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Success Stories Africa Entrepreneurs on their on-site commitment
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Position | International Markets | Practical examples Success Stories Africa
Contents
Contents 1. Foreword............................................................................................................................................................................. 5 2. East African Business Council (EABC) – Partnership with the EABC: East Africa rising ............. 6 3. Association of Ghana Industries (AGI) – Partnership with AGI: Doing business in Ghana........... 8 4. BASF – Investment destination with good opportunities.......................................................................... 10 5. BAUER Group – Long-standing presence and successful cooperation............................................ 12 6. B. Braun Melsungen AG – A market of opportunities................................................................................. 14 7. GAUFF Engineering – A success story in Africa............................................................................................ 16 8. GreenTec – Africa: Continent of opportunities............................................................................................... 20 9. K+S – Uganda: From development project to sustainable business model..................................... 22 10. Ottobock – Partner for better health care...................................................................................................... 24 11. SAP – Shaping Africa's future with digital transformation..................................................................... 26 12. Siemens – Midrand microgrid demonstrates energy savings.............................................................. 28 13. Voith – Long-standing presence and sustainable commitment in Africa........................................ 30 14. Volkswagen – We want to offer sustainable mobility for all.................................................................. 32 15. Imprint............................................................................................................................................................................. 34
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Prof. Dieter Kempf „Growth-oriented German companies are increasingly interested in Africa in search of new markets. At the same time, they are valued employers. They invest in their employees, including training and further education, and they make an important contribution to sustainable development with their technologies and know-how. This creates opportunities for both sides: a classic win-win situation.“ President, Federation of German Industries (BDI)
Position | International Markets | Practical examples Success Stories Africa
Foreword
Foreword Nowadays, it is undisputed: Despite facing numerous challenges, Africa with its 54 countries has become a continent of opportunities. Those returning to an African country after a long time abroad will not recognize many of the places. In the Egyptian capital Cairo, the underground stations of the metro are being expanded. Mozambique has acquired a new landmark with the Maputo-Katembe Bridge, Africa's longest suspension bridge. And in Rwanda a new mobility concept is being offered. The African continent is the fastest growing region in the world, the population is young and dynamic, the middle class is constantly growing, and the need for investment is high. Today, many African countries are promising economic partners and dynamic future markets for German industry. Interest in Africa is growing steadily. To date, around 850 German companies have been active on the African continent, employing around 200,000 people. According to the Bundesbank, German direct investment in Africa in 2017 amounted to around € 9 billion, corresponding to about one percent of the overall German direct investments abroad. And this is just the beginning. Nevertheless, compared to other world regions, German companies are underrepresented with their investments in Africa. For more investment by German companies, we need an improvement in the economic environment in Africa. These include legal certainty, good governance, anti-corruption measures, a reliable infrastructure and its maintenance, well-trained specialists and managers, and regional economic integration. Promoting investments in African has also been the focus of the German government for some years now. For a good reason, the German government is focusing more on the German and African private sectors. Increasing trade and investment will promote the sustainable development of the continent. To achieve this, the German government has launched a package of measures worth one billion euros. This includes, among other things, the Development Investment Fund, which provides loans for small and medium-sized enterprises wishing to invest in Africa. In addition, advisory services have been created for companies, the conditions for export guarantees have been improved and new employment and training partnerships have been initiated. In this publication, German companies report on their experiences and successes in various African countries and thus tie in with the BDI success stories of 2015. All contributions are underlining one thing clearly: Despite all the challenges, it is worth investing. We hope you enjoy reading. Let us inspire you!
Prof. Dieter Kempf
Dr Stefan Mair
President Federation of German Industries
Member of the Executive Board Federation of German Industries 5
Position | International Markets | Practical examples Success Stories Africa
East African Business Council (EABC)
East African Business Council (EABC) Partnership with the EABC: East Africa rising The East African Community (EAC) comprises the six countries of Burundi, Kenya, Rwanda, Tanzania, Uganda and South Sudan. In contrast to most regional economic communities, the EAC has embarked on a rapid integration process, which has not only seen the full implementation of a free trade area, but also led to the signing of the customs union, common market and monetary union protocols which have been implemented to a substantial degree. This implies that pertinent trade issues such as the free movement of goods, services, workers and capital as well as fair competition, regional harmonisation of standards and domestic taxation are effectively addressed. The EAC also intends to integrate further into a single currency and political federation in future. This makes East Africa virtually a joint market with limitless opportunities for investors and exporters alike. With a combined population of more than $ 168.2 million and a combined GDP size of over $ 155.2 billion it is considered as one of Africa’s fastest growing regional blocs. The EAC offers an attractive market, and additional potentials to function as a major export hub to other Eastern and Southern African countries as well as the rest of African countries that are in the process of opening up their markets to East African imports through the recently signed Tripartite Free Trade Agreement and African Continental Free Trade Area (AfCFTA).
Mombasa, Kenya. 6
This presents a great opportunity to German companies wishing to invest in the EAC, develop joint ventures and establish partnerships with their EAC counterparts. East African economies have on average experienced a growth of more than six percent per annum over the last decade and intraregional exports have more than tripled over the course of the first eight years of integration. At the same time, exports inside the region have undergone a structural transformation with increasingly non-agricultural goods featuring in the portfolios. Likewise, exports have also become more diversified, techno logically sophisticated and widely distributed across all the partner states. In principal, growth in the EAC is driven by a progressive manufacturing sector characterized by agro-processing and industrial production and exports. The export sector is dominated by tea, coffee and horticulture. More importantly, the region possesses significant amounts of extractive resources including oil and gas, high value minerals and opportunities for renewable energy. East African economies also feature among the fastest reforming nations in terms of business regulations and both regional and national attempts to further improve the business environment. Measures to simplify and incentivize foreign and local investments are continuously being undertaken.
Position | International Markets | Practical examples Success Stories Africa
East African Business Council (EABC)
Investment opportunities are particularly visible in the agricultural sector (including tea, coffee, rice, wheat, cotton, sisal, sugar, dairy, horticulture and oils) and in the manufacturing sector (including textiles, iron and steel, plastics and chemicals, electronics, pharmaceutics, beverages and food processing as well as packaging industry). In addition, enormous public infrastructure investments into roads, ports, railway, ICT, energy (including renewables), water and sanitation also portend huge business opportunities for the private sectors, particularly along the designated Northern (Kenya, Uganda, South Sudan, Rwanda and Burundi) and Central (Tanzania, Rwanda and Burundi) Corridors. Other important investment opportunities can be found in the mining sector (gold, precious stones, iron ore, coal and recently also oil and natural gas), the construction sector, financial services and in tourism. Also the education and healthcare sectors feature increasing private investments. Key developments in the EAC region during recent years include the positive economic growth of the EAC as trade and investment hub; the growing view on global value chains that impact agricultural production and industrial processes; logistical and infrastructural development and, the African Continental Free Trade Area. The East African economy grew at 5.7 per cent in 2018, up from 5.6 percent in 2017. Intra EAC export grew by 5.6 percent to $ 3.2 billion in 2018 from $ 2.9 billion 2017. The East African Business Council (EABC), established in 1997, is the apex body of the private sector in the EAC region for both local and inter national investors with interest in the regional market. The EABC is at the forefront of facilitating private sector participation in the integration process of the EAC where it enjoys observer status. EABC focusses on improving the region’s trade and investment climate and providing direct support to its members. Interested companies from Germany or investors in East Africa with German roots are welcome to contact the EABC with regard to any requests, ranging from policy issues to networking and B2B linkage opportunities.
