South African Business 2018 edition

Business expands into Africa
Manufacturing and services are targeted for export growth.
Shoprite is a household name for many South
Africans who buy their weekly groceries at
one of hundreds of outlets across the country,
but that is an experience which many
Africans living in other parts of the continent are sharing
more and more frequently, and in large numbers.
Retailers and bankers from South Africa have been
exploring opportunities north of the Limpopo River
for many years, and they have been followed by engineering
firms, consulting companies and, more
recently, automotive manufacturers. They key attraction
is the size of the market, and the potential of that
market to grow and to grow more sophisticated in its
tastes. Africa has a population of 1.2-billion.
South African and international hotel brands are
investing strongly in Africa. Tsogo Sun has hotels in
Zambia, Tanzania, Kenya, Nigeria and Mozambique.
Sun International operates in six countries outside
South Africa. Marriott International’s acquisition of
Protea Hotels has given it an expanded footprint in
Africa.
Hyatt Hotels & Resorts will double its presence in
Africa by 2020, with new investments in Cameroon,
Senegal and Algeria, to go with its existing hotels
in Morocco and Tanzania. The group is eyeing
East Africa, citing increased infrastructure spending
there as a reason to consider investing.
While South Africa is still seen as a good staging
post for international firms to base their Africa strategies,
some industries have refined that process. In
the automotive industry, for example, head offices
in Europe and the US have mandated their South
African operations to lead the drive into Africa.
According to the CEO of Sanlam Africa
Investments, St John Bungey, the subtleties of investing
in Africa should be respected. The growth
path and the demographics are solid reasons to
invest in Africa but specific strategies are needed.
He notes three key ingredients: respect for local
knowledge, understanding the local environment
and partnering with the right local people
(Sunday Times).
SOUTH AFRICAN BUSINESS 2018
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