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Anbessa: Best Foot Forward for This Ethiopian Shoemaker

6 January 2020 Comments (0) Business, Featured

When you think of an international shoe exporter, Ethiopia may not be the first country that springs to mind. Yet Anbessa Shoe Share Company, based in the Akaky Kaliti suburb of Addis Ababa, has been making its mark across Africa as well as several international export markets. 

Originally founded in the 1930s by an Italian expatriate living in Ethiopia, the company has had an at times turbulent past. Operating as DARMAR in the 1950s, it made shoes for men, women, and children. But in the 1970s, it was nationalised by the Derg Regime, the shortened name for the ‘Provisional Military Government of Socialist Ethiopia’, a Communist Marxist-Leninist military junta that ruled Ethiopia from 1974 to 1987. The fall of communism worldwide also affected Ethiopia and led to the formation of the People’s Democratic Republic of Ethiopia in February of 1987. 

The company remained under government control until 2011 when it was purchased by the current owner, Ato Tedla Yizengaw. Yizengaw, a serial entrepreneur who owns several thriving Ethiopian businesses, and who has guided Anbessa into a new era with the backing of a strong board of directors.

Anbessa exports to Africa, the USA, EU, Middle East, and Asia

With a staggering 65-70% of the domestic market, Anbessa also exports to the rest of Africa as well as the USA, EU, Middle East, and Asia. While its primary product is shoes, it also manufactures bags and belts, ensuring that no leather is wasted in the production process. 

Its growth and success has been recognised by the Brand Africa 100 ratings, with position #23 in 2018 followed by an impressive climb to #12 in 2019. It is the sole Ethiopian brand recognised in the Brand Africa charts. Export figures for 2017 exceeded $750,000, a figure they hope to grow steadily with a new factory looking to increase production levels.

In September 2017, the company moved into a new UD$15 million production plant in Akaky Kaliti. The primary aim of the new plant was to ramp up production from the previous 3500 pairs of shoes made daily to a new output of 10,000 pairs daily. But Yizengaw is an astute businessman and knows that it’s not just about quantity; he needs to improve and maintain quality to increase their export market. So the company has partnered with the Leather Industry Development Institute (LIDI), an Ethiopian organisations founded in 2010 to offer training to all areas of the leather industry and to improve skills at all levels of the workforce.

To increase their export volume from 10% to 70%

More recently, Anbessa bought the bankrupt Habesha Tannery in July of 2019 for just under 1 million US dollars. This will allow the company to not only produce their own leather but also to have a much more hands-on approach to quality control at every stage of the manufacturing process. Anbessa sees the acquisition of the tannery as a crucial part of their plan to vastly increase their volume of exports. The machinery in the tannery – which Anbessa plans to expand – was worth over US$1 million alone, so it was a clever bit of business. The Turkish company who had owned the tannery had become bogged down in default payments with the Development Bank of Ethiopia. Anbessa hopes that the new acquisition combined with their new factory will increase their export volume from 10% to 70%. 

As well as the quality of their footwear, many commentators point to Anbessa’s business practices as a major positive. All the material they use in production comes from sustainable sources, a major selling point when it comes to international markets. And their focus on fair treatment for all their workforce – up to 1,636 since moving to the new factory – also draws praise. The staff received discounted meals in the factory’s modern and clean cafeteria. Every staff member also receives free medical check-ups, and the factory itself meets stringent safety standards. The company also adheres to International Labor Organization (ILO) regulations, ensuring that all staff are of minimum working age and that no minors are ever employed. 

With experienced and forward-thinking management, a dedicated and well-treated workforce, and quality products that are being more and more recognised internationally, Anbessa is a success story that looks like it will keep on growing. 

