NIGERIA’s largest miller by market value, Flour Mills of Nigeria Plc, is eying the African market, and is targeting joint ventures and acquisitions in other African countries.
“That will be the next phase of growth,” CEO Paul Gbededo said in an interview with Bloomberg news agency late June, adding that the opportunities that exist in food in Nigeria are present in many African countries. “Food that we can grow here—where we have comparative advantage, we have to be investing in that and grow our capacity in feeding ourselves,” he said.
The focus has in recent times tended to be on the international multinationals looking to take advantage of the continent’s fast rising economy to set up in Africa.
Giants like General Electric have been very active in the region, snapping up billion-dollar deals as they mature, while long timers such as Maersk continue to eye infrastructure deals such as in ports. New ones like PSA Peugeot Citroen are also set to enter the continent.
Even those who left are back: Volkswagen has again started assembling vehicles in Nigeria after a 25-year hiatus, while multilateral financiers will not also be left out: the European Investment Bank is set to open offices in four more African cities, citing the continent’s fast growth.
But less highlighted has been the expansion of African companies such as Flour Mills across country borders, a trend that could give pointers to the next generation of African multinationals.
Until now that space has been occupied by firms that long crossed borders such as Naspers, MTN and SAB Miller, the Dangote Group and a raft of banks such as UBA and Standard, with investments in services dominating.
These types of “veterans” already account for billions in African FDI, at $10.2 billion last year, according to UNCTAD data.
But newer African investors are increasingly looking to invest more in other countries in the region. We cite some of them that have announced their expansion plans this year:
1: Bidco Africa, Kenya
Owned by Kenya’s wealthiest man, the edible oils manufacturer is considering building plants in Mozambique, Madagascar or Ethiopia by the end of the decade to add to existing operations in Kenya, Tanzania and Uganda.
The company trades in 16 African countries and posted sales of $500 million last year, half of that in Kenya, with plans to grow four-fold within the next five years, as it looks to tap increased consumer spending on the continent.
The firm is already the the biggest producer of edible oils in eastern and central Africa, and is a marketer of goods including animal feeds, hygiene products and detergents, according to its website.
2: Ethiopian Airlines, Ethiopia
East Africa’s largest carrier by revenue was in March reported to be considering proposals to help set up national airlines in Nigeria and three other countries—Uganda, South Sudan and DR Congo—to expand its operations on the continent.
The state-owned company already has stakes in Malawian Airlines and ASKY Airlines of Togo, and has been competing with South African Airways and Kenya Airways Ltd. as they expand routes outside their home markets to tap greater demand for travel within the continent.
Ethiopian plans to quadruple annual revenue to $10 billion over the next decade and increase its international destinations to 120 from 84.
3: CRDB Bank Plc, Tanzania
The country’s second-biggest lender by market value, CRDB last month said it would use proceeds of a rights offer that opens next week to fund expansion in eastern and central Africa. The Dar es-Salaam based bank sought to raise close to $70 billion in the sale to shareholders that opened June 26.
CRDB plans to add five new branches in Tanzania, two in neighbouring Burundi and start operations in the Democratic Republic of Congo, according to a spokesman.
“Our new target market is Congo,” Finance Director Frederick Nshekanabo said in an interview with Bloomberg. “The move to Congo will start as soon as the Burundi operation breaks even, and we expect Burundi to break even in 2015-16.”
4: Equity Bank, Kenya
Kenya’s second-largest bank by market value in May said it would buy into Congolese lender ProCredit Bank Congo in its first acquisition outside the East African market as it seeks to triple the number of markets it operates in within the next 10 years.
Congo is among 10 new markets, including highly-coveted Ethiopia, which Equity Group is targeting in an expansion plan backed by 200 billion shillings ($2.03 billion), and coupled with the Tanzanian buy suggests Congo, where financial inclusion is only at 11%, is a magnet for financiers.
In addition to its home market, the lender already operates in Uganda, Tanzania, Rwanda and South Sudan and is targeting countries including Zambia, Ethiopia, Mozambique and Zimbabwe.
5: NSIA Banque-Cote D’Ivoire
The bank, in which the Ivorian government has a 20% stake, is looking to raise funds for expansion in the continent by selling at least 10% of its shares in an initial public offering this year.
The shares will trade on the eight-nation West African BRVM stock exchange, Jean Kacou Diagou, chief executive officer of NSIA Group said last month in Abidjan.
“Our aim is to raise funds on the BRVM to finance our strategic and development plans in Ivory Coast and in Africa for the next three to five years,” said Diagou, whose group holds the remaining 80% stake in the bank.
6: Choppies, Botswana
The Botswana-based supermarket chain already has a presence in South Africa and Zimbabwe, with some 125 stores in the three countries, with 35 in South Africa.
After secondary listing at the Johannesburg Stock Exchange, it has set about tying up more deals north, with an agreement already done for Kenyan-based retailer Ukwala, which fits in with its lower and middle-income clientele.
The firm is said to be targeting to open at least 200 stores in six African countries by the end of 2016, including in Tanzania and Zambia.
7: Tuskys, Kenya
The country’s second-biggest supermarket chain in May disclosed plans to sell shares on the Nairobi Securities Exchange within five years while expanding into Ethiopia and either the Democratic Republic of the Congo (DRC) or Tanzania.
“We have now set 2016 as the appropriate time” to open stores in Ethiopia, Chief Executive Officer Dan Githua told Bloomberg news in an interview.
“What we are going to do there is to partner with a local entrepreneur. In our five-year plan we are also considering to either go to Congo or Tanzania.”
Tuskys, a 25-year-old family owned business, has more than 50 outlets in Kenya and Uganda. The company had sales of 40 billion shillings ($414 million) last year, according to Githua, trailing Nakumatt Holdings Ltd. in East Africa’s biggest economy.
Another Kenyan retailer, Uchumi, has put its regional expansion plans on hold after it run into financial headwinds.
8: Continental Reinsurance Plc
The Nigerian firm is still looking to buy rivals across Africa over the next three years, it said in April. It plans to “raise significant capital” this year through equity sales to enable it to “take advantage of opportunities that abound in Nigeria and Africa,” CEO Femi Oyetunji said in an interview.
In each of the company’s five African regions, “one subsidiary has been given the responsibility to look for acquisitions,” Oyetunji said. “A few names have come up in each region and we’re assessing them strategically at the board level.”
The firm plans to “raise significant capital” this year through equity sales to enable it to “take advantage of opportunities that abound in Nigeria and Africa,” he added.
The Lagos-headquartered company has already announced plans to open a construction property and engineering risk service unit, according to the agency and has operations in Cameroon and Kenya, Tunisia and Ivory Coast.
9: Main One Cable CO, Nigeria
The firm operates an undersea cable connecting West Africa and is looking to double the $300 million it has already invested in infrastructure over the last five years.
It is looking to expand its data centres and submarine cable infrastructure in Nigeria, where broadband penetration is at 4%, and also into Ghana, Ivory Coast and Cameroon.
“When you look at where the market opportunities exist in West Africa, I think if we have Nigeria, Ghana and Ivory Coast, we have probably covered 60 to 75 percent of the market,” CEO Fuke Opeke told Bloomberg News early this month.
FOLLOW NEW AFRICA BUSINESS NEWS ON FACEBOOK @ New Africa Business News.com