Nicholas Nesbitt Chairman East African Business Council (EABC)
East African Business Council (EABC)
Since 2015, the EABC and the BDI have a partnership project. It aims at improving EABC’s policy advocacy for a deepened regional economic integration in the framework of the EAC. The EABC and the BDI have collaborated to ensure the effective representation of private sector interests within the EAC decision making framework. Karibu Afrika Mashariki – Welcome to East Africa.
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Position | International Markets | Practical examples Success Stories Africa
Association of Ghana Industries (AGI)
Association of Ghana Industries (AGI) Partnership with AGI: Doing business in Ghana Ghana is home to many foreign investors and the country continues to enjoy a stable multi-party democracy. Indeed, a stable political climate is assuring and generates investor confidence including Foreign Direct Investments (FDIs). According to UNCTAD’s World Investment Report 2017, Ghana attracted FDIs totaling $ 3.5 billion and this continues to rise. The FDI inflows find their way to various productive sectors of the economy. Areas which hold potential for foreign direct investment include the oil and gas sector, energy sector, infrastructure development, agricultural sector, agribusiness development, manufacturing and industrial sector, and the tourism sectors. The financial services and telecommunications sectors are fast gaining ground, providing dynamic and innovative services to the most diverse customers in the world. Thanks to Association of Ghana Industries’ (AGI) constant dialogue with government and advocacy for an improved business environment which continue to pay off both locally and internationally. Building on its advocacy structures strengthend by the BDI, the AGI today wields much influence on government policy and initiatives for industry. The association has succeeded in influencing policy towards
consistently improving the business environment, especially sound macro-economic fundamentals and trade facilitation measures. Electricity drives industry. However, high cost of electricity remains a major concern to industry in Ghana, making local manufacturing less competitive. Businesses are beginning to explore alternative power generation sources such as renewal energy. This situation presents business opportunities for foreign investors as fossil fuel generated electricity becomes more expensive. In line with this, AGI has set up an energy service centre to promote renewal energy and energy efficiency through the support of the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH. Renewal energy is a conversation that will continue in the coming years as more businesses begin to realize the value of renewable energy. Competition from rapidly emerging foreign markets which manufacture at lower costs than we do pose a challenge to our businesses. This becomes more critical with the emergence of the African Continental Free Trade Area Agreement (AfCFTA) which seeks to boost intra-African trade based on free trade agreements among African regional economic communities.
Women's Business Breakfast by BDI, the Agentur für Wirtschaft & Entwicklung (AWE) and AGI at the 3rd German-African Business Summit (GABS) 2019 in Accra, Ghana. 8
Position | International Markets | Practical examples Success Stories Africa
Association of Ghana Industries (AGI)
Projections are that intra-African trade under the continental free trade will have increased from 15 to 52 percent by 2020, which implies a bigger market yet a stiffer competition. Therefore, competitiveness of our economy has become an urgent need. While bracing for the AfCFTA, AGI is also engaging policy makers to help chart a competitive path for local businesses. Local industries may have production capacity limitations, but foreign partnerships may be useful strategic options to propel us forward. Another approach that the AGI has adopted to stem the tide is to focus on the areas of comparative advantage that Ghana has as a country. Ghana is already a strong brand to attract significant FDIs and also become the leading export hub in our sub-region. These are crucial in strengthening local industry and the AGI is leveraging these to position local industries for global competitiveness. AGI remains grateful for the partnership support received from the BDI over the past six years, which has strengthened its capacity for policy advocacy for the private sector in Ghana.
Dr Yaw Adu Gyamfi President Association of Ghana Industries (AGI)
We look forward to further German investments in all sectors of the economy of Ghana.
Association of Ghana Industries (AGI)
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Position | International Markets | Practical examples Success Stories Africa
BASF
BASF Investment destination with good opportunities How did BASF get involved in African countries? BASF has been active in Africa since the beginning of the twentieth century. For a long time, Africa has presented good opportunities as an investment destination. Countries throughout the continent continue to build infrastructure and develop their economies mostly through a growing middle class.
Michael Gotsche Vice President Market Area Africa BASF
In September 2011, the BASF Board of Directors decided to expand the company’s focus in Africa. The Africa 2020 Strategy saw the further expansion of the company’s local presence and today sees Market Area Africa divided into four country clusters, with headquarters in Midrand, South Africa for Southern Africa; Nairobi, Kenya for East Africa; Lagos, Nigeria for West Africa and Casablanca, Morocco for North-West Africa. With its African headquarters in Nairobi, Kenya, BASF employs over 1,000 people on the continent, being present in ten countries and having nine production sites.
What is your biggest success in Africa? Meeting global challenges in a local context has been a key focus of our presence in Africa. In expanding our footprint on the continent, we are proud of the reach and presence we have established across Africa in getting closer to our customers. Many companies claim to have an African footprint yet operate primarily out of an office in South Africa. BASF in Africa has established four Country Clusters that are immersed in their specific regional economies, building meaningful relationships with customers, service providers and other key stakeholders.
What are the main challenges? BASF
Market fragmentation makes investing difficult as there are many small markets, rather than larger trading blocks. The recent African Continental Free
Dr Michael Gotsche, Vice President and Head of Market Area Africa (second from left), delivering his keynote address to a panel of experts discussing sustainability in the transport industry. 10
Position | International Markets | Practical examples Success Stories Africa
BASF
Trade Agreement (AfCFTA) signed in Niger is a progressive step towards alleviating this challenge.
approximately 830 million by 2050 – a factor that will become even more valuable in an ageing world.
For foreign investments to continue to grow, governments and leaders must continue to enforce the rule of law and good governance and continue the pursuit of economic and political stability.
2. Urbanisation will continue to grow at a rapid rate,
Tariffs and taxes should be aligned to promote easier flow of goods and materials and encourage investment in local development. The removal of trade barriers needs to shift into a mindset of ‘trade facilitation’ by governments and policy makers who must create a supportive framework and include tax regimes that support the import of raw materials.
