Archive for September 2013 | Monthly archive page

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The huge Sasol complex at Secunda forms the base of Mpumalanga’s chemical industry. At the complex, Sasol makes a range of products for fertilisers, explosives and polymers. Sasol Solvents operates 12 plants.

Kynoch makes fertiliser in Mddelburg and Schoeman Estates has a plant in Marble Hall. Middelburg-based Solchem Industrial and Mining Chemicals is a specialist in making degreasers for mining and industrial applications.

The Fluor Training Centre in Secunda is accredited by the Chemical Industries Education and Training Authority (CHIETA).

Sasol is spending

Sasol Nitro opened a new limestone ammonium nitrate (LAN) plant in Secunda in October 2012. The investment by Sasol Nitro, a division of Sasol Chemical Industries, forms part of the group’s capital expenditure of R18.8-billion in South Africa in the 2012 financial year.

Production of LAN fertiliser granules will increase to 400 000 tons per year. LAN is the preferred source of nitrogen fertiliser for agricultural products and crops. The new plant’s technology will ensure better quality granules.

The large Sasol complex is a vital part of the economy of the town of Secunda. Sasol Synfuels is one of the biggest plants and is the world’s only fuel-from-coal site operating on a commercial basis. The sulphuric acid bought by Synfuels is made into crystalline ammonium sulphate by the addition of ammonia.

The Sasol explosives factory makes a full range of commercial explosives, including specialist products used in underground mining. Three plants operate under the Sasol Polymers business unit: a polypropylene plant, a plant that separates ethylene and ethane, and a combined ethylene cracking and separation plant.

Sasol Solvents has 12 production facilities, most of which are involved in making products that can be sold. The process units make ethyl acetate, high purity ethanol and n-propanol. The carbo-tar facility has an integrated delayer coker and calciner and makes raw tar and carbon products.

JSE Listed Company

VENTURES AFRICA – Days after the unfortunate Westgate terrorists attacks in Nairobi, Kenya, South African property investor, African Land Investments, has revealed plans to spend between $25 million and $100 million in Kenya’s real estate market with an eye on buying completed office blocks, warehouses and shopping malls. In line with its multi-billion dollar sub-Sahara Africa expansion, African Land Investments’ CEO, Kevin Teeroovengadum said the firm is looking at offices in Nairobi’s Upper Hill and Westlands areas but finer details are expected by November.

Acquisition plans are also expected to gain traction in the first and second quarters of 2014. However, the company will not take on any development risk but will only acquire completed properties. The property investment company, which is presently seeking to be listed on the Johannesburg Stock Exchange (JSE) wants to grow its portfolio to at least $1 billion within the next four years with new shopping centers to be opened in Nigeria, Kenya, Uganda, Senegal and Mozambique.

Upon listing, the property investor will become the first JSE listed company that focuses exclusively on African real estate aside its home market, South Africa. Sub-Saharan African nations like Nigeria, Ghana and Kenya are becoming the hub of retail activities as urbanization and the clamour for quality goods and services by the middle-class rises.

A figure released by terrace Africa consultant, Brett Abrahamse at the African Property Investment Summit in Sandton this month says more than 40 shopping centres, with a collective worth of about $3 billion, across 11 Sub-Saharan African countries are either under construction or will soon be completed before the end of the year.

Players buying into the African property market include Africa largest grocer- Shoprite, Hyprop Investments, Atterbury and Broll Property Group. According to a report from Mckinsey, Africa consumer facing industries are expected to grow by $400 billion by 2020.

Source: Ventures-africa

Crude_Oil

“Oil distorts everything in economies,” said South African economist Dr Martyn Davies. According to Davies, CEO of investment advisory firm Frontier Advisory, African countries that rely on oil and gas are likely to become complacent in the future while non-resourced countries build agile economies.

“Oil distorts everything in economies,” says CEO of Frontier Advisory Dr Martyn Davies.

Speaking at the Africa Hotel Investment Forum in Nairobi, Kenya, Davies said over the next five years some African countries will differentiate themselves while others will remain complacent.

