VENTURES AFRICA – After a wonderful year for businesses across Africa, an euphoria of greater success is what every entrepreneur, CEO and businessman carries into 2013. Ventures Africa has been reporting on African entrepreneurs and businesses throughout 2012, and in this piece we have identified the Top 5 Best Companies in Africa. This list comprises mobile phone operators, banks and petrochemicals companies indicating the growth of these sectors across the continent.
The banking and mobile technology sectors are linked somehow. Advances in mobile-banking technology have made it possible to use cell phones for routine banking transactions, such as money transfers and deposits. This development –spurred by the rapid diffusion of inexpensive mobile networks in a continent with limited landlines — has sparked a revolution in retail banking from Nigeria to Kenya to Mozambique to South Africa.
While US and European banks suffer hangovers from the Great Recession and continued shock waves inside the Eurozone, Africa’s top lenders have never looked stronger or been more ambitious. A continent better known for political instability and foreign aid, is now riding a banking boom characterized by aggressive pan-African expansion and swelling balance sheets.
Africa’s poor represent a vast reserve of untapped capital waiting to be channelled into consumer and small-businesses loans, and for infrastructure development. By some estimates, 95 percent of the nearly 500 million adults in sub-Saharan Africa earning less than $10 a day have no access to bank accounts. If they did, the formal banking system could get its hands on as much as $59 billion in new deposits.
Lastly, Africa is a continent of 54 countries with an estimated mid-2000 population of 805 million people. The upstream oil industry is key to the continent of Africa.
According to the 2012 BP Statistical Energy Survey, Africa has proved oil reserves of 132.438 billion barrels at the end of 2011, equivalent to 41.2 years of current production and 8.01 percent of the world’s reserves. Africa produced an average of 8804.4 thousand barrels of crude oil per day in 2011, 10.44 percent of the world and a change of -12.7 percent compared to 2010.
Five countries dominate Africa’s upstream oil production. Together they account for 85 percent of the continent’s oil production and are, in order of decreasing output, Nigeria, Libya, Algeria, Egypt and Angola. Other oil producing countries are Gabon, Congo, Cameroon, Tunisia, Equatorial Guinea, the Democratic Republic of the Congo, and Cote d’Ivoire. Exploration is taking place in a number of other countries that aim to increase their output or become first time producers. Included in this list are Chad, Sudan, Namibia, South Africa and Madagascar while Mozambique and Tanzania are potential gas producers.
Ventures Africa’s selection is based on the companies’ expansion strategies and how well they are spread out in the continent. Remember the more companies make acquisitions and set up shop in many countries, the more their earnings are boosted.
ORASCOM
The Egyptian mobile operator has grown from 200.000 subscribers in 1998 to over 83 million. Orascom Telecom (OTH) established itself as a global brand and is considered today to be one of the largest and most diversified telecom operators.
Orascom Telecom is operating GSM networks in high growth markets in the Middle East, Africa and Asia, having a total population under license of approximately 415 million with an average mobile telephony penetration of approximately 51 percent as of June this year.
Orascom Telecom operates GSM networks in Algeria (“Djezzy”), Pakistan (“Mobilink”), Bangladesh (“banglalink”), and has an indirect equity shareholding in Globalive Wireless Canada (“Wind Mobile”). In addition it has an indirect equity ownership in Telecel Zimbabwe (Zimbabwe) and through its subsidiary Telecel Globe, OTH also operates in Burundi and the Central African Republic.
In April 2011, Wind Telecom merged with Vimpelcom, creating the world’s sixth largest mobile telecommunications provider by number of subscribers with operations in 21 countries serving 186 million customers.
OTH witnessed success as Orascom Telecom Algeria SPA (OTA) or “Djezzy” was launched in February 2002. It grew to become the market leader in terms of both subscriber numbers as well as the quality of telecommunications services provided. OTA serves over 17.7 million subscribers on its network and has a 56.7 percent market share (as of June 2012).
Pakistan Mobile Communications (“Mobilink”) started its operations in Pakistan in 1994. In April 2001, OTH took over management control of the company. As the market leader, Mobilink has 30.1 percent market share and serves almost 36 million subscribers (as of June 2012).
In September 2004, OTH purchased 100 percent of Sheba Telecom in Bangladesh. OTH re-branded and launched its services as “banglalink” in February 2005. Immediately after the launch, OTH started its aggressive plans to develop banglalink into a leader in the mobile sector by rapidly expanding its GSM network to provide high quality communications services at affordable prices. Banglalink serves over 25.4 million subscribers with 27.2 percent market share (as of June 2012).
OTH has 65 percent indirect equity ownership in WIND Mobile which has officially been granted its spectrum license from Industry Canada in 2008. “WIND Mobile” commenced its operations in Canada in December 2009 becoming the first national wireless provider in over a decade in the country and offering state of the art all-IP 3G network.
WIND Mobile has launched its services in Toronto, Calgary, Edmonton, Ottawa and Vancouver with over 200 retail locations nationally and has succeeded in exceeding 100.000 subscriptions by early July 2010, only two quarters after the inauguration of its services. Since launching, WIND Mobile’s presence in the market has worked to drive competition by cost reduction, the introduction of more handsets and more advanced technologies.
OTH is traded on the Cairo & Alexandria Stock Exchange under the symbol (ORTE.CA, ORAT EY), and on the London Stock Exchange its GDR is traded under the symbol (ORTEq.L, OTLD LI).
