ที่วัดแรงดัน unearthed and analysed point out that the chemical substances sector is more and more being pushed by Environmental, Social, and Governance (ESG) issues. It also signifies that decarbonisation is often a key rationale behind the investments (and divestments) in the sector, except for Africa where investments understandably lagged again this year.
These are the findings of the latest Chemicals Executive M&A Report for 2022 released by international management consulting firm Kearney, now in its ninth edition.
“The reasoning for this is because there are merely not that many attractive target firms with suitable ESG credentials out there to amass for chemical compounds organizations seeking to make investments and consolidate on the continent,” explains Prashaen Reddy, Partner at the agency.
As the least industrialized continent, where up to 600million people nonetheless reside with out electrical energy, Africa’s chemical industry is emergent, and its markets are immature compared to its Asian, European, and Middle Eastern counterparts.
Nevertheless, the chemicals sector is a key element of Africa’s economic system. A massive advanced trade, with numerous sub-sectors, Africa’s chemical trade is intrinsically interlinked with other sectors – fuels, pharmaceuticals, plastics, and manufacturing, to name a few.
The sector is responsible for key outputs and essential commodities alongside several industries’ whole value chains.
In South Africa, the continent’s most developed chemical market, the sector accounts for around 25% of producing sales. (Chemical and Allied Industries’ Association: https://home.kpmg/za/en/home/industries/chemicals.html)
ESG and decarbonisation more and more being the dominant rationales behind M&A deals in the international chemicals sector have resulted in a strong investor appetite for M&A targets with good ESG credentials, permitting Africa’s chemical companies that embrace ESG to position themselves to draw funding.
“Although realistically Africa will still need to harness its ample hydrocarbon-based energy reserves to remain economically aggressive, there are confirmed strategies to make even fossil-fuel burning services cleaner and extra sustainable, resulting in important reductions in carbon emissions, corresponding to the use of low-carbon fuel, low-carbon hydrogen and low-carbon ammonia,” Reddy elaborates.
Africa’s nascent chemical substances sector thereby has an opportunity to leap ahead of the curve, by building sustainability and green design ideas into new chemical facility developments from the outset, and by working to decarbonise present choices through applied sciences like carbon capturing and sequestration (CCS).
Echoing international tendencies, African National Oil Companies (NOCs) continue to function prominently in the chemical business M&A area.
“Chemicals M&A activity has been relatively quiet in Africa over the previous 12 months. Africa’s oil-rich nations’ such as Nigeria, Angola, and more lately Namibia, who’ve traditionally focussed on the extraction, production, and provide of crude oil merchandise, are actually contemplating the diversification of their product portfolios as part of their future-proofing efforts. This ought to start to present ends in the medium-term,” explains Reddy.
These new opportunities arising are in downstream beneficiation of vitality merchandise additional along the worth chain.
“We may due to this fact see a spate of acquisitions of services that produce petrochemicals, ammonia, and fertilisers, for example, by these NOCs over the coming years. These acquisitions would function synergistically alongside their current oil and gas-focussed strategies,” he says.
There are indicators that Africa is decided to take ownership of beneficiation and manufacturing and turn out to be a internet exporter of chemical substances, well-poised to produce the mature markets of Asia, the EU, the USA, and its emergent ones.
“Today’s chemical substances sector businesses should navigate the mega-trends of speedy population growth, local weather change, digitisations and decarbonisation. Traditional chemical and vitality giants, and NOCs, are repositioning themselves to stay relevant in a greener future. We hope to see Africa’s emergent chemicals sector main the cost towards an environmentally and socially sustainable chemical compounds trade worldwide.”
For more info, visit www.kearney.com
Share