“Those with resources, largely, will remain complacent,” said Davies, adding that about 40 countries in Africa have either discovered or are currently exploitingoil and gas resources. He singled out Rwanda, a non-resourced country which has an agile economy.

The business analyst noted that while GDP figures indicate growth in Africa, this is being falsely confused with real development. He dismissed the ‘Africa Rising’ narrative as being too simplistic as he contrasted the infamous 2000 The Economist cover titled The Hopeless Continent with the 2011 cover titled Africa Rising.

“As always, the truth lies between two extremes. If you are in a region in the continent like easternDemocratic Republic of Congo and you see that hopeless continent cover, you kind of think it was published last week. The continent is moving in different speeds and that is something we need to recognise.”

He cited the case of oil-rich Equatorial Guinea which has the highest annual GDP per person in Africa – US$17,500 per capita – but has a mix of affluence and poverty.

“Sounds like a great place to live doesn’t it [Equatorial Guinea]? But it’s not quite is it? No, it’s not,” he said, adding that impressive figures showing Africa’s growth do not translate into real development.

He argued that “sub-Saharan African growth remains commodity driven” and the numbers are not resulting in “embedded Asian style middle-class driven economies”.

“Growth does not equal development. Oil distorts everything in economies. That is why Lagos is so damn expensive. That is why Luanda is the world’s most expensive city today.

“This is resource driven growth with varying degrees of trickle-down,” said Davies. “That is not sustainable. It is not Asian style. It’s more, dare I say, Russian style.”

This view was opposed by an executive from resource-rich Zimbabwe. CEO of Rainbow Tourism Group Tendai Madziwanyika said oil and other mineral resources will be the engine for development in Africa.

“Africa is well endowed with resources and we think resources are going to be the key igniter of growth in Africa,” he said. “In Zimbabwe we have been rated as the richest country in the world per capita in terms of natural resources. As soon as those resources are exploited, it will be the engine for igniting everything else.”

Industrial revolution?

According to Davies, Africa should capitalise on opportunities in the manufacturing sector, arguing that the continent is on the cusp of a 19th century style industrial revolution.

Davis noted that China is gradually losing its competitive edge as a low-cost manufacturing base with statistics indicating that it could shed up to 85m jobs over the next decade to Vietnam, Indonesia, Myanmar and Thailand. With only 10m people currently working in factories in Africa, Davies reckoned the continent could double its blue collar industrial workforce in a decade if it captures 10% of China’s departing jobs.

“Question for us is: is it going to be a Vietnam in Africa? Vietnam effectively has become… a sub-factory of Southeast Asia,” said Davies.

“This [manufacturing] I would argue is the greatest opportunity for this continent right now. But… wherever I go, politicians are obsessed with what’s in the ground.”

The economist argued that while Africa’s most populous nation Nigeria can easily attract foreign direct investment (FDI), other countries on the continent need to integrate regionally to survive economically.

“It’s a numbers game. If that’s the case, if it’s purely a numbers game, I am deeply concerned about the future of small countries in Africa. What about the Botswanas, the Namibias, the Malawis, the Gabons, the Burundis?”

Source: How we made it in africa

Airport-200x240-150x180

While preparing for the World Economic Forum on Africa, which took place in May in Cape Town, I read about Africa being “the next China”. I wondered about that comparison before, but can today say from a business perspective that it is inaccurate.

China is a single country with one legal and tax system, one currency and with one highly empowered government. Africa is a continent consisting of 54 different countries, many with multiple national languages, and the quality of governance within these countries varies, to say the least. Therefore, foreign investors must focus on having broad insight and knowledge on the regional markets before making strategic decisions on where to target their focus.

Recent research analysing growth potential of real estate markets in Africa identified 20 key cities, 13 of which are located in only five countries. The research revealed an important finding: diverse as they are, these cities and regions are simultaneously undergoing major industrial, social and political changes, and demonstrate urbanisation.

