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SABMiller, Coke agree concessions with South Africa over bottling merger

4 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – SABMiller and Coca-Cola have agreed concessions with the South African government to win approval for a deal to combine their soft-drink operations, the companies said on Wednesday.

The concessions, agreed with the South African Ministry of Economic Development, include a three-year freeze on layoffs and the companies investing 800 million rand ($54 million) to support small South African businesses.

SABMiller, which is in the process of the being taken over by larger rival Anheuser-Busch InBev, agreed in November to team up with Coke to create Africa’s largest soft drinks bottler, Coca Cola Beverages Africa.

The business will have annual sales of $2.9 billion and ambitions to corner the fast-growing market on the continent.

The all-equity deal was given a preliminary approval in December by South Africa’s Competition Commission, which said it could go ahead on several conditions including Coca-Cola Beverages Africa limiting jobs cuts to 250 and making sure it buys cans, glass, sugar and crates from local suppliers.

The Commission investigates deals for any antitrust issues and recommends remedies to the Competition Tribunal, which makes a final ruling. A Tribunal hearing on the proposed deal is due to start next Monday.

South Africa has a history of taking its time over approving deals, partly because regulators have a public interest mandate to safeguard jobs in addition to an antitrust mandate to protect competition.

“I am very happy that we have reached this agreement and hope we now have a clear path to the conclusion of this transaction,” said SABMiller Chief Executive Officer Alan Clark.

Coca-Cola Beverages Africa will account for 40 percent of all Coke volumes sold in Africa, serving 12 southern and eastern African countries. It will be headquartered in South Africa, its largest market.

The deal would also hand Coke an extra 20 brands, including sparkling soft drink Appletiser, whose fruit juice concentrate is sourced from South African producers.

Coca-Cola and SABMiller agreed to maintain and grow Appletiser production operations to serve the domestic market and use as a base from which to export elsewhere in the world.

The Gutsche family, Coke’s South African bottling partner, will also be a shareholder in the Coca-Cola Beverages Africa.

($1 = 14.6759 rand)

(Reporting by Tiisetso Motsoeneng; Editing by Mark Potter)

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West Africa pirates switch to kidnapping crew as oil fetches less

3 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters

LONDON (Reuters) – Pirate gangs in West Africa are switching to kidnapping sailors and demanding ransom rather than stealing oil cargoes as low oil prices have made crude harder to sell and less profitable, shipping officials said on Tuesday.

Attacks in the Gulf of Guinea – a significant source of oil, cocoa and metals for world markets – have become less frequent partly due to improved patrolling but also to lower oil prices, according to an annual report from the U.S. foundation Oceans Beyond Piracy (OBP), which is backed by the shipping industry.

“They have had to move towards a faster model and that faster model is kidnappings,” OBP’s Matthew Walje said, noting that ransom payouts were as high as $400,000 in one incident.

“It only takes a few hours as opposed to several days to conduct the crime itself,” he told Reuters at the report’s launch in London. “Fuel prices have fallen, which cuts into their bottom line.”

OBP said violence had also risen, including mock executions, and last year 23 people were killed by pirates there.

“A lot of people are dying from piracy – nowhere near that number died in the last few years in the Western Indian Ocean (due to Somali piracy),” Giles Noakes, of leading ship industry body BIMCO, told the briefing.

“We are particularly concerned by the issue,” said Noakes, whose association audits the OBP’s annual report.

Last month, Nigeria and Equatorial Guinea agreed to establish combined patrols to bolster security.

Analysts say the pirates have emerged from Nigerian militant groups such as the Movement for the Emancipation of the Niger Delta and OBP’s Walje said a growing problem was the splintered nature of the various gangs operating in West Africa.

“It is more fractured than it would be off Somalia where there were a few major gangs and kingpins operating,” he said.

OBP estimated costs related to piracy and armed robbery in 2015 in the Gulf of Guinea were $719.6 million, 61 percent of which was borne by the industry. The 2014 cost was $983 million, 47 percent of which was borne by the maritime sector, it said.