How important is the availability of skilled labour for deciding which country to invest in? A sustainable business is one that invests in the growth of its people and the societies in which it operates. Skilled labour is important for any economy if it wants to grow, which is why we at BASF work closely with governments and institutions like universities to help them prepare school leavers and graduates for the working environment. BASF supports the development of future talent on the African continent through its Africa Graduate Program, which recruits students from across the continent to work in our offices, learn new skills and help shape them for a career in the chemical industry in Africa. We are also involved in a number of skills development programs, including learnerships for people with disabilities, in support of the "Black Economic Empowerment" (BEE) initiatives in South Africa.
Where do you see potential for future investments? The African continent’s gross domestic product – approximately € 1 billion – is now comparable to that of Brazil or India and is growing at a faster rate than that of the European Union. There is an underlying belief that the medium term presents huge opportunities for high levels of growth and development.
translating to immense economic opportunities in the medium to long term as consumption by households and businesses is growing. The United Nations predict that an additional 187 million people will live in cities over the next 10 years with six of the world’s 41 megacities being in Africa.
3. The fast adoption of technology means that people can leapfrog the limitations and costs of things like infrastructure, and governments will have the opportunity to invest in enablers of development. Furthermore, a landmark free-trade agreement removing most tariffs and other commercial barriers will soon come into effect. The AfCFTA commits governments to greater economic integration, as the signatory states move toward removing trade barriers including tariffs on 90 percent of commodities. The duty-free movement of goods is expected to boost intra-regional trade, while also helping countries to move away from mainly exporting raw materials and to build manufacturing capacity attracting foreign investment. Trading will start in July 2020 to give member states time to adopt the pact framework.
What do you say about the reluctance of German companies in sub-Saharan Africa? What do you recommend to other companies that are not yet active in Africa? Africa is a dynamic market holding incredible opportunities and there is no question regarding the potential that Africa presents to both global and local businesses. This being said, the continent has its challenges, which can take time to understand and adapt to. It is, however, important to look at the demographics of the continent, which indicate growth rates and potential exceeding that of other, more developed areas. This is why Africa escaped the global decline in foreign direct investment (FDI) as flows to the continent rose to US $ 46 billion in 2018, an increase of 11 percent on the previous year, according to UNCTAD’s World Investment Report 2019.
This belief is based on three facts:
1. Africa’s demographics underline a young labor force. In fact, Africa has the largest population of young people in the world, anticipated to reach 11
Position | International Markets | Practical examples Success Stories Africa
BAUER Spezialtiefbau GmbH
BAUER Group Long-standing presence and successful cooperation Africa, with its 54 countries and as a continent of contrasts, offers enormous opportunities, but also challenges. The companies of the BAUER Group are active in several African countries and all three segments – Construction, Machinery and Resources – are represented by branches, plants or projects.
Arnulf Christa Chairman of the Management Board BAUER Spezialtiefbau GmbH
BAUER Spezialtiefbau GmbH
BAUER Spezialtiefbau GmbH has been carrying out projects in Africa since the mid-1970s. This initiative was triggered by the sharp downturn in the construction industry in Germany during this period, which also meant that projects had to be acquired abroad. Africa increasingly became the focus of attention, as a few years earlier Bauer was already active as a subcontractor in West Africa and founded pylon for a bridge across the Benue River. Over the years, countless other projects followed, including the foundation of the Mangochi Bridge in Malawi, the subsoil sealing for the Merowe dam in Sudan, the participation in the Trans-Maghreb motorway in North Africa and the construction of the Bagatelle dam on Mauritius. Bauer also contributed to the expansion of local and intercontinental infrastructure, water and energy supply and the competitiveness of African industry. Bauer's continued success on the African continent led to the founding of the first subsidiary in Africa, BAUER EGYPT S.A.E in 1981. After a rather difficult start-up phase in the 1980s, the construction market developed positively and the company's turnover multiplied within a few years. Above all, however, the past ten years have brought numerous challenges for Bauer Egypt, including the international economic and financial crisis in 2008/09 and the so-called Arab Spring in 2011, when Bauer's diaphragm wall and injection construction site at Tahrir Square in Cairo was virtually at the centre of events. Steady inflation and the devaluation of the Egyptian currency also had a negative impact. Despite all these challenges, the primary goal has always been to maintain the subsidiaries and to keep the employees in the company, which enabled us to retain all permanent employees in Egypt despite all the difficulties. Bauer Egypt is currently involved in several projects, some of which are very prestigious. One of them is the construction of two new tunnels below the extended Suez Canal east of the city of Ismailia. As early as 2015/16, Bauer constructed diaphragm walls for the later tunnel entrances and exits. In addition, the company has been involved in another major infrastructure project for years, which is to relieve traffic in the metropolis of Cairo considerably after completion: The expansion of the metro. With the start of Line 3 in 2008, more and more Bauer cutters were successively used to construct the walls of the underground stations. In addition to its branch in Egypt, Bauer Spezialtiefbau has subsidiaries in Angola and Ghana, which also rely on local employees, the know-how of local colleagues and the expertise of the entire BAUER Group. Bauer's particular success on the African continent is also due to its local personnel policy. The subsidiaries are largely staffed by local employees – in Egypt even 100 percent. The special requirements of each country can thus be covered optimally and directly. In addition, the African employees, for example machine mechanics or engineers, are trained and educated at
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Position | International Markets | Practical examples Success Stories Africa
BAUER Spezialtiefbau GmbH
the Group headquarters in Germany in order to be able to deliver the best possible quality locally. The aim is to retain employees permanently and to make ideal use of any synergies that arise.
a depth of 700 m for various gold mines in Ghana. But water also plays an important role in Africa and solar pumps, pipes, filters and accessories for water extraction are also supplied. What began as a purely business activity led to close contact with the people and to a tangible piece of development aid in many areas and through a strong personal commitment. Bauer Resources now has branches in South Africa, Morocco and Senegal to respond directly to market needs.
In 2007, the Resources segment was established within the BAUER Group to bundle all the Group's activities in the areas of water, environment, energy and raw materials. Due to the products and services offered, the focus here was of course immediately on Africa. On the one hand, Bauer Resources in southern Africa acts as a drilling service provider for the exploration of raw materials and drill holes to a depth of 350 m for the exploration of diamond deposits in Angola, Namibia, Botswana and Lesotho; on the other hand, Bauer Resources in West Africa has specialised as a provider of large-calibre drainage wells. For example, wells have been drilled to
In the future, BAUER Group will, above all, focus on maintaining and expanding its existing subsidiaries and carrying out further projects. Further training of local colleagues, cross-border exchange and cooperation between the segments will also be promoted – because Bauer will continue to build on Africa in the future.
Bauer is involved with several milling machines in the construction of the underground stations for the extension of the metro in Cairo. 13
Position | International Markets | Practical examples Success Stories Africa
B. Braun Melsungen AG
B. Braun Melsungen AG A market of opportunities When I look at the opportunities and challenges on the African continent from our perspective, I am firmly convinced that the entire region has great potential and that local developments will bring many opportunities – for a family business like ours, too.