Ten years from now, 65 cities in Africa will have more than 1m inhabitants. Just from a commercial real estate point of view, the need for office space, shopping malls and logistics centres feels quite overwhelming; we have a long way to go.

Currently, the linkages are still at a very low level. In many instances, Africans need visas to travel to neighbouring countries, work permits are sometimes impossible to get and roads literally end at the borders. Even today, it is often simpler to fly through Dubai or Istanbul into a neighbouring African country rather than direct. While at dinner my first night in Cape Town, I sat next to a banker from Nigeria. He told me that not too long ago, to travel from Nigeria to South Africa, he had to go through London. Today, he can travel directly in five hours.

The result of continental disconnection can be summed up in one statistic: intra-Africa trade represents just 12% of all African exports compared to 65% within Europe and 40% within Asia. Doesn’t that make you think about the great thing called “European Union”?

Free trade in a common market creates wealth, free movement of labour and efficiency, and moderninfrastructure links it all together. For Africa, there is a wonderful window of opportunity. The amount ofoil and gas which has been detected in many African states would be able to provide the necessary funding to pay for all of that.

It is not rocket science. Africa needs government leaders who live up to their responsibilities; leaders who care for their people. It needs social media and press to create the necessary transparency. It needs good education to qualify the young generation for the challenges of the future.

In his vision for Africa in 2063, Swedish Finance Minister Anders Borg hoped that his great-grandchildren would one day ask: “Is it really true that in former times Africa was poorer than Europe?”

Christian Ulbrich is CEO, Europe, Middle East and Africa, Jones Lang LaSalle. This article first appeared on the World Economic Forum blog

Source: How we made it in Africa

Bruce-Potter

Bruce Potter has been the general manager of the Holiday Inn Accra Airport hotel in Ghana’s capital since its opening in November 2008. The hotel was named Best Business Hotel, Ghana, in Business Destinations’ 2013 Travel Awards, and Potter has been named Business Destinations’ General Manager of the Year, Africa, 2013. The hotel also hosted US President Barack Obama and the first family when they visited Ghana in 2009.

Describe Holiday Inn Accra Airport’s business? 

We are one of the busy hotels like many – there are 10-12 [upper segment] hotels in Accra. We all have our fair share of our customers. Business this year has been slower than the years in the past and I am putting that down to the high court case regarding the government (Ghana’s 2012 election result was challenged by the opposition in the Supreme Court), which meant that investors have been waiting to see [the outcome] before making any steps to invest.

Every year when there’s an election, business slows down five or six months beforehand on new investors. The current investors have a rally so business in some respects gets busier before the election so that ties and deals can be struck.

Once a new government starts, as in the past for me, [it’s] taken four to six months before the country gets back into proper gear and this year we’re only starting now, with the government now really having been established to stay in power. I think the next three or four months before Christmas will be a big pickup compared to the rest of the year.

What was business like before the December 2012 election?

Business is stronger in Accra for hotels, especially the large corporate establishments. Being near the airport makes it a prime location. The average stay for customers is three to four days. They come in on a Sunday, leave on a Friday. Weekends are traditionally quiet for the hotels but on average over the last four or five years, there’s been a 10% increase [in patronage].

Who visits the hotel?

We cover the world. The largest patronage for the hotel will be American followed by the UK, followed by South Africa, but we cover all the areas from Middle East to as far afield as Russia. We have customers from every part of the world. There is a trend for the Eastern countries to be developing [as visitors]. China has taken over in size although they don’t use the hotels as much but they are making a big difference to construction from where I see [it]. But internationally, all the regions are covered.

What challenges have you encountered in Ghana?

The main challenge with the customer is making sure we reach their expectation. In Ghana, the international expectation is high with the new buildings and the terrain, and the development of Accra over the last years… The staff don’t have the travel experience or the international experience to understand what that customer’s expectation will be. So the challenge is to have a training and teaching on each culture, each nation. Around the world everybody has their own preference [of hotel service].

