Ethiopian Airlines, One Of Africa's Next Generation Of Multinationals
Forget 'old' money like MTN and Dangote, there’s a new ‘middle-class’ emerging, with retail and banks the stars in new wave of expansion.
NIGERIA’s largest miller by market value, Flour Mills of Nigeria Plc, is eying the African market, and is targeting joint ventures and acquisitions in other African countries.
“That will be the next phase of growth,” CEO Paul Gbededo said in an interview with Bloomberg news agency late June, adding that the opportunities that exist in food in Nigeria are present in many African countries. “Food that we can grow here—where we have comparative advantage, we have to be investing in that and grow our capacity in feeding ourselves,” he said.
The focus has in recent times tended to be on the international multinationals looking to take advantage of the continent’s fast rising economy to set up in Africa.
Giants like General Electric have been very active in the region, snapping up billion-dollar deals as they mature, while long timers such as Maersk continue to eye infrastructure deals such as in ports. New ones like PSA Peugeot Citroen are also set to enter the continent.
Kenya's Westgate Mall
Even those who left are back: Volkswagen has again started assembling vehicles in Nigeria after a 25-year hiatus, while multilateral financiers will not also be left out: the European Investment Bank is set to open offices in four more African cities, citing the continent’s fast growth.
But less highlighted has been the expansion of African companies such as Flour Mills across country borders, a trend that could give pointers to the next generation of African multinationals.
Until now that space has been occupied by firms that long crossed borders such as Naspers, MTN and SAB Miller, the Dangote Group and a raft of banks such as UBA and Standard, with investments in services dominating.
These types of “veterans” already account for billions in African FDI, at $10.2 billion last year, according to UNCTAD data.
But newer African investors are increasingly looking to invest more in other countries in the region. We cite some of them that have announced their expansion plans this year:
1: Bidco Africa, Kenya
Owned by Kenya’s wealthiest man, the edible oils manufacturer is considering building plants in Mozambique, Madagascar or Ethiopia by the end of the decade to add to existing operations in Kenya, Tanzania and Uganda.
The company trades in 16 African countries and posted sales of $500 million last year, half of that in Kenya, with plans to grow four-fold within the next five years, as it looks to tap increased consumer spending on the continent.
The firm is already the the biggest producer of edible oils in eastern and central Africa, and is a marketer of goods including animal feeds, hygiene products and detergents, according to its website.
2: Ethiopian Airlines, Ethiopia
East Africa’s largest carrier by revenue was in March reported to be considering proposals to help set up national airlines in Nigeria and three other countries—Uganda, South Sudan and DR Congo—to expand its operations on the continent.
Staff Of Ethiopian Airlines
The state-owned company already has stakes in Malawian Airlines and ASKY Airlines of Togo, and has been competing with South African Airways and Kenya Airways Ltd. as they expand routes outside their home markets to tap greater demand for travel within the continent.
Ethiopian plans to quadruple annual revenue to $10 billion over the next decade and increase its international destinations to 120 from 84.