AFRICA’S GREENFIELD OPPORTUNITY

Global tendencies unearthed and analysed indicate that the chemicals sector is increasingly being pushed by Environmental, Social, and Governance (ESG) issues. It additionally signifies that decarbonisation is commonly a key rationale behind the investments (and divestments) in the sector, aside from Africa the place investments understandably lagged once more this 12 months.
These are the findings of the newest Chemicals Executive M&A Report for 2022 launched by world administration consulting firm Kearney, now in its ninth edition.
“The reasoning for this is because there are merely not that many engaging goal corporations with suitable ESG credentials obtainable to amass for chemical substances organizations trying to invest and consolidate on the continent,” explains Prashaen Reddy, Partner on the firm.
As the least industrialized continent, where as much as 600million people nonetheless reside without electrical energy, Africa’s chemical industry is emergent, and its markets are immature in comparison to its Asian, European, and Middle Eastern counterparts.
Nevertheless, the chemical compounds sector is a key part of Africa’s economy. A giant complicated industry, with diverse sub-sectors, Africa’s chemical business is intrinsically interlinked with other sectors – fuels, prescribed drugs, plastics, and manufacturing, to call a number of.
The sector is answerable for key outputs and essential commodities alongside several industries’ entire worth chains.
In South Africa, the continent’s most developed chemical market, the sector accounts for round 25% of manufacturing sales. (Chemical and Allied Industries’ Association: https://home.kpmg/za/en/home/industries/chemicals.html)
ESG and decarbonisation more and more being the dominant rationales behind M&A offers within the world chemical compounds sector have resulted in a robust investor urge for food for M&A targets with good ESG credentials, permitting Africa’s chemical companies that embrace ESG to place themselves to attract funding.
“Although realistically Africa will still have to harness its ample hydrocarbon-based vitality reserves to stay economically competitive, there are confirmed methods to make even fossil-fuel burning facilities cleaner and extra sustainable, leading to significant reductions in carbon emissions, similar to using low-carbon gas, low-carbon hydrogen and low-carbon ammonia,” Reddy elaborates.
Africa’s nascent chemicals sector thereby has a chance to leap forward of the curve, by constructing sustainability and green design ideas into new chemical facility developments from the outset, and by working to decarbonise present offerings via technologies like carbon capturing and sequestration (CCS).
Echoing world tendencies, African National Oil Companies (NOCs) continue to characteristic prominently within the chemical industry M&A area.
“Chemicals M&A exercise has been comparatively quiet in Africa over the past 12 months. เกจวัดแรงดันแบบแห้ง -rich nations’ corresponding to Nigeria, Angola, and extra just lately Namibia, who have historically focussed on the extraction, manufacturing, and supply of crude oil merchandise, at the second are considering the diversification of their product portfolios as a half of their future-proofing efforts. This ought to begin to show results in the medium-term,” explains Reddy.
These new opportunities arising are in downstream beneficiation of energy products further alongside the value chain.
“We may therefore see a spate of acquisitions of services that produce petrochemicals, ammonia, and fertilisers, for example, by these NOCs over the approaching years. เกจวัดแรงดันลมขนาดเล็ก would operate synergistically alongside their present oil and gas-focussed strategies,” he says.
There are signs that Africa is decided to take ownership of beneficiation and manufacturing and turn into a web exporter of chemical compounds, well-poised to provide the mature markets of Asia, the EU, the USA, and its emergent ones.
“Today’s chemical compounds sector businesses must navigate the mega-trends of rapid population expansion, climate change, digitisations and decarbonisation. Traditional chemical and energy giants, and NOCs, are repositioning themselves to stay relevant in a greener future. We hope to see Africa’s emergent chemicals sector leading the cost in course of an environmentally and socially sustainable chemicals trade worldwide.”
For more data, visit www.kearney.com
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