Photos: resolution.studio / squarespace-cdn.com / twimg.com

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Transmashholding’s African Adventure

23 December 2019 Comments (0) Africa, Business, Transport

Andrey Bokarev’s railway machine manufacturing company, Transmashholding, acquires its First Factory in Africa as the Continent Seeks to Revitalise its Railway Systems and Trains

With Africa, the second-fastest-growing continent from an economic perspective, development of efficient and cost-effective transport and logistics infrastructure are of paramount importance. The continent is not only rich in resources but is also fast developing as a robust manufacturing centre. The challenge for these economies is to ensure swift transport of containers and goods to the various African ports and onto global markets. 

Rail transport is at the forefront of any logistics development and recent years have seen increased investment and new initiatives. And with the planned Africa Integrated High-Speed Network – part of the Agenda 2063 Continent Development Plan – gathering steam, almost every African country is now looking to invest, or seek investment, in improving their railway infrastructure and stock.

The Real Way Forward is the Railway

The main hurdle facing these plans is that existing railways systems, mainly dating from the colonial era, are often in poor states of repair or the routes are unsuitable for future plans. The latter of these factors is mainly due to colonial planners usually using the shortest or quickest routes rather than ones which brought benefits to the country as a whole. Another long-range hurdle to continental integration is the fact that there are at least six different gauges in use. 

The inauguration of Transmashholding’s (as TMH Africa here) first African factory in April of 2019 illustrates the Russia-based conglomerates’ commitment to expansion and investment across Africa and Company’s president Andrey Bokarev business talent (a few months after a €1bn five-year contract between Egyptian National Railways and Transmashholding-Hungary  were signed in 2018.) The 45,000m² plant, situated in Boksburg, Gauteng, has been producing rolling stock since 1911, thus allowing TMH Africa to hit the ground running with an existing facility and workforce. 

The South African factory marks stage one of TMH International’s planned investment in Africa of over $32 million, and initial plans at Boksburg include the upgrading of the factory and machinery as well as retraining and upskilling of current employees.

TMH Enters the South African Train Market

It is also worth noting that Gauteng Province is the location of the Tambo Springs Project, a greenfield transport hub comprising road, air, and rail, and valued at $15 billion. There is also the planned container terminal at Ekurhuleni, some 20km from the new TMH International facility. 

South Africa is now the leading country in Africa for rail freight – at 99.5Mt a kilometre – and the map below shows not only how intensive the African Union’s plans for developing transport infrastructure is, but also how central to that plan South Africa is. 

Jerome Boyet, CEO of TMH Africa, sees the company’s role in Africa as being a local partner with local and global manufacturing companies seeking to fulfil orders across Africa as well as producing their own rolling stock. As Boyet pointed out, a large part of their decision to choose this location was based on: “…our understanding that South Africa’s real potential to become a leader in rolling stock manufacturing for Africa remains untapped.”

With continued economic growth and inward investment to transport systems across the continent, most observers would agree that TMH Africa’s investment is one with long term promise.

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7th Single Window Conference Looks to Boost Trade Links

25 November 2019 Comments (0) Africa, Business

Between the 17th and 19th of September 2019, the 7th annual International Conference on Single Window of the African Alliance for Electronic Commerce (AACE) was held in Yaoundé, the capital of Cameroon. Present were leading players in logistics and supply chains, and over 40 delegations for foreign countries including 18 African countries. 

The idea behind a single-window system is to improve the efficiency of international trade, in this case particularly the concept of intra-African trade across the region. In order to work properly, this would require a single entity or location where companies would submit all their documents such as customs declarations or permits for import and export. So, if a company in Kenya wished to export its goods to 12 other African countries, rather than going through 12 separate sets of regulations and multiple submission of documents, they would instead do it all through one single entity. 