Anna Maria Braun Chief Executive Officer B. Braun Melsungen AG
B. Braun has been active in Africa for more than 60 years and exports medical products to almost every country on the continent. With our subsidiaries and a total of almost 1,000 employees in Algeria, South Africa, Zimbabwe, Kenya and Zambia, we now have a local presence in large parts of the continent. In addition to our national companies and our own production facilities in South Africa and Kenya, we take account of the continent's complexity by cooperating with local sales partners and dealers in a large part of the markets. The aim of this commitment is to create reliable regional structures, to get involved locally and to involve local partners. One example of how this approach can be successfully implemented is our presence in Ghana. Only in February did we announce the opening of our first B. Braun office in the capital Accra, from where we will also further develop our activities and cooperation with neighbouring countries. A few weeks ago, with the support of DEG (Deutsche Investitions- und Entwicklungsgesellschaft mbH), we were able to equip a private dialysis centre in Accra, where we will be able to offer around 20,000 dialysis treatments per year in the future. This is another important step in our Africa strategy, which also includes the expansion of our dialysis business. We already supply several thousand patients with our products on the African continent, including South Africa, Libya, Angola, Senegal, Zambia, Zimbabwe and the Ivory Coast.
B. Braun Melsungen AG
Sustainable commitment with foresight As a family-owned company, however, it is important to us not only to sell in the markets, but also to impart know-how in the healthcare sector and to make sustainable investments. Economic commitment for B. Braun always also means assuming responsibility, giving perspectives and developing markets and people in the process. In line with our Sharing Expertise philosophy, we also train and educate our own nurses, caregivers and technicians. We also attach great importance to the continuous training and further education of our partners' employees, including service technicians and sales personnel. The training of local specialists is also the focus of a development partnership, which we support as part of a develoPPP.de project with the Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH (GIZ). Together with Draegerwerk, Siemens, Karl Storz, Sysmex West & Central Africa and Aachen University of Applied Sciences, B. Braun is supporting the development of a practice-oriented bachelor's program in biomedical engineering in Kenya and Senegal.
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Position | International Markets | Practical examples Success Stories Africa
B. Braun Melsungen AG
Another example is the AFRIKA KOMMT! initiative, which offers young talented junior managers from sub-Saharan Africa the opportunity to get to know work processes and management methods during a one-year stay in Germany. At B. Braun, twelve graduates have so far completed the program and been given the opportunity to expand their skills at the company location in Melsungen and then take them back to their home country. Seven of the participants are now working for B. Braun in sales, marketing or finance. B. Braun is active in local organisations in Africa.
To date, we already have invested more than € 60 million in local economic development, generating annual sales of around € 100 million. Our goal is to keep grow on the continent continuously. Our focus is on the countries of the SADC region, such as Namibia, Botswana, Zimbabwe and Zambia, but we also want to strengthen our presence in East and West Africa.
Challenges and opportunities Africa is repeatedly described as a continent of opportunity, but of course the continent still holds great challenges. In addition to political instability in some countries, sometimes intransparent tendering practices or a lack of infrastructure, this also includes a shortage of skilled workers in the health sector. However, despite these difficult market conditions, we can remain loyal to our partners and the countries in which we operate. Patience and persistence in defying the often difficult economic conditions and remaining present in the market are certainly key factors that have contributed to B. Braun's success in Africa.
Africa already has 1.2 billion inhabitants and the population is expected to almost double by 2050. This means that the continent is expected to account for 25 percent of the world's population. As German companies, we can profit from this dynamic African continent and at the same time, with our technology and knowledge, provide African partners with important instruments to turn local development challenges into opportunities. It is important to create long-term perspectives and to develop markets and people. However, we need patience. And we must approach this development with the necessary consistency and healthy optimism. Africa is a market of the future and I am convinced that our entrepreneurial commitment will pay off in the long term – both for B. Braun and for the people of Africa.
B. Braun has been active in Africa for over 60 years. With its subsidiaries, two of its own production facilities and almost 1,000 employees in Algeria, South Africa, Zimbabwe, Kenya and Zambia, B. Braun has a local presence in large parts of the continent. 15
Position | International Markets | Practical examples Success Stories Africa
GAUFF Engineering
GAUFF Engineering A success story in Africa For decades, we have been successfully implementing infrastructure projects and continuously strengthening and expanding our competencies in the areas of transport, water, wastewater, energy and project financing. A permanent local presence is an important component of GAUFF Engineering's success not only in Africa.
Stefan Tavares Bollow Managing Director GAUFF Engineering
This corporate philosophy has been lived by the founder of our company, Helmut P. Gauff, until today. He began his extraordinary career in 1958 as an independent and consulting engineer. Already in 1965, a development project led him to Gabon. There he discovered his interest in the African continent and its people. His manifold activities and business contacts throughout Africa are a direct result of this enthusiasm. Among his outstanding early projects in Africa was the construction of the "Transgabonais" in 1972, for which 900 km of railway tracks were laid from west to east through Gabon, as well as the construction of a 1,300 m long dam in Nigeria in 1978 for the water supply of the capital to be, Abuja.
Focus on Africa Founded in 1988, GAUFF Engineering is now permanently represented on four continents. Africa is and has always been the focus of our activities and the heart of our company. In recent decades, we have been able to create many important infrastructures, particularly in the areas of water and energy supply and road construction, which still play an important role in the socio-economic development of the countries concerned.
GAUFF Engineering
The Maputo-Katembe Bridge is the longest hanging bridge in Africa and the new landmark of Mozambique – GAUFF Engineering was responsible for the quality control of this complex construction. 16
Position | International Markets | Practical examples Success Stories Africa
GAUFF Engineering
A very special project is the Maputo-Katembe Bridge in Mozambique, which opened in November 2018. With a self-supporting bridge span of 680 m, it is the longest suspension bridge in Africa.
addition to the route, the shipping canal and the entry lane to the airport, the main design principles were the water depth of the bay, the prevailing poor foundation ground, the possible wind load and the consideration of potential earthquakes.