 

(By Jonathan Saul. Editing by Louise Ireland)

 

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South African investment firm RMB Holdings to buy stake in Mall of Africa developer

3 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South African investment firm RMB Holdings Ltd. plans to expand its portfolio by buying a stake in unlisted Atterbury, builder of the Mall of Africa, one of the largest shopping venues in the country.

RMB Holdings Limited, which holds a 34 percent stake in FirstRand, the largest banking group by value in Africa’s most industrialised economy as its only major asset, said on Tuesday it will buy 25.01 percent of Atterbury.

Although it did not put a price on the cost of investment for Attebury, RMB Holdings said in the statement it would fund the deal through preference shares.

RMB Holdings said in a statement it aimed to use Atterbury to spearhead its retail and industrial property business.

The Mall of Africa, which opened its doors last week, targets consumers in Midrand a middle-class suburb north of the commercial hub of Johannesburg.

“We thought it was a missing element of our overall portfolio,” RMB Holdings Chief Executive Herman Bosman told Reuters, referring to property investments.

Shares in RMB Holdings fell 4.60 percent on the bourse by 1358 GMT, as stocks tumbled across the board tracking a sell-off in emerging markets.

 

(Reporting by Tanisha Heiberg; Editing by James Macharia)

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IMF sees sub-Saharan Africa growth near two-decade low in 2016

3 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – Economic growth in sub-Saharan Africa will likely slow this year to its weakest in nearly two decades, hurt by a slump in commodity prices, the Ebola virus outbreak and drought, the IMF said on Tuesday.

In its African Economic Outlook, the Fund said the region would likely grow 3 percent this year – the lowest rate since 1999 – after expanding by 3.4 percent in 2015.

Growth was seen recovering to 4 percent next year, helped by a slight recovery in commodity prices, and the Fund said it was still optimistic about the region’s prospects in the longer term.

“However, to realise this potential, a substantial policy reset is critical in many cases,” the Fund said.

Affected countries needed to contain fiscal deficits as the reduction in revenue from the commodities sector was expected to persist, it added.

Major oil exporters Angola and Nigeria were hardest hit by the slump in commodities prices, as were Ghana, South Africa and Zambia, the report said.

Guinea, Liberia, and Sierra Leone were only gradually recovering from the Ebola epidemic, while several southern and eastern African countries including Ethiopia, Malawi and Zimbabwe were suffering from a severe drought, the IMF added.

On the upside, Côte d’Ivoire, Kenya and Senegal would see growth of more than 5 percent, mostly “supported by ongoing infrastructure investment efforts and strong private consumption,” the report said.

“The decline in oil prices has also helped these countries, though the windfall has tended to be smaller than expected, as exposure to the decline in other commodity prices and currency depreciations have partly offset the gains in many of them,” it added.

 

(Reporting by Olivia Kumwenda-Mtambo; Editing by Andrew Heavens)

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Nigeria to begin exploratory oil drilling in Chad Basin by October

2 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters

ABUJA (Reuters) – Nigeria plans to begin exploratory drilling in search of oil in the northeastern Chad Basin region by October, the head of the state oil company has said.

Emmanuel Ibe Kachikwu, who last year said Africa’s biggest crude exporter may be on the verge of a significant oil find in the Lake Chad area, said in a statement on Sunday that seismic studies were ongoing.

“Drilling activities will commence by the last quarter of 2016,” the Nigerian National Petroleum Corporation (NNPC) chief, who is also minister of state for oil, was quoted as saying in the statement issued by the state oil company.

Africa’s biggest economy has been hit hard by the sharp fall in global oil prices because it relies on crude exports for around 70 percent of government revenue.

NNPC spokesman Garba Deen Muhammad said exploration in the region was intended to “add value to the hydrocarbon potentials of the Nigerian inland basin, provide investment opportunities, boost the economy as well as create millions of new jobs”.

