African Business 2020 edition

OVERVIEW sector across

OVERVIEW sector across the continent will lead to industrialisation, urbanisation and more value being added. The bank reports that, “African countries with the highest shares of manufacturing in value added also have higher levels of development.” Food processing and beverage production are among the strongest sectors in Africa. The Dangote Group, which has interests in cement, sugar, salt, flour, pasta and beverages, is active in 16 African countries and has a turnover of .1-billion. Anheuser-Busch InBev has built or is building new breweries in Nigeria, Mozambique and Tanzania and intends to increase its local supply, which will help grow local businesses. A favoured strategy to encourage manufacturing is through Special Economic Zones. These come in different forms, including Free Trade Zones (FTZs), Export Processing Zones (EPZs) and industrial parks. Typically, these zones attract tax benefits and tariff exemptions. Zones in Ethiopia, Djibouti, Nigeria and Rwanda were established with the help of state-owned Chinese companies. Automotive drive The second-hand car market has for a long time held back automotive manufacturing on the continent as there was not sufficient demand for new cars. South Africa has a sophisticated automotive vehicle and components sector. In 2018 South Africa exported 23 988 vehicles to other African countries. Egypt and Morocco have automotive manufacturing capacity, but several international brands are showing interest in setting up plants in new locations on the continent. Whereas the global average is 180 vehicles per 1 000 citizens, Nigeria averages just 44 (Deloitte). With Africa’s middle-class set to grow exponentially in the next decades, the car market is likely to explode. Although South Africa’s automotive industry is healthy, it is strongly supported by various state incentives. As the Chairman and Managing Director of Volkswagen Group South Africa, Thomas Schaefer, explains, “If production stays far below a million cars production per year, we will never be profitable or sustainable, so Africa could be the key.” Schaefer is the president of the African Association of Automotive Manufacturers. He says of the potential of Sub-Saharan Africa, “When you look at the number of cars per thousand inhabitants in most of the African countries there is opportunity in places like Kenya and Nigeria. If you take away the used car drag, there’s no reason why their market could not grow. If Kenya came to a level like South Africa, they could achieve a market of five or six hundred thousand.” Volkswagen South Africa opened an assembly plant in Rwanda in 2018. The first phase of the company’s integrated automotive mobility solutions strategy will cost -million. In the same year, the company signed a memorandum of understanding to develop an automotive hub in Nigeria. Nissan signed a similar agreement in the same year with Ghana. Nissan has a semi-knockdown assembly plant in Nigeria, where it has an agreement with Stallion Group. Kenya is the focus of attention of several car makers. Peugeot, Volkswagen (VW), CNH Industrial and Nissan Motor have indicated plans to assemble cars in the country and it is thought that Renault and Mahindra & Mahindra are also interested. Kenyan company Simba Corporation, which was founded on vehicle sales and service, is looking to partner with one or more of these international brands. Simba already owns Associated Vehicle Assemblers, which assembles trucks on contract for the likes of Hino and Toyota in Mombasa. The 2016 decision of Beijing Automotive International Corp (BAIC) to build a 9-million plant at the Coega Industrial Development site in Port Elizabeth, South Africa, has everything to do with selling into the African market. ■ Online Resources Accelerated Industrial Development of Africa: www.au.int/en/ti/aida Agenda 2063: www.au.int/en/agenda2063 Association of Ghana Industries: www.agighana.org Federation of Egyptian Industries: www.fei.org.eg Kenya Association of Manufacturers: www.kam.co.ke SME Strategy: www.ifc.org AFRICAN BUSINESS 2020 54

advanced technologies in the commercial print, industrial print, 3D print/additive manufacturing, auto identification, bar coding and labelling sectors. As such, we are proud to be the sole distributor in Southern Africa for many of the leading internationally-renowned brands in those sectors in which we operate, such as HP Indigo, Komori, Flint, Fujifilm, Argox, CipherLab, Datalogic and Brother. And, with a focus always on providing highly skilled services and post-sales support, we’re ensuring our customers are maximising their potential for growth and profit - day in, day out! Kemtek’s three-dimensional growth An industry leader in printing sees good prospects in Africa. NATIONAL: 0861 KEMTEK as the • JHB: industry +27 (0)11 leader 624 8000 with • PTA: five +27 South (0)12 804 African 1410 • DBN: +27 (0)31 700 branches, 9363 • CPT: almost +27 (0)21 200 521 9600 employees • PE: +27 (0)41 and 364 dealer 3690 WWW.KEMTEK.CO.ZA agreements for international brands such as Argox, Brother, Datalogic, Epson, Fujifilm, Honeywell, HP Indigo, and many more. Growth for Kemtek will come in three forms: expansion on the continent, expansion in the product range and development in the 3D printing market. Says CEO Johan Botes, “We’re seeing good Targeted industry product demonstrations and prospects in Zimbabwe, Zambia, Ghana, Kenya, events are proving popular with customers and Malawi, Mozambique and a number of others. prospective customers alike. What we’ve done successfully is gain partners, bring them to South Africa, train them and maintain Over the past decade, the printing industry a strong relationship.” Kemteck has about 200 has had a bad “rap”. Since the onset of resellers in 28 countries. the green mindset, people have made With 3D printing, there are significant assumptions that printing is wasteful opportunities for the African continent, where and bad for the environment, that it results in adoption of new technology is swift. Like mobile deforestation, and that it is expensive. In fact, using phones, 3D printing could be the killer app that the correct technology can result in cost-effective, enables Africa to leapfrog into a new age of environmentally-friendly printing which results in industrial production. brilliant marketing and other important benefits to business. Printing technology is also flexible – the Customer-oriented industry has a responsibility to keep up with latest The focus on the customer experience at Kemtek trends in order to remain sustainable and relevant. goes beyond the sales process and incorporates Whether it’s simple inkjet printing, digital printing or after-sales service, maintenance, repairs and 3D printing, demand remains, and the world’s tech ensuring a quality experience. The company’s major companies continue to supply quality products to asset is its staff through which it delivers a wealth of this important sector. knowledge that is not found in other organisations. In South Africa, the current economic situation Kemtek differentiates itself through support, repairs, has seen slowing GDP growth. Together with the dealing with warranties and telephone support. perceptions of the print industry, this has resulted Kemtek is perfectly positioned to achieve its in a challenging trading environment. However, vision of further growth. With its stake in the 3D Kemtek Imaging Systems (Kemtek) is positioning printing industry, its ever-growing African operations itself for growth and maintaining a positive outlook. and its solid base in South Africa, this is a company Kemtek has been serving the print, labelling, bar that looks set to continue leading the way in the coding and associated sectors since 1988. Growth specialist sectors in which it operates. ■ has been gradual but through determination and a strong focus on staff, Kemtek is today recognised For more information, visit www.kemtek.co.za J25589_Kemtek_Propak_Advert_FA.indd 1 2019/02/14 16:12 J25589 55 AFRICAN BUSINESS 2020