North and West Africa a region of opportunities
European minds are often biased by our centuries-long relationships with customers and easy movement of goods and capital. Our economies are stable, development is steady, but slow and mergers and acquisitions are more common than quickly emerging opportunities. Not so in many countries and industries of North and West Africa.
The coatings industry in North and West Africa is well developed, with local and international companies present in many countries. Significant quantities of coatings are produced every year. Egypt, with its close ties to the Middle East, can be considered a stand-alone market in Africa. Local markets in Maghreb are well known, sizable and often characterised by many “good old” business ties with French or Spanish companies. Borders, both physical and economic, are very present in North Africa. Moving towards West Africa, the size of the individual markets becomes smaller, with Senegal, Ivory Coast, Nigeria and Cameroon offering sizable opportunities for resins, additives and fillers.
Morocco and Algeria largest paint consumers
Figures on paint consumption are difficult to obtain and subject to change, due to the economic situation. However, it can be estimated that Morocco and Algeria are the largest consumers, at 200 to 250 kt per annum, followed by Ivory Coast and Cameroon at 100 to 120 kt per annum. Senegal comes in at approx. 80 kt per annum andTunisia at approx. 50 kt per annum. Consumption per capita is 5 to 6 kg per annum.
The markets are dominated by water-borne systems for architectural coatings – at least two-thirds of all paints are in this segment. Solvent-borne systems are widely used in industrial coatings. As in other geographies, the market is concentrated, with the top 5 paint producers manufacturing > 75 % of the volume.
Besides market size, other criteria need to be considered. Economic and social risk maps offer insights that can aid with investment decisions. For raw materials suppliers, local companies rather than internationals, offer scope for faster success, due to rapid decision-making and shorter qualification times. However, these opportunities need to be earned.
This is achieved through a combination of market knowledge, relationships, local presence and stamina. Having local coating experts for close customer contact is key. A knowledge of the local language and mindset and an understanding of the decision-making process are the factors that make for successful business-building. This is of particular importance, as three-quarters of the coatings are produced locally. The widely spoken French language enables many countries to be covered efficiently from Morocco, whereas anglophone West Africa is best served from Nigeria or Ghana.
Challenges and opportunities
There are opportunities for modern, sustainable systems. However, the regulatory measures are not the same as in Europe and old technologies are in competition with more ecological solutions. Having a sufficient quantity of raw materials stocked locally is extremely important in the region, due to the long supply chain and the cumbersome import procedures. Warehousing standard resins, additives, extenders and pigments helps to gain and maintain business in the coatings industry. Payment terms in combination with long delivery times remain a financial challenge for any company doing business in West Africa, but the long-term growth will reward those companies that demonstrate stamina.
One key to the success of Bodo Möller is its comprehensive portfolio of raw materials sourced from global suppliers for formulators. As in many other regions, the concept of a one-stop shop is greatly appreciated by customers in North and West Africa.