Growth Strategy for Chemical companies in Sub Saharan Africa - do companies need to look beyond South Africa now?

South Africa has always been regarded as the powerhouse of the Sub Saharan African region. The reason for this being , South Africa is among the top 25 chemical producing countries in the world. It contributes significantly to the global chemicals industry.

The South African chemicals industry contributes to approximately 4.5% to the GDP and about 25% to the country's manufacturing sector.The South African chemicals industry is highly integrated into almost all other sectors of the country’s economy. In addition, the chemicals sector’s products are also the basis for almost all manufacturing activity in South Africa.

The effects of global economic recession has had its effect on the South African chemicals sector as well. In 2009, the South African chemicals industry was worth $21.67 billion growing by -2.1 percent when compared to 2008. Globally, the demand for chemicals from North American and European  markets had dropped down drastically. China, India and the middle east were the markets that provided a glimmer of hope to the recession hit chemicals industry in 2009.

Where to from 2010 ?

Looking ahead, companies in the European and North American market regions are expected to witness a decline in market share between 2010 - 2015 due to low growth forecasts within these regions when compared to the Asia Pacific, Middle East and African regions. The demand for chemicals from growing economies in the East and West African regions have started to rise. Most of the countries in the Sub Saharan region show potential for high demand for chemicals and materials. Infrastrucure, construction, water treatment solutions, food & beverage are some of the key areas in which demand is expected to increase.

The growth strategy for chemical suppliers in these regions would be centered around the product segments and countries they need to tackle. Although South Africa would continue to play a pivotal role for demand, it is amply clear that the key growth strategy on every planner would be look beyond South Africa. This would be a sustainable strategy and with all these countries set for economic growth..it well would be on every planner's mind...

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