MTN
The MTN Group is offering cellular network access and business solutions. The MTN Group is listed in South Africa on the JSE under the Industrial – Telecommunications sector.
Launched in 1994, the MTN Group is a multinational telecommunications group, operating in 21 countries in Africa and the Middle East. MTN recorded more than 40 million subscribers across its operations.
The MTN Group operates in Botswana, Cameroon, Côte d’Ivoire, Nigeria, Republic of Congo (Congo-Brazzaville), Rwanda, South Africa, Swaziland, Uganda, Zambia, Iran, Afghanistan, Benin, Cyprus, Ghana, Guinea Bissau, Guinea Republic, Liberia, Sudan, Syria and Yemen.
In South and East Africa, MTN has operations in South Africa, Swaziland, Zambia, Uganda, Rwanda and Mascom Botswana. In West and Central Africa it has operations in Nigeria, Cameroon, Congo-Brazzaville, Côte d’Ivoire, Benin, Ghana, Guinea Bissau, Guinea and Liberia. In the Middle East and North Africa, the company has operations in Iran and Afghanistan, Cyprus, Sudan, Syria, Yemen and Mednet.
MTN’s strategy in Africa has been to make acquisitions in the rest of the continent, funding them with free cash. Nigeria was billed as one of the company’s potentially strong growth areas.
Standard Bank
Standard Bank, Africa’s biggest bank by assets, has a 150-year history in South Africa and started building a franchise in the rest of Africa in the early 1990s. It currently has operations in 18 countries on the African continent, including South Africa, as well as in other selected emerging markets.
The company’s strategy is to build the leading African financial services organisation using all its competitive advantages to the full. We will focus on delivering superior sustainable shareholder value by serving the needs of its customers through first-class, on-the-ground operations in chosen countries in Africa.
The bank also connects other selected emerging markets to Africa and to each other, applying its sector expertise, particularly in natural resources, globally. Its key differentiator is people who are passionate about its strategy, wherever in the world they are based.
The company organises itself as three business units but present itself as one. Its three main pillars of business are Personal & Business Banking, Corporate & Investment Banking, and Wealth – Liberty.
Standard Bank is listed on the JSE and the Namibian Stock Exchange. Normalised headline earnings for 2011 were R13.6 billion ($1,9 billion), total assets were over R1 497 billion (approximately $185 billion). It employs approximately 52 000 people (including Liberty) across all geographies.
It has more than 500 branches in the rest of Africa and in total Standard Bank has more than
1 222 branches, including loan centres, and more than 7 945 ATMs on the African continent.
SONATRACH
Sonatrach is the largest oil and gas company in Algeria and Africa. The company operates in exploration, production, pipeline transportation and marketing of hydrocarbons and by products.
As part of a diversification strategy, Sonatrach has stepped up investments in power generation, new and renewable energies, water desalination, and mining exploration and exploitation. The international strategy of the company includes operations in several parts of the world namely such as Africa (Mali, Niger, Libya, Egypt), in Europe (Spain, Italy, Portugal, Great Britain), in Latin America (Peru) and in the USA.
With a turnover nearing $56.1 billion in 2010, Sonatrach is ranked first company in Africa and 12th in the world. It is also 4th world LNG exporter, 3rd world LPG exporter and 5th World Natural gas exporter. It is the 12th World Oil Company, the 13th World Company regarding liquid hydrocarbons (reserves and production), the 6th World Company in terms of Natural Gas (reserves and production), 25th World Company in terms of employees (source: PIW Top 50 /2008), the World LNG exporter and 3rd World LPG exporter.
SASOL
Sasol is a diversified chemical and fuel company with production facilities in South Africa and several other countries worldwide. Its principal feedstocks are obtained from coal but it also uses other hydrocarbon raw materials in its global petrochemicals plants.
Sasol’s chemical businesses include Sasol Olefins & Surfactants, Sasol Polymers, Sasol Solvents, Sasol Wax and Sasol Nitro. Sasol believes that it has a good business strategy, exciting and achievable growth plans and competitive technologies.
Sasol’s growth strategy includes the development of world scale gas-to-liquids (GTL) or coal-to-liquids (CTL) plants outside South Africa with its partners, based on a clear, focused selection of opportunities for which Sasol has a strong value proposition. It also plans to grow existing and/or another one or two additional chemical hubs that are not based on Fischer Tropsch technology.
Sasol also has plans to expand the South African gas business and increase Sasol Synfuels’ capacity. It will enhance and optimise the composition of its chemicals portfolio by encouraging each business unit to focus on maximising its value proposition. The company will explore the feasibility of an additional CTL plant in South Africa. Headquartered in Johannesburg, South Africa, Sasol employs around 33,339 people.
Sasol would inject R40 billion ($5 billion) into its southern African operations over the next two years. The spending will range from the expansion of wax production and exploration for natural gas, to the investments Sasol was looking to make in low-carbon and renewable energy.
In June last year, the company reported future capital commitments of R48 billion ($6 billion). These included R11.7 billion ($1.3 billion) on synfuels growth; R8.4 billion ($980 million) in expansion of wax production; and R1.8 billion ($210 million) in additional power-generation capacity of 140 megawatts in Sasolburg, all in South Africa.
Sasol also committed R1.1bn to the central processing facility expansion project in Mozambique; R1.7bn towards the tetramerisation project in North America; R1.9 billion ($221 million) for the ethylene EPU5 project; and R3 billion ($349 billion) towards the Escravoc gas-to-liquids project in Nigeria.