The bridge is part of the Eastern Master Plan in Africa and connects Mozambique with South Africa via Swaziland. It creates a development corridor that has already significantly increased economic growth and tourism in the region during the first six months after opening. Construction work began in August 2014 after the contract was signed in 2011. An originally planned cablestayed bridge with higher pylons had to be converted into a suspension bridge because it is located within the direct entry lane for Maputo International Airport. The design and construction were carried out by the Chinese company Chinese Road and Bridge Corporation (CRBC) based in Beijing (China) under an EPC contract in accordance with FIDIC. The client was the state-owned company Empresa de Desenvolvimento de Maputo Sul, E.P. (EDMS), which had been founded by the government especially for this project. The bridge, including 184 km of roads and other bridges, was financed by the EXIM Bank of China. As an internationally respected consultant, GAUFF Engineering was responsible for the quality control of this complex structure from the first works to completion. Within the scope of construction supervision and design review, we attached particular importance to the highest quality and its supervision to meet the high demands of the client. The intensive cooperation with a large Chinese company operating worldwide was a win-win situation for all three parties: for the state of Mozambique, the construction company CRBC and GAUFF Engineering as the responsible construction supervisor. The entire bridge, with its integration into the city centre of Maputo and the connecting road to South Africa on the south side of the bay, consists of three bridge structures: the foreland bridge in the north, the main bridge (the actual suspension bridge) and the foreland bridge in the south. The total length of the three bridges is 3,011 m; the superstructure width is approximately 21 m with a four-lane carriageway, two lanes in each direction. Due to the special local conditions, different construction methods were used for each of the three bridges. In
The project has been awarded worldwide. Twice in a row, the bridge won the FULTON Award for its specially developed concrete (2017) and for best construction in the category "Infrastructure projects >100 million rand" (2019). The FULTON Award is the highest award in the construction industry in sub-Saharan Africa and is presented every two years by the Concrete Society of Southern Africa. In 2019, the bridge was also awarded the "Global Award" for worldwide construction of the year by "Engineering News-Record" (ENR) in New York.
GAUFF Engineering is currently working on four other major infrastructure projects in Africa:
..
In Senegal, we represent our client in the construction of a hydroelectric power plant and the high-voltage distribution networks that will supply a total of four countries with energy.
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In Uganda, we are planning and building a new port in Kampala on Lake Victoria, which after completion will be the continent's largest inland port.
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In Gabon, we are supervising the construction of a road from Port Gentil to Omboué, which includes the two longest bridges in Africa (4.6 km and 4.7 km).
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In Luanda, Angola’s capital, we are implementing one of the country's largest urban drinking water facilities for up to three million people.
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The constantly high demand for infrastructure measures in many African countries offers German companies – despite international competition – enormous opportunities and possibilities, precisely because of the increased demands for professionalism and reliability.
Particular attention must be paid to the political development of the respective African states, because only with a stable domestic political situation can the market be opened up to German companies and thus develop successfully. 17
Position | International Markets | Practical examples Success Stories Africa
ďťżGAUFF Engineeringďťż
Share of continents in German foreign trade Source: Federal Statistical Office (Destatis), Foreign Trade, Summary tables for external trade (preliminary results), 26 February 2019, pp. 35.
Exports in 2018
Imports in 2018
Africa
Africa
1,7 %
2.1 %
America
America
12.1 %
8.5 %
Asia, Australia and Oceania
Asia, Australia and Oceania
17.7 %
20.9 %
Europe
Europe
68.5
%
68.5 %
Germany's ten largest customer countries in Africa Source: Federal Statistical Office (Destatis), Foreign Trade, Summary tables for external trade (preliminary results), 26 February 2019, pp. 35. Exports in 2018, in billions of euros
Germany's ten largest customer countries in Africa Ivory Coast
Mozambique
Ghana
Madagascar
Ethiopia
Ghana
Kenya
Algeria
Nigeria
Ivory Coast
Tunisia
Morocco
Morocco
Egypt
Algeria
Tunisia
Egypt
Nigeria
South Africa
South Africa
0.2 0.2
0.3 0.4 0.9 1.5 2.0 2.2 3.2
9.1
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Germany's ten largest supplier countries in Africa
0.2 0.3
0.4 0.6 1.0 1.2 1.3 1.8 2.4
8.0
Position | International Markets | Practical examples Success Stories Africa
GAUFF Engineering
German investments in Africa as of 2017 Source: Deutsche Bundesbank, Inventory Surveys on Direct Investments, Special Statistical Publication 10 April 2019, pp. 17-18.
Number of companies Africa
849
Investment portfolio Africa
Africa
10,811
Afrika
Employees 201,000 Afrika
Amerika
Amerika Südafrica
Asien, Australien und Ozeanien Südafrica
6,652
Asien, Australien und Ozeanien
430
Europa
Europa
Südafrica
71,000
Africa's economic growth by region, 2010-20 Source: African Development Bank, African Economic Outlook 2019, pp. 3. Real economic growth in percent. Note: (E) estimate; (F) forecast
7
6
Cote d'Ivoire
Mosambik
Ghana
Madagaskar
Äthiopien
Ghana
Kenia
Algerien
Nigeria
Cote d'Ivoire
Tunesien
Marokko
Marokko
Ägypten
Algerien
Tunesien
Ägypten
Nigeria
Südafrika
Südafrika
East Africa
5
4
3
2
1
0 2010-14
2015
2016
2017
2018 (E)
2019 (F)
North Africa Africa Sub-Sahara Africa West Africa Central Africa Southern Africa
2020 (F)
19
Position | International Markets | Practical examples Success Stories Africa
GreenTec Capital GmbH
GreenTec Africa: Continent of opportunities Since 2015, GreenTec Capital GmbH (GreenTec) has been investing knowhow, network and financial resources in around 25 start-ups and small and medium-sized enterprises (SMEs) that are active in sub-Saharan Africa with a focus on agriculture, sustainable energy and raw materials as well as digitisation with a proven business model.
How did GreenTec enter the sub-Saharan African market?
Erick Yong CEO and Co-founder GreenTec Capital GmbH
Erick Yong, GreenTec CEO, and Thomas Festerling, GreenTec CFO, met during an energy project for Africa. In Africa today, many young, ambitious entrepreneurs are mastering local challenges with digital solutions. Erick and Thomas recognized early on the far-reaching opportunities of the flourishing start-up scene on the African continent and combined them with their expertise, their ideas of sustainability and their potential. Erick was born in Bonn and has roots in Cameroon. He spent many years in France as a consultant and entrepreneur. He successfully built his own as well as other companies worldwide. Thomas worked as a director of the Deutsche Bank Asset Management subsidiary in Germany and abroad for several years. His areas of expertise include strategic business planning, finance and investor relations.
What distinguishes GreenTec from other companies operating in Africa?
Thomas Festerling CFO and Co-founder GreenTec Capital GmbH
GreenTec Capital GmbH
20
GreenTec's business model is the ideal "blue print" for sustainable economic development in Africa. Together with the respective companies, GreenTec develops an individual and multi-year action plan with clearly defined intermediate targets (Key Performance Indicator â&#x20AC;&#x201C; KPI). The portfolio company and the GreenTec "Company Building Team" are working together to implement these goals. The GreenTec "Result for Equity" approach is an important device of confidence in the investment strategy of the Frankfurt company: The portfolio company only remunerates GreenTec with minority interests after the successful implementation of the (partial) goals within a defined time frame. All necessary support is provided by GreenTec experts during everyday cooperation with the start-ups. Subsequently, further co-investors can invest in the company with a now lower operational risk, while GreenTec benefits from the growth.