 

 

(Reporting by Camillus Eboh and Alexis Akwagyiram, editing by David Evans)

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Ivory Coast president calls for break-up of power, water monopolies

2 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters

ABIDJAN (Reuters) – Ivory Coast will break up its long-standing electricity and water monopolies and introduce competition to reduce prices amid growing public concern over price increases, President Alassane Ouattara said.

The government decided in June last year to increase electricity prices by 16 percent over three years to keep pace with production costs.

Under the arrangement electricity prices were scheduled to increase by 5 percent in January. But some customers saw rates rise by as much as 40 percent, according to a government investigation, prompting Ouattara to cancel the January increases and call for a more competitive industry.

“This situation reminds us of the need to open up the water and electricity sectors to competition,” Ouattara, a former senior International Monetary Fund official, said in a Labour Day speech on national television on Sunday.

“It is competition that will lower the price of electricity. I appeal to all those who wish to invest in that sector,” he said.

The West African nation has emerged from a decade of political turmoil and civil war as one of the continent’s rising stars economically, with growth averaging around 9 percent for the past four years.

However, critics of the government complain that most Ivorians have not benefited from the new-found prosperity.

During his re-election campaign last year Ouattara promised to make economic growth more inclusive.

The Companie Ivoirienne d’Electricite (CIE), majority owned by Africa-focused public utilities manager Eranove Group, has supplied electricity to the Ivory Coast since 1990 under an agreement with the government. The deal, which puts CIE in charge of the distribution of power to homes and businesses, is not due to expire until 2020.

It is unclear how the utility markets will be liberalised or if it can be done before the agreement between CIE and the government ends in 2020.

But it is likely to be a major issue in French-speaking West Africa’s biggest economy where power producers are struggling to keep pace with growing consumption.

Demand for electricity is rising by some 10 percent a year, and the energy minister said last year that $20 billion of investment is needed in the industry over the next 15 years.

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South Africa’s petrol pump price to increase in May

2 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – The retail price of petrol in South Africa will increase by nearly 1 percent from May 4, while the price of wholesale diesel will largely remain steady, the energy department said on Monday.

The price of petrol will increase by 12 cents to 12.74 rand per litre in the commercial hub of Gauteng province, while diesel will go down by 1 cents to 10.52 rand per litre, the department said in a statement.

 

(Reporting by Olivia Kumwenda-Mtambo; Editing by Alison Williams)

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South Africa’s trade balance swings to 2.92 bil rand surplus in March

29 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s trade balance swung to a 2.92 billion rand ($206.10 million) surplus in March from a revised 1.27 billion rand deficit in February, the national revenue agency said on Friday.

Exports were up by 6.3 percent to 96.13 billion rand on a month-on-month basis, while imports rose by 1.6 percent to 93.22 billion rand on a month-on-month basis, the South African Revenue Service said in a statement.

($1 = 14.1678 rand)

 

(Reporting by Mfuneko Toyana; Editing by James Macharia)

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Tunisia’s central bank holds key rate unchanged at 4.25%

29 April 2016 Comments (0) Business, Latest Updates from Reuters, Middle East, Non classé

TUNIS (Reuters) – Tunisia’s central bank kept its key interest rate unchanged at 4.25 percent, the spokesman of bank said on Friday.

The bank last cut its main interest rate in October, from 4.75 percent, in a bid to boost economic growth as inflation fell. Inflation was 4.9 percent in 2015, down from 5.5 percent in 2014.

 

(Reporting By Tarek Amara; editing by Patrick Markey)

 

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Lafarge Africa to market $302 mil bond to refinance loans

28 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

LAGOS (Reuters) – Lafarge Africa is in the middle of a roadshow to market a 60 billion naira ($302 million) bond programme to refinance loans at United Company of Nigeria (UNICEM), which it acquired last year, its finance chief said on Thursday.

“We are in the process of restructuring the UNICEM debt. We are in the middle of a roadshow,” Lafarge Africa Chief Finance Officer Anders Kristiansson told an analysts call.

“We want to refinance the U.S. dollar borrowings that we have in UNICEM.”

($1 = 198.55 naira)

 

(Reporting by Chijioke Ohuocha; Editing by Alexander Smith)

 

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