A single market with a billion consumers

Africa has seen a lot of rapid economic development in recent years, much of that down to cooperation across the continent. Recent developments have included the African Continental Free Trade Area Agreement (AfCFTA) in March of 2018, which has committed to removing intra-regional tariffs on some 90% of goods. If this agreement is successful it will create a single market with in excess of a billion consumers and a total GDP of over US$3 trillion. It was an agreement that the continent needed badly; in 2017, African intra-region trade only accounted for 17% of exports. When compared to Asia (59%) and Europe (69%), it is clear that as a potential trade bloc, Africa was lagging behind and missing out on the many benefits that come with such high rates of ‘local’ trade. 

The September conference focused on two main aims; the growing potential of e-commerce across the continent, and optimizing the supply chains of landlocked countries with no port access. The latter of these is something that will need massive investment in infrastructure, particularly railways and roads. And we are seeing that investment already happening across Africa.

450 million African mobile users and 300 million more expected

But it is the e-commerce factor which is perhaps the most exciting as it needs a lot less in terms of total investment. In some ways, Africa has been able to leapfrog many developed nations in terms of developing e-commerce. With lower rates of banking and credit card use, there has been a need to develop innovative payment methods such as e-wallets which people can top up at local agents, giving them a balance on their mobile with which to purchase goods. And with generally widespread internet penetration across much of Africa, there are large numbers of new consumers coming online. With around 450 million mobile users currently and another 300 million expected to have access in the next 3 years or so, companies are recognizing the potential of this reservoir of consumers with disposable income. 

The concept of the single window is a natural step in the development of AfCFTA. These annual conferences aim to develop the single window concept following the guidelines already established by the World Trade Organisation (WTO) and the World Customs Organisation (WCO). While a continent-wide single window may be some years off, The African Alliance for e-Commerce hopes to establish national and regional ones as a stepping stone to a continental one. Many African countries are already cooperating on cross border trade already, with several trade zones already in operation. Of particular note is the East African Community (EAC) which comprises Burundi, Kenya, Rwanda, South Sudan, Tanzania, and Uganda. It has shown the best progress as far as moving towards a common trade area is concerned and could serve as a template for the continent as a whole. 

A single window to reduce tax and to optimize the African potential

Developing single window systems will reduce tax and tariff burdens and make the movement of goods across borders far easier than the present. But there are still many barriers to successful implementation. The continuing conflict in some areas, low-level corruption at borders and customs points, and even the motives of individual countries may hamper a quick solution. But with the massive potential for businesses, there will be a continued push to establish an Africa-wide single window in the near future.

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Transmashholding Signs Major Egyptian Deal

7 November 2019 Comments (0) Business, Transport

Summary: The deal between Egyptian National Railways and Transmashholding-Hungary Kft. looks like being the start of a long and fruitful relationship.

When Egypt’s first railway system was commissioned by the Regent of Egypt and Sudan, Abbas I, in 1851, he chose for it to be built by one of the 19th Century’s greatest engineers, Robert Stephenson. The vision was that Egypt’s transport system would rival the best transport systems globally.

Sadly, after many years of poor maintenance and management, Egypt’s rail system has in the last few decades become known as one of the world’s most dangerous. This has led to the Egyptian government making the decision to revitalise the entire infrastructure and rolling stock as well as investing in new routes. This was an important decision, not only in terms of improving safety but also in terms of economic development. Egypt’s rail network not only transports some 1.4 million passengers a day but is also a vital component in goods and container transport, especially when you consider that Egypt has the highest container traffic in Africa with almost 7 million units shipped annually. As most of this traffic passes through the Suez Canal, increasing rail capacity would help the country diversify its commercial transport networks.

1,300 passenger cars in 5 years with ENR Worth Over 1 Billion Euros

The announcement in September 2018 that Egyptian National Railways (ENR) had signed a contract with Transmashholding-Hungary Kft. (a Russian-Hungarian consortium) to produce and deliver 1,300 passenger cars represents a major part of the Egyptian government’s plans. Worth in excess of 1 billion Euros, the contract is for five years from the date of signing. Such a deal is also based on the close economic links between Egypt and Russia, and the choice of Transmashholding is no coincidence: the company led by an influential Russian businessman, Andrey Bokarev, is a world leader in railway manufacturing.