What are GreenTec's greatest successes? GreenTec's greatest achievement is the success rate of its investment strategy. In its fourth year, GreenTec has invested in around 25 companies. An additional confirmation is the German Entrepreneurial Prize for Development, presented to GreenTec by Federal Minister Gerd MĂźller in 2017. The GreenTec portfolio companies have also won various awards.
Position | International Markets | Practical examples Success Stories Africa
GreenTec Capital GmbH
At the end of 2018, GreenTec founded the GreenTec Capital Africa Foundation in cooperation with private and public donors. The non-profit organisation supports the "start-up ecosystem" in Africa from an early stage, because consulting and networking with European companies are important parts of its work.
played a decisive role in developing the expansion strategy and found a suitable partner for technological development and financial resources.
In mid-2019 GreenTec structured its own 85 million funds. This fund invests in young companies operating in Africa, being also successful because of the operational support of GreenTec experts. Two GreenTec-supported start-ups are described below as examples. Henri Nyakarundi, founder of ARED, visited his home country Rwanda after his studies in the USA and hardly found any spots to charge his smartphone. He developed a simple Solar Powered Digital Kiosk, which he successfully implemented in a franchise model with mainly women as kiosk operators. Technology and financial resources were lacking for a pan-African expansion. In the course of the cooperation from 2015, a modern solar kiosk with additional services such as WLAN, state citizen services and cloud services was created with the support of a German medium-sized company. More than 80 kiosks are currently in operation in Rwanda and Uganda, and hundreds more are planned. GreenTec
Farmcrowdy developed a digital platform giving Nigerian smallholders access to modern agricultural practices, distribution logistics and investments, such as machinery and seeds. In return, investors receive a share of the profits. In 2017, founder Onyeka Akuma won with GreenTec, an early stage partner for the companyâ&#x20AC;&#x2122;s expansion. The cooperation has paid off: Farmcrowdy is a successful small business and has received several awards, including the Digital Business of the Year â&#x20AC;&#x201C; Global African Business Award. This investment has also been a great success financially, with book profits exceeding a multiple of 10x.
What will future investments and partnerships in Africa look like? There are many opportunities for small and medium-sized German companies to participate in African growth. German expertise, quality and adaptability are a major advantage over international competitors in Africa for the joint development of a value chain. However, these advantages are only valuable if the local companies are involved in the development processes and the processes are adapted to local market requirements.
Farmcrowdy gives Nigerian farmers access to distribution, logistics, machinery and seeds through a digital platform. Farmcrowdy_supporting_female_farmers.JPG
21
Position | International Markets | Practical examples Success Stories Africa
K+S AG
K+S Uganda: From development project to sustainable business model With the experience gained from the "Growth for Uganda" project, K+S has developed a new business model for the East African country. The aim is to offer practical solutions for the greatest challenges facing small farmers and to gradually link them digitally. We contribute our agricultural application know-how and supply the necessary plant nutrients. At the same time, we also rely on cooperation with local partners. This takes time and patience but offers enormous potential for local people and for our company.
Dr Burkhard Lohr CEO K+S AG
â&#x20AC;&#x153;Growth for Uganda", the development cooperation project of K+S and the Sasakawa Africa Association, was primarily about passing on our knowledge to the small farmers there. The focus was on cultivation methods, the correct use of agricultural inputs and the optimum storage of the harvest. The result is impressive: In just five years, more than 130,000 small farmers in the region were trained, thus achieving a positive income effect for more than 450,000 people.
Development cooperation as part of sustainable business engagement "Growth for Uganda" formed a good basis for the further development of our local activities. In the summer of 2018, we invested in the local company Grainpulse Limited near the capital Kampala. Together with Grainpulse, we want to give small farmers better market access and at the same time ensure efficient processes along the value chain for agricultural products. For example, Grainpulse offers plant-specific fertilizer mixtures in smaller quantities which the small farmer can spread in accordance with the recommendations. On the other hand, Grainpulse buys the harvest from small farmers in order to process it further, enrich it under certain circumstances and finally sell it to customers.
K+S AG
Processing and storage of cereals in Mukono, approx. 15 km outside Kampala/Uganda. 22
Position | International Markets | Practical examples Success Stories Africa
K+S AG
Challenges beyond the physical value chain
Cooperation with the start-up Akorion in Uganda
The aim of our activities in Uganda is to create an optimal platform for small farmers. Up to now, the trading platform has been very much geared to the products' path from the producer to the customer. However, there are still several hurdles that prevent small farmers from earning a good income. Financing is always a critical issue, since the average smallholder still has hardly any access to financing instruments and often cannot afford the fertilizers for his field. Fertilizers are therefore purchased predominantly from local suppliers, not in sacks, but in cups. Logistics is also a challenge, as the average smallholder has neither the means nor the time to go to markets during harvest season to sell his products in addition to his field work. At the same time, they often farm in remote areas with difficult access. Even extreme weather conditions can lead to severe crop failures. Regular dry and rainy seasons are becoming increasingly rare.
Together with the start-up Akorion Limited, we intend to digitally connect small farmers in Uganda to the market in the future. To this end, Akorion has already created a digital profile for over 40,000 farmers in Uganda in various projects with large development cooperation organizations. Akorion uses a Village Agent model, in which employees recruit and train agents in the various communities. These Village Agents can then use their smartphones to provide smallholders in their region with access to additional services.
The digital approach as part of the solution
The cooperation with a young financial service provider from South Africa, which among other things offers digital payment, will rounds off this offer for smallholder farmers. We in turn contribute our agricultural application know-how to this network and supply the required fertilizers.
All this speaks for an overarching approach which can provide new solutions to the many challenges. At the same time, the complexity of the various topics creates many loose ends which have to be connected to form a whole. This is where the digital approach comes into play, which can link the various topics in a meaningful way.
These services offer solutions for access to agricultural inputs, a marketplace for harvest products or access to financing, insurance and agricultural knowledge. For example, digital payment via smartphone is also very important, since bank accounts and credit cards are scarce among smallholders and throughout the continent.
With the implementation of our concept, we are progressing step by step, albeit not at the speed that we had planned originally. Africa is different and, in many respects, cannot be compared with Europe or North America. It requires a lot of adaptability, understanding and creative solutions on all sides. Here it is necessary to respond to the cultural and linguistic peculiarities of the local people and to use this way to build up trust among the local participants. However, the great opportunity with all the challenges lies in the fact that the basic idea behind the topic can offer a solid business model for all participants.
23
Position | International Markets | Practical examples Success Stories Africa
Ottobock SE & Co. KGaA
Ottobock Partner for better health care Since when has Ottobock been active on the African continent? Ottoback has been doing business in Africa for many years. Initially, Ottobock exported materials and components for manufacturing prostheses and orthoses as well as equipment for patient care workshops via dealers and sales partners. It is not uncommon for visitors to come across Ottobock machines that are around 40 years old, still working today in state-owned orthopaedic workshops. This has contributed to the fact that in Africa, too, the name Ottobock stands for high-quality and technologically outstanding products and services in medical technology.
