the uk’s governments ambitions
TRANSCRIPT
UNCLASSIFIED
AFRICA- Size Context
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UKTI East Africa
•UKTI East Africa is made up of 4 relatively
similar markets:
Kenya, Uganda, Tanzania and Ethiopia
•Combined Population:196 m
•Combined GDP: over $100 Bn
•Combined EA Trade (Goods) with UK in 2013:
• UK Imports - £490m
• UK Exports - £760m
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Why Consider East Africa?
$100 billion in
planned infrastructure
investments
290GW of energy
capacity vs. base of 7GW
Significant Resourcediscoveries despite low levels
of exploration
Global fooddemand will grow 70% and
60% of arable land in Africa
Growing middle
class and formal retail
Highly profitable bankingmarket despite low penetration
Private equityincreased 2.5x from 2011-12
Emerging ICT hub but still huge
upside from broadband penetration
Manufacturing potential as
China is projected to lose 100 million jobs
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Increasing investment in infrastructure
Top Projects
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42
10 ▪
Rwanda 6
Uganda
Ethiopia
$113 M
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Tanzania
Kenya
Total
▪ Lamu Port - LAPSSET
▪ Eastern Electricity Highway
▪ Airport, bypass
▪ Tanzania, Rwanda, Burundi rail
▪ Mwambani bay Musoma Port
Rail
▪ Karuma hydropower plant
Mombasa-Malaba-Kisimu rail
line▪
▪ Saka Kigali Railway
▪ Geothermal power plants
▪ Renaissance Dam
Addis-Djibouti Rail
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4|SOURCE: Global Growth Compass
Creates big opportunities
• Cement
Basic • Steel (structural,
materials rods, bars)
• Bitumen
• Furniture
Equipment • HVAC
• Electrical
• Tubes and pipes
• Fittings
• Finishes
• Lighting
• Wires and cables
• Construction
Services • Plumbing
• Electrical
• Drivers
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Kenya key facts
• Area - 583,000 sq. km
• Estimated GDP 2014 - 5.6%
• Inflation: 2010 - 4.1% / 2011 - 14.0% / 2012 projected - 9.0% thereafter to 5% in the medium-term
• Debt / GDP - 48%, B+
• Tax collections - approximately 25% of GDP
• Kenya is the Entry Point to:
• EAC - 150 million, among the fasted growing regions in the world
• Ethiopia, South Sudan, DRC - 150 million
• Discovery of Oil, rare earth, Geothermal and others is a GAME CHANGER
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Eastern Africa Underexplored
• North Africa
– 19000 wells
• West Africa
– 14000 wells
• East Africa
– >500 wells
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• Four sedimentarybasins -399,519 Km2
– Lamu
– Anza
– Mandera
– Tertiary Rift
• Many sub basins
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Eastern Africa:Investing inService Co
• Highly specialized• Strictest standards for operations
and safety• Critical services (mistakes ground
operations and increase lossesexponential)
• Heavy investment in serviceprovision + R&D ($$$)
• Not available in KE
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Fuel
Camps/Accom.
Emergency Services
Waste Management
Security
Medical
Crane Hire
Personnel
Transport
Freight Forwarding
Custom
Clearance
Facilities
Management
IT Services
Telecoms
Hotel/Accom.
Office
Supplies
HR
Unskilled
Labour
TrainingGeneral Trades
Catering
Communications
FPSO/Wellhead
Tangibles
Rig
HireFeed
Seismic
ServicesWell
Services
Environmental Services
Field Construction
Int. Freight Services
Site Prep.