Transmashholding-Hungary Kft.’s production of the rolling stock represents a major part of Egypt’s planned investment in their railway systems, with over 3 billion Euros of total investment already announced. It is also the largest single contract ever agreed by Egyptian National Railways (ENR). Transmashholding-Hungary Kft. beat bids from companies from several other countries, including China, India, and Italy.

Production of the five different classes of passenger car will be split equally between the Hungarian side of the consortium, Dunakeszi Jarmujavito Kft., and the Tver Carriage Works in North-western Russia, which is owned by Transmashholding.Final assembly and fitting of the rolling stock will take place at a specially created plant in Egypt which will be a partnership between TMH International AG (part of JSC Transmashholding) and the National Organization for Military Production in the Arab Republic of Egypt. The plant will also enable maintenance of the new passenger cars.

A radical change for Egypt

Martin Vaujour, CEO of TMH International said: “This move could mean a radical change for the country because Egypt, despite being a very large country, has not really developed any railway industry at all.”

Even with such a massive project just signed, Transmashholding-Hungary Kft. is already looking to the future with plans to improve the connectivity of, and invest in, Cairo’s metro system which carries 4 million passengers per day. They are also looking at the potential of suburban trains for future projects.

With this initial contract signed at the beginning of Egypt’s redevelopment of their railway infrastructure and stock, future projects and involvement look promising for the Transmashholding-Hungary Kft. consortium.

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Making a Mark in Africa: Global Brands Dominate

8 October 2019 Comments (0) Africa, Business

With Africa being one of the fastest growing markets for consumer goods worldwide, global brands have increasingly focused their efforts on the continent’s vibrant economies. Two major factors are worth noting here; Household consumption in Africa has outpaced GDP growth, and GDP growth across Africa is consistently outperforming global averages.

Consumer expenditure in Africa has been growing at a compound rate of 3.9% since 2010, reaching a total of $1.4 trillion in 2015, with that figure expected to reach $2.5 trillion by 2030. (1)

The planned Continental Free Trade Area (CFTA) is also due to be implemented by 2030, and if successful, will offer a single continental market for consumer goods and services as well as free movement of investments and businesspeople. This opens the doors to a potential 1.7 billion customers (based on projected population by 2030). 

African consumers tend to be loyal

With such ambitious plans and rapid growth, cementing a place as a major brand across the continent is a priority, not only for global corporations but also for African brands. 

Research has shown (2) that African consumers tend to be loyal to their chosen brands but also discerning in their choice of brand. While currently most consumer activity in Africa tends to still happen in informal market settings, there is, and will continue to be, a shift towards more modern shopping settings, including shopping malls and e-commerce, two sectors which will offer good growth potential at several levels. 

African brands have been declining year on year

However, the latest Brand Africa 100 ratings in May – published every year by African Business Magazine – show a continuing worrying trend, at least as far as African businesses are concerned. From a high of 25% of the list in 2013/14, African brands have been declining year on year and are now at a low of 14% from 17% in 2017/18. Asian brands have also suffered, falling 10% from the previous year. US brands saw the largest growth, up 17% to 28%, while the dominant European brands rose 2.5% to 41%. 

As you would perhaps expect, the leading brands are global household names, with Nike, Adidas, Samsung, and Coca Cola all retaining positions in the top 4 from 2017/18. The highest ranked African business is South Africa’s MTN Telecoms at 8th (down 2 positions from last year). The company operate in 21 African countries so far with more expansion planned, so their top 10 position should not only be safe but may improve again in future lists. 

Anbessa Shoe Share Company: the most impressive African performer

Ethiopia’s Anbessa Shoe Share Company, originally founded in the 1930s by an Italian expat, was the most impressive African performer. In the 2019 chart, it moved up 11 places to #12. As well as having around 65-70% of the Ethiopian shoe market, the company also exports to USA, EU, Middle East, Asia, and Africa.