So the quality of the hospitality industry staff is a concern?

The quality of the person is there. If anything, from my experience now in Ghana, the people here are more willing to learn and understand and are [more] committed than I’ve seen elsewhere. But the experience and what they have seen outside of Ghana is only what they have seen on television, and that is quite different to the real world.

Future plans?

The owner of the hotel has two other properties. He has long stay apartments in Accra’s Airport Residential [Area] called Holi Flats, and in the next two to three months we aim to open a five-star hotel in Takoradi [in Ghana’s Western Region, where crude oil is being produced] and that will be branded as a Best Western.

What advice can you give to potential investors?

They need to find somebody on the ground locally who they can rely on and who has got their interests at heart. It is very easy to arrive in Ghana and be overtaken by the excitement of opportunity and very quickly fall into a trap where deception and money very quickly spent can disappear. The cost of doing things in Ghana has been increasing year on year.

So potential in Ghana is enormous, but know your territory. You can’t bring the ready-made product or work practice from America, UK or Europe into Ghana and think that you can plug-and-play. There’s a whole lot of local learning to be done before you succeed.

Source: How we made it in Africa

Denis-Sorin

African hospitality group Mangalis Management is investing £315m (US$508m) in the construction of 2,200 rooms and suites spread across 15 properties in 13 African countries. The group has launched four brands covering the economy market segment with its Seen and Seen+ hotel brands, as well as the mid-upper segment with Noom Hotels and Noom Résidences.

CEO of Mangalis Management Group Denis Sorin

CEO of Mangalis Management Group Denis Sorin said the firm’s vision is to build homegrown hospitality companies.

“We have a vision for Africa. We are an African group that wants to put Africa on the map,” said Sorin. Rather than being a foreign-owned hotel operating in Africa, “our idea is exactly the opposite. When you go to a Noom or Seen hotel, you will know you are in Africa.”

Mangalis Management is investing in ChadNigeriaCameroon,NigerGhanaBeninSenegalCôte d’IvoireGuineaLiberia,Burkina FasoDemocratic Republic of Congo and Sierra Leone.

“We looked at the markets and we saw that in those countries they either had an international chain [offering] poor quality or no international chain at all,” said Sorin. “We realised it would be very easy to make a lot of money there.”

Sorin told How we made it in Africa that he expects Mangalis to start making a return on investment “very fast”.

“The trick is we are starting in West Africa [where] the hospitality industry is in a terrible shape. There is nothing; you have a lot of big brands but the quality is terrible. We are opening a hotel soon in Conakry [Guinea] so our colleague is staying in a famous brand there and he told us he had to wait 30 minutes for an espresso. We are coming with brand new buildings, well-trained staff and the service will be very personal and fun.”

Mangalis Management Group is the hospitality management arm of Inaugure Hospitality, founded in 2011 by West African conglomerate Teyliom International.

Teyliom International entered the African hospitality market in 2009 when it opened the Radisson Blu hotel in Dakar, Senegal.

Finding the right staff

Sorin said human capital is the major challenge the group faces.

“The major problem we are having today is finding staff and training them because unfortunately, especially in western Africa, this is a big problem. We are spending a lot of money and energy to hire the best employees and also to make sure we train them to be able to handle visitors from all over the world,” said Sorin.

“There are a lot of Chinese people coming here. Are we able today in Africa to serve Chinese people? Do you know, for instance, that you cannot look at someone in the eye in China? It is forbidden because it is an insult.”

According to Sorin, over the next five years Mangalis Management will be among the five largest hotel groups in Africa with more than 40 properties. The group, headquartered in Barcelona, Spain, also plans to expand across the globe.

“We want to be everywhere in the world,” said Sorin. “Next week we will be in Paris because we have a request for Europe for [our] Seen [brand].”

Source: How we made it in Africa

Liquidation

There is an increasing amount of American and European liquidated stock now moving through Africa and particularly Southern Africa. This comes primarily because of continued economic instability in certain countries, a need for alternative channels of offloading surplus stock, improved African distribution channels and a growing middle-class in Africa.