Specialist Trades
Inspections
Infield
Transport
Spare
Parts
Infield
Services
Civil
Mechanical
Electricals
Mud/
Cuttings
Construction
Materials
INDIRECT SERVICES• Mostly available and well serviced in KE• Not very specialized but requires some
expertise• Need to improve standards• Some investment required ($)
DIRECT SERVICES• More specialized• Stringent compliance to safety and
operational standards• Requires significant investment ($$)• Not widely available in KE
SPECIALIST SERVICES
OIL&GASVALUECHAIN
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Kenya Oil & Gas Industry
2014
• Upstream exploration, Farm in and Farm outs. Support services and partnering with National Oil corporation in their upstream ambitions
2014
• Infrastructure development – LAPSSET, Pre Feasibility study for pipeline ongoing by Toyota Tsusho. LNG Export Terminal, Airports, Roads, Resort cities. EOI welcome by PPP unit.
2014/5
• Education and Skills (especially for O&G) – development of training centres(centre f excellence), collaboration with UK universities and technical and vocational institutions.
2015/6• Onshore Oil and Gas distribution networks – Tender for EPC of pipeline and associated
infrastructure to be floated by MoE by April 2015
2020
• Construction, Operation & Maintenance of proposed Mombasa LNG Plant.
• Midstream and Downstream opportunities.
• Gas monetisation project other than LNG (Fertilisers, Methanol, etc)
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• Over 60 British companies based in Kenya.• Total Bilateral trade over £1.3bn.• UK still the largest cumulative investor in Kenya.• Inflows of Foreign Direct Investment (FDI) to Kenya expected to average US$1.3
billion annually between 2014 – 2018 due to Oil & Gas finds.• Annual GDP growth projection for 2014 5.1%• No restrictions on repatriation of funds or controls on foreign currency.• Educated Workforce.• Only developing country that hosts a UN agency Headquarters – UNEP and UN
HABITAT.• Over 100 diplomatic missions.• Variety of strategies to enter the market: Licensing; Joint ventures; Wholly owned
subsidiary; Franchising• Growing Middle Class• Kenya Vision 2030: www.vision2030.go.ke• Significant Oil Discoveries from 2012 – Present – Tullow Oil main Player – Over 1Bn
Barrels of recoverable resources in place.
Why Kenya?
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Challenges (Opportunities) of Doing
Business in Kenya(East Africa)• Bureaucracy
• Poor Infrastructure
• Political Environment
• Corruption
• Cost of Doing Business
• Security Threats
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Summary - Opportunities in East Africa Construction and Infrastructure. Minerals Education and Training and local content. Real Estate – 25% return on investment in Kenya. Aid Funded Business. Environment & Waste Management. Transportation and Logistics. LAPSSETT Energy & Power Tourism Oil and Gas ICT Banking and Financial Services Agriculture Food and Beverages
Interest is growing and investments are on the rise – but not just from the
UK
Tata Group is in talks with partners in Africa to set up new assembly lines for
commercial and passenger vehicles in Kenya.
Mobile phone maker Tecno has announced plans to establish a handset assembly
plant in Kenya
Samsung is set to open a television, laptop and printers’ assembly plant in Kenya
positioning Nairobi as the nerve centre of its operations in East Africa
Huajian Group, a Chinese shoe maker, plans to build a manufacturing zone in
Ethiopia that may generate $4 billion of exports a year within a decade
TVS Motors has just begun production at its assembly plant at Kenya, after
concluding trial production of its Star City motorcycle
Clarks have recently opened their second store in Nairobi
Chery Automobile is to become the second Chinese vehicle maker to build an
assembly plant in Kenya
50 Turkish Textile Factories to Relocate in Ethiopia (August 2013)
Foton Motor group has opened an assembly plant in Nairobi in a bid to explore the
market in Kenya and East Africa, March 2012|
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UKTI Tailored Services to Meet your
Specific Needs
Product launches and seminars
Networking and relationship building
Publicity and Marketing
Securing meetings with ministers / officials
Market Research
Identifying Potential Customers or Partners
Advice on Market Entry Strategies
Arrangement on programmes for market visits
East Africa OMIS
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Recipe for Success
Do your researchQuality is paramountMeetings – simplicity key, short introduction importantEtiquette – humility will win friendsPatience: right market for medium-long term successInvest in relationshipsIdentify appropriate option for doing businessDue Diligence
THANK YOU