There were only two new African names on this year’s list, South African retailer, Pick n Pay, who re-entered at #84, and Africa’s largest e-commerce firm. Jumia, who debuted at 74 after a successful launch on the New York Stock Market in April. 

With continued economic growth forecast as far ahead as 2030, African companies must now look at how they can compete with the global giants. 

(1) https://www.brookings.edu/wp-content/uploads/2018/12/Africas-consumer-market-potential.pdf

(2) Spivey L. et al. (2013) “Ten Things to Know About African Consumers: Capturing the Emerging Consumer Class,” Bcg.perspectives.

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Adamant, the new african digital adventure

11 September 2019 Comments (0) Africa, Business, Entertainment and Lifestyle, Featured

Adamant is a new digital medium aimed at connected African youth. The media promotes continental ambitions through a network of creative and offbeat influencers. Meeting with its founder Denis Cantin and its program manager Angélique Amougou.

  • Denis Cantin, you are the founder of Adamant Media, before talking about your new digital media, let’s talk about you and what led you to create Adamant?

Denis: I was heading the content sales over Europe-Middle East- Africa for A+E Networks (Disney / Hearst) for 5 years in London and I thought there was still a place in Africa for high level Entertainment media , gathering Africans and Diaspora, offering the best of comedy Series, sketches, Beauty, Sports and news. And that media should be digital, free and on mobile to reach everyone. I left my job last summer and we have launched Adamant on the 1st of April 2019.

  • Can you explain how Adamant works? 

Denis: We are settled like a proper Media group and we control the whole chain from Creation and Production to Broadcast and Advertising: 

First, adamant is the media of Continental Entertainment. Millions of people watch us and enjoy fresh high quality African content on a daily basis. 

adamant is also a studio, aggregating and supporting the best producers and talents from every corner of West and central Africa. 

Last but not least, adamant is an unique expertise in digital communication and marketing over the the whole Continent. Africa is experiencing massive growth you could compare it to a startup for that matter. Africa is as digital as you can get. We are in our element. Our logline is indeed “ Digital, Continental, adamant”. 

  • Daty Niang – adamant
  • Angélique Amougou you are in charge of influencer relations at adamant, what drives the talents and influencers to join Adamant, according to you? 

Angélique: Quite honestly, there’s no better home than adamant for talented influencers. Our business model has been set up to allow comedy influencers, our A-Producers,  to grow without losing their soul and their business. We encourage creation, we finance the best talents. Not only, we are also sharing our experience in terms of storytelling , post editing, promotion and access to sponsors. 

Some influencers are already big in their own country like the super popular duo the Pakgne (Murielle Blanche and Marcelle Kuetche) in Cameroon with already 1 million followers.  With us, they have become continental stars. Some are less known, and when the adamant team feels they’re good, we offer them an A class treatment and after a few weeks, it looks like they have always been famous.

“babatché à tout prix” was watched by a few thousands people before we got involved, it was promising but still limited. Now with adamant, each of their episodes is followed by between 300 000 and 2 million people! They are some genuinely International stars now. We did the same for the couple Thakai and many others. We have now the biggest team of influcencers in this part of the World. And we can tell you: each and every of them count. 

African talents are amazing and we are glad to share this with the rest of the world.

Les gos Babatche – adamant
  • What kind of audience Adamant is targeting ? 

Denis: Our audience is mostly between 18 and 44 years old. They are adults and parents. Social networks in Africa are usually male skewing but we are very balanced between male and female at 50/50. Our audience is connected and engaged. Our engagement rate is just tremendous: 34%!  Our audience is urban and strongly connected. Our first cities are Abidjan, Dakar, Douala and Paris but we do not only reach the big cities; adamant is followed in every corner of Francophone Africa and the world. You can’t imagine how global we are.

