so access to African markets is a key driver for many. Let’s take a few examples. In 2013, according to reports, Procter & Gamble announced an investment of $170 million into a manufacturing plant in South Africa to serve customers in Southern and Eastern Africa. Walmart acquired 51 percent of South Africa´s Massmart in 2012 and plans to invest in expanding into the rest of Africa. General Electric reportedly booked $2.5 billion of orders from sub-Saharan Africa over 18-months leading up to October 2015. In March 2015 Toyota announced plans to expand its vehicle assembling plant in Kenya. IBM has announced expansion plans across the Middle East and Africa. In fact, according to some industry insiders, the planned mega-merger of SABMiller and AB InBev was specifically designed to enable access to Africa’s competitive alcohol markets. AB InBev currently has a very small presence in Africa while SABMiller sells around 40 beer brands in Africa and reportedly gets around a third of its global profit and revenue from African markets. 

Growing foreign direct investment (FDI)

With all of this in mind it comes as no surprise that according to the Africa Investment Report 2015, FDI into Africa in 2014 accounted for 13 percent of global FDI and peaked at $87 billion following the announcement of a multitude of high value projects. ‘Coal, Oil and Natural Gas’ were reported as the top sector in the region by capital investment accounting for 38 percent of announced FDI. ‘Manufacturing’ was stated as the top business function in the region by capital investment accounting for 33 percent of announced FDI. 

H.B. Fuller committed to growing profitably in emerging markets

At H.B. Fuller, we’re committed to growing profitably around the world, and an important element of our long-term strategy includes significant expansion in emerging markets, like Africa. In fact, in February 2015, we acquired Continental Products Limited, a provider of industrial adhesives based in Nairobi, Kenya. With this acquisition we welcomed a team with strong customer relationships and local manufacturing capabilities, and today we provide highly specialised adhesives formulations and technical support to a growing customer base in East and Central Africa, in a wide range of industries, including paper converting, printing and packaging, labeling, laminating, bookbinding, automotive assembly, footwear and construction. 

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