AFRICA’S GREENFIELD OPPORTUNITY

Global developments unearthed and analysed point out that the chemical substances sector is increasingly being pushed by Environmental, Social, and Governance (ESG) considerations. It also signifies that decarbonisation is usually a key rationale behind the investments (and divestments) in the sector, except for Africa the place investments understandably lagged again this year.
เกจ์ออกซิเจนsumo are the findings of the newest Chemicals Executive M&A Report for 2022 launched by international administration consulting agency Kearney, now in its ninth version.
“The reasoning for it’s because there are simply not that many attractive target firms with appropriate ESG credentials available to acquire for chemical substances organizations seeking to invest and consolidate on the continent,” explains Prashaen Reddy, Partner on the firm.
As the least industrialized continent, the place as much as 600million folks nonetheless live without electricity, Africa’s chemical industry is emergent, and its markets are immature compared to its Asian, European, and Middle Eastern counterparts.
Nevertheless, the chemicals sector is a key element of Africa’s economy. A giant complicated business, with numerous sub-sectors, Africa’s chemical trade is intrinsically interlinked with different sectors – fuels, pharmaceuticals, plastics, and manufacturing, to call a couple of.
The sector is answerable for key outputs and crucial commodities along a number of industries’ complete value chains.
In South Africa, the continent’s most developed chemical market, the sector accounts for around 25% of producing gross sales. (Chemical and Allied Industries’ Association: https://home.kpmg/za/en/home/industries/chemicals.html)
ESG and decarbonisation increasingly being the dominant rationales behind M&A offers in the international chemicals sector have resulted in a powerful investor urge for food for M&A targets with good ESG credentials, allowing Africa’s chemical companies that embrace ESG to place themselves to draw funding.
“Although realistically Africa will still have to harness its abundant hydrocarbon-based energy reserves to remain economically competitive, there are confirmed strategies to make even fossil-fuel burning services cleaner and more sustainable, leading to significant reductions in carbon emissions, corresponding to the use of low-carbon fuel, low-carbon hydrogen and low-carbon ammonia,” Reddy elaborates.
Africa’s nascent chemicals sector thereby has an opportunity to leap forward of the curve, by building sustainability and green design rules into new chemical facility developments from the outset, and by working to decarbonise present offerings by way of technologies like carbon capturing and sequestration (CCS).
Echoing เกจ์วัดแรงดันน้ำ , African National Oil Companies (NOCs) proceed to function prominently within the chemical industry M&A area.
“Chemicals M&A exercise has been comparatively quiet in Africa over the previous 12 months. Africa’s oil-rich nations’ similar to Nigeria, Angola, and extra lately Namibia, who have historically focussed on the extraction, production, and supply of crude oil merchandise, at the second are considering the diversification of their product portfolios as a part of their future-proofing efforts. This should begin to present results in the medium-term,” explains Reddy.
These new opportunities arising are in downstream beneficiation of power merchandise additional along the worth chain.
“We might due to this fact see a spate of acquisitions of services that produce petrochemicals, ammonia, and fertilisers, for instance, by these NOCs over the coming years. These acquisitions would operate synergistically alongside their present oil and gas-focussed strategies,” he says.
There are indicators that Africa is set to take possession of beneficiation and manufacturing and become a web exporter of chemical compounds, well-poised to produce the mature markets of Asia, the EU, the USA, and its emergent ones.
“Today’s chemical substances sector companies should navigate the mega-trends of speedy population expansion, climate change, digitisations and decarbonisation. Traditional chemical and energy giants, and NOCs, are repositioning themselves to remain related in a greener future. We hope to see Africa’s emergent chemical substances sector leading the cost in the path of an environmentally and socially sustainable chemicals trade worldwide.”
For extra data, visit www.kearney.com
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