Ralf Stuch Chief Sales & Marketing Officer (CSMO) Ottobock SE & Co. KGaA
Over the past decade, Ottobock has decided to invest directly in Africa and has established sites in Egypt, Algeria and Morocco in North Africa. The company established its first subsidiary in sub-Saharan Africa in Johannesburg in 2011, from where it supplies neighbouring countries. Our customers are primarily private workshops, with government tenders accounting for around one-third of sales. Over the past three years, Ottobock has further strengthened its presence in Africa with additional locations in Zambia and Mauritius. In 2019, the company will open a branch in Kenya. In addition to sales, we supply patients with individually adapted prostheses and orthoses in our own workshops.
How did Ottobock start acting entrepreneurial in Africa? Africa's population is growing rapidly. Road accidents and the rise in chronic diseases such as diabetes are rapidly increasing the need for orthopaedic care. Most of the population is undersupplied, and there is a lack of qualified specialists and care structures. Therefore, additionally to selling components, Ottobock became active in partient care directly. This allows us to Ottobock SE & Co. KGaA
Orthopaedic technicians from Angola are trained on prosthetic fitting on the Ottobock Campus in Duderstadt. 24
Position | International Markets | Practical examples Success Stories Africa
Ottobock SE & Co. KGaA
have direct influence on the quality of care and enables us to get to know the requirements of our patients and the market even better.
that we also reach the national health systems in order to make broad access possible.
In addition, political awareness of the socio-economic significance of the provision of assistive technology and mobility devices has risen in recent years: Access to quality of assistive technology and mobility devices often determines access to education, work and social participation. At the political level, it has become clear that the private sector must be involved if the challenges associated with these developments are to be overcome.
What are the challenges? The biggest challenges for us are the underdeveloped and underfunded health systems in many countries. Often, the provision of prostheses and orthoses is not part of universal health coverage and therefore not part of reimbursement systems. If there is a reimbursement system, only a few basic functional solutions are adopted. This is accompanied by a lack of care structures and qualified specialists. We are therefore providing our global expertise on various supply systems, on the strengthening of care structures and the development of skilled workers. Essentially, we are pursuing three approaches: On the one hand, we work closely with political network partners such as international organisations, governmental and non-governmental organisations in the establishment and further development of assistive technology provision. In addition, we promote the qualification of specialists from our clinical network partners and support further development of our services. This year, we certified in Nigeria our first Ottobock clinical network partner in sub-Saharan Africa. Our third approach is to expand our branches with their own utilities.
What are Ottobock's greatest successes in Africa? As a result of the economic growth in many African countries, more and more people can afford better care. But they do not necessarily find this in their own country. Some patients receive care abroad, which results in a loss of national added value. By expanding our care centres, we provide access to high-quality care and demonstrate the difference to existing solutions. It is now important
Ottobock has been able to position itself in Africa as a trustworthy partner who, in addition to its role as a manufacturer and service provider, is committed to improving patient care in the long term. This enables us to hold our own against Asian competition and other providers in the low-cost segment.
Where would you like more support (from the German government, the EU, etc.)? With its extensive expertise in the development of social security and health systems, Germany in particular can contribute to the current approaches of many countries to include the provision of assistive technology and mobility devices in universal health coverage. The private sector plays an important role in the national health care systems of most countries. It is therefore important to provide financial incentives for sustainable investments by the private sector and to provide political support for such projects. Close cooperation with the embassies is also important in this context in order to facilitate the development of skilled workers and the transfer of know-how not only locally, but also in German institutions. This way, entrepreneurial and public interests can be balanced in the face of global competitive pressure. Also, the risk associated with an economically and politically volatile environment can be shared.
What do you think about the restraint of German companies in sub-Saharan Africa? What are your recommendations for companies not yet active in Africa? So far, sub-Saharan Africa is still largely an investment market â&#x20AC;&#x201C; Ottobock's sales in Africa account for only 1.3 percent of total sales. However, economic and demographic developments and the associated increase in demand offer great potential. The task now is to set the course and to understand and shape the market not only economically but also culturally at an early stage. The lack of political framework conditions and structures therefore is both a challenge and an opportunity.
25
Position | International Markets | Practical examples Success Stories Africa
SAP SE
SAP Shaping Africa's future with digital transformation SAP’s vision is to help the world run better and improve people’s lives. That has been our purpose from day one. So, when our customers have the next big idea to save a species, transform an industry, feed the hungry, support equality, or provide relief worldwide – we deliver the right technology to help them run at their best and achieve their vision. Africa plays an important role for us in this context: Not only is the continent an important growth market. The developments of recent years show that it is an imperative for Europe to sustainably advance Africa's economic, social, and ecological development.
Isabella GroegorCechowicz Senior Vice President, General Manager Global Public Services SAP SE
As the world leader in enterprise software, SAP serves more than 430,000 customers in more than 180 countries. Around three-quarters of all business processes worldwide touch an SAP system. Against this background, we also see an obligation to contribute to the positive development of the world. It was already in the early 1980s when SAP started to discover Africa’s opportunities as an emerging market, when we established a sales partnership in South Africa. At the time, South Africa was the continent's largest and most industrialized economy, motivating us to establish our business there first. Ten years later, SAP established its first subsidiary in South Africa, followed by Nigeria and Kenya in 1998. Since entering the market, SAP has grown continuously on the continent. In the meantime, our company is represented there with several hundred employees. Software development requires constant innovation and a strong IT ecosystem. That's why we operate a research and co-innovation centre in the region. We have an extensive network of sales and implementation partners who help us to meet the specific needs of African companies. Without partners, a longterm anchoring in Africa is hardly conceivable. Together, we serve over 4,000 customers in 26 industries. In the past ten years alone, SAP Africa
SAP SE
Africa Code Week: an SAP IT training program that has already taught digital skills to nearly 4 million young people and 50,000 teachers in 37 African countries. 26
Position | International Markets | Practical examples Success Stories Africa
SAP SE
has more than doubled its revenue from enterprise software and technology solutions. This shows that it was right to take Africa seriously and invest there.
provides young Africans with SAP-relevant professional qualifications and enables them to find their way into the labour market. At the same time, the program supports SAP's customers and partners by giving them access to qualified professionals. This way, the initiative has already provided technical training to more than 540 graduates, most of whom have found permanent employment within our network of customers and partners.
