FS

FOOD & DRINK

frica says ‘Cheers’

$90bn orghum beer is the next big thing, say brewers.

»Africans drink eight litres of beer per person a year, but the market for home-brewed beer, made from sorghum or millet is currently four times as big. Brewer SABMiller, which operates in 37 African countries, is trying to woo homebrew-lovers with lower-priced sorghum and cassava beers. Best-seller Eagle, the world’s first clear sorghum lager, was launched in 2002 and brewed in Uganda. Demand for Impala, the world’s first commercially produced cassava beer, brewed in Mozambique, is outstripping supply.

efore the company’s acquisition of Foster’s of Australia, Africa (excluding South Africa) accounted for only 12% of SABMiller’s total sales, but it now attracts nearly a third of the group’s total investments – $1.75bn in the past four years, most of it on beer. It has a $260m investment programme to fund capacity expansion in its subsidiaries in Uganda, Ghana, Zambia and Tanzania.

ther global brewers are also keen to expand in Africa. Heineken, the biggest brewer in Nigeria, has paid $163m for two Ethiopian breweries put up for sale by the government. With Diageo, the leader in Kenya, these four brewers account for around 80% of the African market. Sales, which doubled by volume in the past 10 years to over 100,000 hectolitres, could rise by 50% in the next 10 years. India and Africa to boost trade from $62bn in 2011 to $90bn by 2015. ChinaAfrica trade was already $160bn in 2011 Nigeria’s mobile money market is valued at $25bn and users are expected to reach 709m by 2015 Nigeria’s lower middle class and above grew by around 7m to 64m, more than the entire population of most African countries. Mozambique Sumol Compal Moçambique plans to invest $10.4m in local production of fruit juices and nectars, both for the home market and export to the SADC. Its Portuguese parent group’s international sales in 2011 were €80m, up 30% year on year

$30m he largest oil field in Ghana, the Jubilee oil field, produced 30m barrels of oil in 2011, according to Tullow Oil he group’s lager revenue on the continent, excluding South Africa, is growing by double digits. With its French joint-venture partner, Castel, SABMiller has 60% of Africa’s commercial beer market in volume terms, including a near-monopoly in South Africa.

$25bn

KETS Dangote Cement plans London listing, invests in power Africa’s richest man, Nigerian Aliko Dangote, plans to list his $11bn cement business, Dangote Cement, on the London Stock Exchange next year, free-floating a 20% stake in the company to finance its rapid expansion. Morgan Stanley and JPMorgan have been appointed as co-leads for the London share issue. Dangote said the company was on track to meet the corporate governance requirements for a premium listing, and that he would give up his current role as chairman. Dangote also plans to invest $7bin in power, petrochemical and mining sectors of the Nigerian economy within the next four years. He will contribute $2.5bn while $4.5bn will be borrowed from international lenders such the IFC. The funds will be deployed in generating 2,000MW of electricity MANUFACTURING

outh Africa and Nigeria invest South Africa plans to invest $755m in an infrastructure programme to increase trade over the next three years, helping manufacturers affected by the global economic downturn upgrade their factories, improve products and train workers. “The barrier to us trading amongst ourselves is infrastructure. We don’t have infrastructure that joins us. We only have infrastructure that takes raw materials to the port,” Trade Minister Rob Davies said.

Nigeria’s Notore Chemical Industries plans to raise more than N160bn ($1m) through an initial public offering (IPO) in 2013 to finance a new fertiliser plant, part of the expansion programme to augment the current attainable capacity of the existing plant of 750,000 metric tonnes. Potential demand is 3.5 million metric tonnes.

CHINAWATCH China woos Portuguese-speaking countries Portuguese-speaking countries in Africa will benefit from China’s new Fund for Cooperation and Development with initial capital of $200m, of which $50m will come from the Macau government, managed by the China Development Bank Capital Corporation Ltd (CDBCCL), partnered by the Macao Industrial Development and Commercialisation Fund (FDICM). The fund will provide loans, with subsidised interest rates, to Asian and African countries that are members of Forum Macau, and help them train managerial and technical staff. It will also establish joint ventures with companies from Portuguese-speaking countries that want to enter China. In 2011, trade relations between China and the Portuguese-speaking countries totalled $117bn.