An example, a parcel of 22,000 pairs of designer jeans were originally ordered by a well-known US clothing retailer. Unable to take effect delivery or to find buyers in Europe and the US, the parcel was then sold through South African townships by local traders at R50 a unit.

This reflects the growing middleclass in Africa, which is open to discounted goods. According to the African Development Bank, the new middleclass in Africa has risen to 34% up from 27% in 2000, which has increased demand. Another key factor is that historically brands have mattered less than price throughout Africa, as it has not been bombarded with advertising, but now all this is changing and quickly, thanks to television, mobile phones and general globalisation.

The surplus product that is coming into Africa is often ageing stocks and outdated models and designs that have little demand in developed economies despite their low cost. However, in many African cities, well-known brands at low prices, even if they are older designs and models, still have extensive consumer uptake.

Here in South Africa, spaza shops make up 30% of the national retail market and much of this internationally liquidated stock is now finding its way to consumers via such outlets. Paul Greenberg, chairman of recently launched online clearance marketplace Going.co.za, says, “Consumers are as cautious as ever about spending but are also becoming more brand aware as globalisation takes hold. The challenge for businesses in rural areas is obtaining stock that is in demand without paying high prices. The company has been successful in securing liquidation stock from Europe and the US and bringing it into South Africa. It has found is that the local resellers are very quickly buying up this stock at low prices to resell to local communities at a bargain.”

According to Greenberg, the stock liquidation industry in Europe and the US is significant and now much of this inventory is finding its way into Southern African markets. The company sources surplus stocks in Europe, China, India and the US.

The trade of surplus and liquidation consumer goods in South Africa has always been an informal and fragmented business. Sellers typically utilise internal discounting methods, retail outlets or auctioneers to sell directly to consumers or to a limited pool of professional buyers. These current remedies result in redundant handling of stock, high transportation & operational costs, loss of channel and brand control and lost recovery value.

The company is part of a growing trend of e-commerce businesses that are using technology to create transparent marketplaces that businesses can use to sell assets. For more information, go to www.going.co.za

Source: Biz community

Truworths

Truworths has adopted a cautious and incremental approach to store expansion plans outside of SA in order to gain a better understanding of the operating environment and the market potential, the fashion retailer said in its annual report, released last week.

Truworths’ planned opening of a new franchise store in Luanda, Angola, this year has been delayed until next year.

Political stability and strong economic growth have seen the rest of the continent lure retailers in search of higher yields, with consumer-facing industries turning their attention to the next hot ticket — the often-quoted 1-billion African consumers.

Truworths has 564 stores in SA, 40 corporate stores outside SA in countries like Zambia, Nigeria and Ghana, with a further five franchise stores in Kenya. The group also has a shareholding of about 35% in Truworths Limited, incorporated in Zimbabwe, which operates 16 Truworths, 25 Topics and 18 Number 1 stores.

“The African expansion strategy focuses on countries showing strong economic growth prospects. The increasing trend to urbanisation and the growth in the middle-class population in these countries should support sustained growth in consumer spending,” Truworths, headed by CEO Michael Mark, said.

“The pace of store openings in the rest of Africa is dependent on the availability of store locations and the continued growth in real estate development in these countries.”

The company is not alone in its endeavours to expand northwards. Over the next three years, rival Foschini Group plans to double its African footprint from its existing spread of 104 stores, all of which are corporate owned. Foschini is eyeing both existing and new markets like Angola, Ghana and Mozambique.

Urbanisation has led to the growth of formalised retail markets that are fuelling an upsurge of consumer culture in Africa. It is estimated that there are now about 50-million middle-class households across Africa, measured as those households with incomes of at least $20,000 a year, about the same as in India.

Woolworths, whose operations outside SA involve mostly clothing and general merchandise, is also growing its footprint.

The upmarket retailer has a presence in 12 African countries, including SA, and also prefers a corporate model for expansion.