  • What new programs are you trying to put in place? 

Denis: adamant will remain pure entertainment and close to our audience’s everyday life. So we won’t explore genres like crime, sci-fi …Unless there is a twist, a good idea and lots of fun! 

 I will tell you that the quality will only go in one direction: up. And more and more content will be original and never seen on line. Stay tuned!

Angelique: Talent wise, we have wonderful talents in the key territories Senegal, Côte d’Ivoire, Cameroon now. We are about to contract with influencers in Burkina Faso, we are digging in Mali, Madagascar, Guinée. Be sure we won’t forget any territory.

  • So you are producing branded content, what do you bring to advertisers that is unique to adamant?

Denis: The affinity. adamant is close to our audience thanks to a very dedicated team and our influencers. We make people laugh on a daily basis. There is no better communication than a smile.

And with this smile, we provide the top notch values services of a digital agency with reflection, strategy, tactics, ads and even more important, high value video production. We invent formats and new series on demand. We clearly do our best to spoil our clients ad we are committed on our targets and KPIs.

  • What are your ambitions, your future plans or projects for Adamant?

Denis: adamant is fast and furious (smile). We are launching this week our free VOD site with all our videos. We will announce soon a business partnership with a leading Film production and talent agency in the heart of Nollywood. This allows us to produce both in French and English original with top influencers. We are post producing our first animation for pre-school children with our talent’s voices. We will of course expand out of the Francophone area soon, but first thing first, we have to make sure our clients are spoiled and that we remain the leaders.

Ah yes, maybe a last one;  the Studio veteran is now talking, my sincere dream would be to produce the Pan African comedy feature Film starring all our great influencers. And this will come true sooner than later!

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Russia’s Return to Africa

11 June 2019 Comments (0) Africa, Business, Featured

Once an important player on the African continent, Russia has renewed its aspirations for economic, military, and trade ties with several African nations. From Algeria to Zimbabwe, Russia is investing in energy and resource projects, lending military and diplomatic support to embattled African leaders, and once again positioning itself as an influential presence in the region.

Historical ties with Africa and shifting interests

During the height of the Soviet Union, newly independent African countries such as Mozambique, Egypt, the Democratic Republic of Congo, Somalia, Ethiopia, Angola, Benin and Uganda all received valuable materials and ideological support from the Russian superpower, including training and education to many of these country’s leaders. The Soviet Union’s influence across African states was widespread until the fall of the Berlin Wall and the dissolution of the regime in 1991.

Fast-forward to 2018, and Russia appears set to return to its influential position over the continent – yet with a very different approach and goal in mind. As African nations are opening up to being courted by new strategic partners, the time is ripe for new foreign entrants to make their mark on the continent. Russia is thus in a good place to re-establish itself across the region – and indeed appears to be doing so – via strategic investments in energy and raw materials.

Investment in Energy and Minerals – new opportunities arise

According to ISS Africa, trade and investment between Russia and Africa grew by 185% from 2005 to 2015. Whilst in 2017 alone, Russia’s trade with Africa rose by 26% to $17.4 billion. Senior fellow at the Carnegie Endowment for International Peace, Paul Stronski says there are many advantages for Russia engaging with resource laden countries on the African continent. With a shortage of minerals such as chromium, bauxite, and manganese, all of which are important to industry, Russia is looking for rights to extract minerals, oil, and gas in less complicated or costly places than Siberia and the Arctic, Stronski says. With a strong presence on the national soil and a proven expertise in raw material extraction, no doubt that CEOs such as UMMC’s Iskander Makhmudov will be setting their eye on the continent sooner or later.

Economically, the focus of Russian investment is on energy. Russian power companies, such as Lukoil (oil), Gazprom (gas), and Rosatom (nuclear energy) are already active across the continent, with most activity being in Uganda, Nigeria, Egypt, Angola and Algeria. Others, such as Kuzbassrazrezugol (a coal mining organization, and also a company Iskander Makhmudov has stakes in), are already global exporters and could very well aim to penetrate the African market in the future. Others, such as Transmashholding (also a company Iskander Makhmudov has interests in), already trade with Egypt and South Africa – admittedly some of the most developed markets on the continent.