8

African Business | May 2012 FC to invest $3.5bn in subSaharan infrastructure For the first time ever, the World Bank’s private-sector lending arm will invest more than $1bn in infrastructure in Africa in a year – $3.5bn will go to sub-Saharan Africa, mainly in the infrastructure sector, where the IFC plans projects in 30 countries. It raised investment in the region this year from $2.2bn in 2011, with a projection it may hit about $4bn next year. Three energy projects and the Kenya-Uganda railway will receive a total of $600m. Another $100m will go to Kenya’s Equity bank as a loan to expand lending to small and medium enterprises (SMEs). AGRIBUSINES Private equity spurs growth JSE-listed Zeder Investments is committing $46.7m funding into acquiring and expanding an agricultural operating business, Chayton Africa, a long-term investment in the viability of African agribusiness. Chayton Africa made its first investment in Zambia in 2010 and currently produces 10% of the country’s soya and 5% of its wheat. It believes that agricultural trade in Africa will play a larger role in securing the food needs of developing countries, and that foreign direct investment will fill key infrastructure gaps. Earlier this year, the African Agriculture Fund (AAF) SME fund, established to stimulate commercial growth, raised $30m, and is targeting $100m, and Standard Chartered Bank’s Africa Private Equity division acquired a $74m stake in Tanzania-based agribusiness ETG, placing a £500m value on the company. (See also Agriculture Special Report page 28.) MOBILE MONEY Rwanda, Zimbabwe and Kenya expansion Bharti Airtel launched its operation in Rwanda, expanding its footprint on the African continent to 17 countries. It will invest over $100m in its operations over the next three years, generating direct and indirect employment opportunities. Econet Wireless, Zimbabwe’s largest telecoms firm, has passed the 1m mark in ‘connected’ users for its EcoCash mobile money service, which the company says is the fastest growth of such a service in the world. In Kenya, supermarket chain Uchumi, with 18 branches, has become Safaricom’s leading M-Pesa agent by transaction volumes. Equity Bank is second, Kenya Post Office Savings Bank seventh and Naivas (Naivasha Self Service Stores) ninth in the top 10 agents. RENEWABLE ENERGY Kenya hosts SA’s largest wind farm Construction on the €582m Lake Turkana Wind Power project (LTWP) is due to start in June, pending the finalisation of risk guarantees from World Bank institutions IDA and MIGA. The project, backed by the African Development Bank, marks the largest single private investment in Kenya’s history, and should allow the country to diversify from hydroelectric power, which provides around 60% of its electricity needs. Kenya is the first African country to tap geothermal power. LTWP will sell the electricity produced to utility company Kenya Power. The project will create 2,500 jobs during the 32-month construction and 200 permanent jobs.

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PRIVATE EQUITY Nigeria, S Africa set for $280m EU investment Nigeria and South Africa top the list of African countries set to benefit from a proposed $280m private equity investment over five years by the African Venture Capital Association (AVCA), if governments step up efforts to improve the business environment and secure foreign investments. Investors are looking to invest in oil and gas, telecommunications, and real estate sectors. ACVA is a not-for-profit entity which promotes, develops and stimulates private equity and venture capital in Africa, promoting high ethical standards in the private equity and venture capital industries.

COMODITIES Gabon rubber production bounces back Gabon will invest $183m to develop a rubber plantation and processing plant in a partnership with multinational Singapore firm Olam. The joint venture, in which the government will hold a 20% interest, will fund the development of a 28,000-hectare plantation. Planting will start in 2013 and be completed in 2019, with the first harvest in 2020. It is expected to yield 62,000 tonnes of rubber per year. A processing plant of 225 tonnes per day will be built to increase exports to meet a rising global demand in consumption of 3.5% per year. More than 6,000 direct and 5,000 indirect jobs will be created, with Olam providing training. It will construct 3,366 houses, schools and a health centre. The employment zone will meet international standards in terms of Corporate Social Responsibility.

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