“Africa is growing fast. I’m not a big believer in the north of Africa. Nigeria is tough as hell. Where it’s easy to grow and where opportunity exists is subSaharan Africa,” Woolworths CEO Ian Moir said in August.

Woolworths has a mixture of franchise, joint-venture and wholly owned stores in Africa. The company is in negotiations to acquire its franchise business in Botswana, which consists of 22 stores. The franchisee also owns Woolworths stores in Namibia and Ghana.

“We will take that back and we will drive that business,” Mr Moir said. “We are not doing as good a job as we could in Africa, and I don’t think we’re alone in that. I think better understanding of the market, better profiling of the store, better flow of our goods into those markets, is going to make a difference for us. If we can improve our efficiencies … then we can build a bigger business and make Africa a bigger future for Woolies.”

Woolworths plans to have 82 stores in Africa outside of its home market by 2016.

While rich pickings do exist, operating conditions in African markets remain difficult.

According to Truworths, complex logistics and supplychain processes, high rental costs, complicated regulations, and high duties and tariffs make trading in some of these markets challenging.

The planning and allocation of merchandise in these new markets also poses a challenge, as does managing the product offering in countries with warm year-round climates.

Earlier this year, Mr Price said that although initial growth was expected to be limited by the lack of available sites, it would continue with its African expansion, adding more stores in Nigeria and Ghana.

Mr Price CEO Stuart Bird said: “Africa’s expected growth will ensure a significant expansion of the middle class, to whom our fashion-value offer will appeal.

“We’re present in a number of other African countries through our franchise operations. This isn’t a vehicle that we’re going to pursue … in a number of significant countries where we have franchise operations on the go, we would like to acquire those in time.”

According to UK-based Verdict retail analyst Kate Ormrod, Swedish clothing retailer H&M, which will open in SA in 2015, is late to spot the potential of the South African market, with Topshop, Zara and Mango already operating in SA.

“There is significant expansion opportunity in SA and the African continent as a whole, with H&M already operating stores in Egypt and Morocco. However, securing prime sites will be a key factor in how quickly H&M can expand,” Ms Ormrod says.

Source: eNCA

s-a-wine

Nigeria’s small but expanding wine market is beginning to attract the interest of South African wine makers. The South Africans are investing heavily in marketing and believe they can make an impact in the Nigerian market which is currently dominated by wines from Europe.

“We have been making wines here in South Africa for over 300 years,” said Goncalo Faria of DGB wines, the largest exporter of wines in South Africa. “Now we want to expose our unique wines to the Nigerian palate.”

South African wine makers first started eyeing the Nigerian market after the global financial crises of 2008/2009 led to a fall in demand from their established markets in Asia and the Americas. They are also attracted by Nigeria’s growing wine culture, large population, and GDP growth rate which averaged 7 percent per annum in the last 5 years.

Most South African wine makers enter the Nigerian market through partnership with local distributors, major hotel chains as well as retail outlets such as Shoprite, according to Faria, who has been to Nigeria numerous times to finalise such partnerships.

Some Nigerian entrepreneurs also order custom-made wines with their own chosen name brands from South African producers.

The South African wine producers say they have had to adjust their products to suit the Nigerian palate, which is sweeter than average, and Nigerian foods which are spicier.

“Most people who get to the retail wine shelves are often overwhelmed,” said Liandra Kotze of J.C. Le Roux, another South African wine maker. “So we have to pay attention to every little detail and differentiate ourselves from the pack.”

In the rest of Africa outside of South Africa, J.C. Le Roux has an office in Nigeria, as well as Angola and Kenya. Its Le Domaine sparkling wine range is one of the biggest sellers in Nigeria, according to Kotze.

The Napier Winery, another wine maker in South Africa, started selling wines to Nigeria in November 2012. Wallie Du Toit, the company’s marketing manager, speaking to the potential of the Nigerian market, said, “Nigeria is the second largest market for French Champagne in the world. South Africa needs time to put itself on the map in the global and world market.”