According to energy news site Power Technology, a deal between Rosatom and Egypt’s Ministry of Electricity to create the country’s first nuclear power plant has already been finalized. As most large Russian corporations are fully or partially state-owned, Russian interest takes the form of public/private partnerships.

Indeed, although Russia’s main arms exports are to Asia, according to the BBC, sales to Africa continue to rise, strengthening Russia’s position on the continent.

A growing geopolitical influence…

Another reason Russia may wish to gain a foothold on the continent is that diplomatically, Africa is a geopolitical strategic landmark. African states comprise of the largest voting bloc across diplomatic, security and economic institutions, such as the UN Security Council. Therefore, holding influence over Africa could have a global reach. Other emerging economies, such as China and India, have also expanded trade significantly across the African region. According to US research group the Brookings Institute, China provided some $60 billion in financial support to Africa in 2018.  

Although Russia lacks the financial muscle of China, through strategic investments, military might and soft power, the country will see a gradual increase in influence across the African continent, according to ISS Africa research analyst Stephanie Wolters. She believes that, amid a new ‘scramble for Africa,’ it will be up to African leaders to exploit the renewed attention from Russia by brokering favorable deals on good terms, rather than fall victim to previous exploitation by Europe and the West.

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South Africa’s Gold Fields ties up with Canada’s Asanko in Ghana

29 March 2018 Comments (0) Actualites, Africa, Business, Mining

JOHANNESBURG (Reuters) – South Africa’s Gold Fields will buy a near 50 percent share of Asanko Gold Inc’s Ghana subsidiary and take a stake in the Canadian miner in a $202.6 million deal announced on Thursday.

Investors were cautious, questioning whether the African joint venture would make a return any time soon and sending Gold Fields’ shares down nearly 6 percent, in an already weak bullion sector.

Gold Fields said in a statement that as well as acquiring half of Asanko Gold Ghana’s 90 percent interest in the Asanko Gold Mine, its Ghana subsidiary will also acquire associated properties and exploration rights in the African country.

Shares in Goldfields fell more than the broader bullion sector – which was down 2.8 percent – tumbling 5.9 percent to 46.01 rand by 0858 GMT.

“There’s always some execution risk, they are buying these things but can they actually make money out of it, is what the market is asking,” said Cratos Capital equities trader Greg Davies.

The deal includes an upfront payment of $165 million on closure of the transaction and a deferred payment of $20 million. Gold Fields’ subsidiary will also take a 9.9 percent stake in Toronto-listed Asanko for $17.6 million in a share placement.

The South African miner said the $203 million deal fitted in with its strategy to improve its portfolio by lowering all-in costs and extending mines’ lifespans to enhance cash generation.

Asanko, which is expected to produce 253,000 ounces of gold annually from 2019 to 2023 with a life-of-mine of at least 15 years, also has the potential to make further discoveries, Gold Fields said.

“The Asanko joint venture will give immediate access to low cost production ounces, increasing the quality of the Gold Fields’ portfolio,” the South African miner said.

(Reporting by Tanisha Heiberg and Nqobile Dludla; Editing by Susan Fenton)

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Djibouti plans new container terminal to bolster transport hub aspirations

28 March 2018 Comments (0) Actualites, Africa, Business, Economy, Infrastructure

ABIDJAN (Reuters) – Djibouti is in talks with French shipping company CMA CGM to develop a new container terminal at an initial cost of $660 million as part of the tiny African country’s bid to expand into a sea and air transport hub for the continent.