The size of Nigeria’s wine market is currently put at about 45 million litres per annum, although it is growing rapidly, according to Du Toit. In South Africa, the industry employs about 350,000 people and contributes $2.6 billion to the economy annually.

Wine making is relatively capital intensive, making it largely a business for big corporations. Wine farms may cost up to $100,000 per hectare to purchase at their peak, while one hectare of vineyard costs $18,000-$20,000 to plant, according to Pete Gottgens, general manager, Asara Wine Estate in the Western Cape, South Africa. Meanwhile, the first vintage is got only 4-5 years later.

Yields on the farms average six-and-half tonnes per hectare, which are then processed and stored in thousands of barrels costing up $1,400 each.

“You can also be thrown at the mercy of the weather,” said Gottgens. “Only the established wine producers have been able to make money out of this.”

South African wines in the Nigerian market usually have a retail price of between N1,000-N2,000 per bottle as they are usually up against tough competition from cheap European wines.

South Africa’s Western Cape where most of the wine in the country is grown was settled in 1652 by the Dutch, who were able to grow grapes for wine making due to the cool Mediterranean climate of the region.

Source: BusinessDay

Tech Mahindra

Accra: Seven years after India’s leading global IT systems integration provider Tech Mahindra entered Botswana, the company has expanded its footprint across nine African countries to share in the continent’s growth story and also create jobs.

“For the Mahindra group, Africa is an important continent and we want to build and share the growth of African nations by providing technology and also create jobs,” senior vice president Sriram Veeravalli Sevellimedu said at the recent commissioning of a new call centre at Abeokuta, the capital of Nigeria’s Ogun state.

A Tech Mahindra official told IANS that the African attraction was based on the fact that the continent has seen economic growth, which has seen expansion in the telecommunications, banking as well as the oil and gas sectors. “We therefore decided to be part of this growth as well as contribute to Africa’s community social responsibility,” the official added.

After setting up shop in Botswana in 2006, Tech Mahindra now operates in South Africa, Nigeria, Zambia, Ghana, Congo-Brazaville, the Democratic Republic of Congo, Malawi, Kenya and the Gabon.

“When we came to Africa, (Indian-owned telecom provider) Airtel gave us an opportunity to set up shop in seven countries, including Nigeria, by taking over their call centres,” Sevellimedu said.

The company’s operation in Nigeria, for instance, has seen a steady growth. The Abeokuta centre, which cost about $3 million to construct and another $6 million to operationalise, can accommodate 651 work stations in a built-up area of 171,240 square metres that also includes an in-house clinic and a spacious cafeteria.

There are plans to build three more call centres in Lagos and the current workforce of about 1,000 is likely to double.

Sevellimedu said that from the time the company began its operations in Nigeria in 2011, “the journey till today has been very exciting. I am proud that we were able to support local employment and development of the economy.”

Analysts say much of Africans’ unemployment problem is likely to be resolved as Tech Mahindra increases its operations across the continent.

According to Girish Nair, Tech Mahindra’s Nigeria head, the ICT industry had the potential to radically reduce the country’s unemployment rate if properly developed and suggested that the government pay serious attention to this.

Nair suggested some regulation of the communication industry to “encourage business process outsourcing and also encourage inshore/offshore companies outsource their customer services to professional companies in the industry to enhance customer experience.”

“I can boldly say that Tech Mahindra has brought into industry the best practices based on our global experience cutting across all industries worldwide,” he said, adding, “The company’s services can support the growth of the industry in Nigeria based on the global experience we have brought in recruitment and training.”

Nair cited the example of the Middle East where, he said, the government gives monetary incentives to the industry.

He also suggested the need for the continuous training of staff. Towards this end, the company has begun selecting graduates for training in India, after which they are given large IT projects to run. Last year, 20 graduates from Kenya, Nigeria and Ghana benefited from the training programme. This year, another 35 have been selected for training.

In spite of the successes, Nair said irregular power supply and insecurity have become some of the challenges confronting the company.

Source: Mizo News

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