Aboubakar Omar Hadi, chairman of the Djibouti Ports and Free Zone Authority (DPFZA), told Reuters on Tuesday that the authority hopes to award the concession in July. It was also prepared to buy out DP World’s stake in an existing container terminal to end a row with the Dubai port operator and avoid arbitration, he said.

Djibouti’s strategic location has led the United States, China, Japan and former colonial power France to build military bases there.

Its ports already serve as an entry point for cargo which is then sent by smaller vessels to ports along Africa’s eastern coast, but it is now seeking to become a sea-air transshipment hub for the entire continent.

To do this, Hadi said DPFZA was also planning to construct a $350 million airport and expand Air Djibouti’s fleet of cargo aircraft.

The new container terminal project could break ground as early as September with construction expected to take 24 months, Hadi said, speaking on the sidelines of the Africa CEO Forum in Abidjan, Ivory Coast.

“We are going to build DICT, Doraleh International Container Terminal. This is a new plan,” he said. “We are in discussions with CMA CGM.”

The port authority was not in talks with any other potential partners, he said. CMA CGM did not immediately respond to a request for comment.

Once operational, Hadi said the port terminal would boast an annual capacity of 2.4 million twenty-foot equivalent units (TEU), but subsequent expansion phases would bring that up to 4 million TEUs.

Fifteen percent of the project’s cost will be financed through equity. Of that, the DPFZA will contribute 85 percent, with its concession partner providing 15 percent. The rest will be raised via international institutions and banks.

“We are targeting trans-shipment,” Hadi said.

 

DP WORLD DISPUTE

Meanwhile, Hadi said the port authority was ready to end a dispute with DP World over its cancellation of a concession contract for another facility, the Doraleh Container Terminal, by buying out DP World’s 33 percent stake.

Djibouti ended the contract with the Dubai state-owned port operator last month, citing a failure to resolve a dispute that began in 2012.

DP World has called the move illegal and said it had begun proceedings before the London Court of International Arbitration, which last year cleared the company of all charges of misconduct over the concession.

“We are prepared to pay them their 33 percent of shares,” Hadi said. “There is no need for arbitration. We are going to buy their shares.”

 

(Reporting by Joe Bavier; Additional reporting by Gus Trompiz in Paris; Editing by Aaron Ross and Susan Fenton)

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South Africa’s Q1 business confidence rises 11 points to 45

14 March 2018 Comments (0) Africa, Business

(Reuters) – South Africa’s business confidence rose in the first quarter by 11 points in a sign that the country’s economy is picking up pace, a survey showed on Wednesday.

The Rand Merchant Bank (RMB) business confidence index compiled by the Bureau for Economic Research rose to 45 points in the first quarter from 34 points in the fourth quarter but remained below the 50-mark separating the net positive and negative territories.

“First quarter confidence jump is driven more by the expectation that the recent (mainly) market-friendly political development will boost activity levels in future than an immediate improvement in the real economy,” chief economist at RMB Ettienne Le Roux said.

Business confidence was dented by policy uncertainty under the leadership of Jacob Zuma but economists say President Cyril Ramaphosa’s election as leader of the ruling African National Congress in December, and as president last month, has raised expectations that the country will make economic reforms.

South Africa’s economy grew more than expected at the end of last year as agriculture and trade recovered, data showed last Tuesday, boosting its chances of avoiding a potentially debilitating credit ratings downgrade.

Earlier in the month, The South African Chamber of Commerce and Industry’s (SACCI) monthly business confidence index (BCI) fell to 98.9 in February from 99.7 in January as exports, imports and retail sales fell.

“It goes without saying that the current uncertainty around land reform needs to be resolved as quickly as possible. If allowed to linger, the latest rise in the RMB/BER BCI (Business Confidence Index) could easily fizzle out with little or even no enduring positive impact on business capital expenditure and the economy at large,” Le Roux added.

 

(Reporting by Rahul B and Justin George Varghese in Bengaluru; Editing by Matthew Mpoke Bigg)

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