Building IT competencies to drive digital transformation Of course, we also face challenges, both back then and now. Political empathy, for example, is very important. In the 1980s, data processing for controlling business processes was something completely new and there were sometimes reservations on the part of customers. A long-standing employee remembers that many concerns had to be cleared up and a lot of development work was necessary. Today, the main challenge is finding suitable IT personnel for the introduction and operation of our software. Africa has the youngest and fastest growing population in the world. At the same time, there is enormous growth potential in the digital industry in many African countries. Africa is a continent with little IT past and companies have the advantage of not being burdened with outdated technical infrastructure. This allows them to invest directly in the latest technologies such as big data analysis, cloud computing or the Internet of Things. This could actually be a perfect starting position for digital transformation on the continent. Nevertheless, it is not always easy for us to fill IT-relevant positions with local, qualified employees. To meet this challenge, SAP has been active in the areas of vocational training, youth employment, and entrepreneurship in Africa for years, with a focus on long-term social commitment. We see digital literacy as a catalyst for digital change. SAP invests heavily in education and training and maintains numerous university alliances to attract people to IT, close skills gaps, and meet staffing needs. With the Africa Code Week, launched in 2015, SAP taught over 2.3 million young Africans in 37 countries basic programming skills and trained 25,000 teachers in 2018 alone. Our "SAP Skills for Africa" program
Economic development partnerships for stable development SAP also cooperates closely with various partners in bilateral and multilateral development cooperation in Africa. In German development policy, SAP and the German Society for International Cooperation (GIZ) are involved in many initiatives. For example, we are partners in the "Sonderinitiative Ausbildung und Beschäftigungâ&#x20AC;&#x153; â&#x20AC;&#x201C; a special initiative for vocational training and employment, the "MakeIT" start-up programme and "Moving Rwanda" - a joint development programme with Volkswagen and other partners to promote e-mobility and e-logistics. These programmes make a valuable contribution to the sustainable and inclusive development of the African continent, from which significant employment and innovation effects can be expected. All these partnerships enable us to train and hire young talent on a large scale and in a sustainable way, and to provide them with many of the skills necessary for digital change on the continent. In our view, digital transformation is the key to unlocking Africa's enormous potential. Digitisation can open up innovative ways to strengthen the economies of African countries, integrate them fairly into global value chains and create long-term prospects for the rapidly growing population. This way, Africa, too, can benefit from the digital dividend.
27
Position | International Markets | Practical examples Success Stories Africa
Siemens
Siemens Midrand microgrid demonstrates energy savings Siemens headquarters in Midrand today uses about 50 percent less energy from the national grid than it did just over a year ago when the company established a primarily solar-powered microgrid at its Midrand campus. The Distributed Energy System at Siemens Midrand campus includes a 1 MW PV-solar power plant with solar panels mounted to the roofs of carports and the buildings. Over this period, by taking steps to reduce its energy usage and by using energy supplied via the microgrid, it has downscaled its consumption from the national grid by 2,435,000 kWh (2.4 GWh). That translates into 174 000 kWh per month, which represents 50 percent of the company’s normal monthly consumption. This 174,000 kWh saved per month is about the same amount of energy used by 50 average South Africa households over a year.
Sabine Dall’Omo CEO Siemens Southern and Eastern Africa
Siemens
28
This case study demonstrates savings on energy usage, energy costs, and the reduction of harmful emissions (2,460 tonnes CO2 equivalent to date) that would otherwise have occurred had the company continued to draw its energy only from the predominantly fossil-fuel powered national grid. Bringing together the experience and initiative of local and global Siemens experts, this is the first Siemens distributed energy system (DES) solution of its kind in Africa. It also marks the first time that Siemens has installed the system in one of its own buildings. The project is aligned with the company’s goal to achieve carbon neutrality by 2030 – through energy efficiency improvements, the use of decentralised energy systems, the purchasing of clean electricity, and allied offsets if necessary. Sabine Dall’Omo, CEO Siemens Southern and Eastern Africa says, “The project provides a showcase on a proven Siemens solution that will help save energy, cut costs, lower carbon emissions and ensure uninterrupted power. Everything from installation to operating costs has been tracked to present a realistic case study for the South African context, and the results to date are convincing. The DES solution installed at our office park serves as an active example of our belief in the solution and the sustained benefits it creates.” The system that has been installed at Siemens’ Midrand campus can be replicated and adapted to provide reliable and more efficient power to businesses, office parks, manufacturing plants, institutions and even small communities that do not have access to the national grid.
Position | International Markets | Practical examples Success Stories Africa
Siemens
Distributed energy systems
exchanging power. For example, an office park that generates a lot of power during the day could pass on that stored power to a nearby residential community to be used at night. Depending on the setup, power generated by the community overnight could in turn be transferred back to the office park for use during the day. Such relationships between business and communities could result in massive savings across the board and make huge leaps towards a cleaner energy environment in South Africa.”
The Siemens office park covers 22,351 m² and accommodates 800 to 1,000 workers daily. The DES solution is built around a 1 MW PV-solar plant with the solar panels mounted to roof the rows of carports as well as on the roofs of the buildings and equipment positioned strategically throughout the campus. Captured solar power is integrated into the microgrid controller. Excess energy is stored in a 140 kWh battery and the entire system is monitored, visualised and controlled via a Siemens engineered IoT (Internet of Things) energy platform. Distributed energy systems are an ideal solution for the African continent because they are designed to be adaptable. They also facilitate the use of diverse power sources – solar or wind during the day, switching to other forms of generation such as biomass, or more conventional diesel generators, when the conditions for renewable energy generation are poor. Dall‘Omo adds, “One of the most exciting aspects of a microgrid system is the potential for storing and
Potential exchanges as outlined would, however, require a distribution network that could handle two-way traffic. The challenges currently facing Africa’s energy sector are leading private businesses, residential communities, education institutions and others, to curtail their dependence on the traditional centralised model of power generation and linear distribution and to identify alternative, efficient power generation solutions. Siemens DES is designed to provide uninterrupted power and ensure a steady and reliable electricity supply to meet growing demand across the continent.
Siemens headquarters in Midrand, South Africa. 29
Position | International Markets | Practical examples Success Stories Africa
Voith Hydro Holding GmbH & Co. KG
Voith Long-standing presence and sustainable commitment in Africa Many German companies and politicians have only discovered Africa as an important economic partner and sales market in recent years. For Voith, involvement on the African continent already has a long tradition. Especially in sub-Saharan Africa, we have been involved for many decades in large as well as smaller hydropower projects, for example in equipping the Cambambe II hydropower plant in Angola, modernizing the Inga I plant in the Democratic Republic of Congo, and constructing the Ingula pumped storage power plant in South Africa. In addition, we supply efficient starting and braking systems for buses and trucks, which are used throughout Africa, especially in numerous major African cities. As well as Voith components in many thermal power plants and in raw material extraction, Voith paper machines are also used in Africa.
Heike Bergmann Senior Vice President Sales Africa Voith Hydro Holding GmbH & Co. KG
Unfortunately, an inadequate power supply in many parts of Africa continues do hamper economic and social development. As a sustainable source of energy, hydropower can make a significant contribution to changing this situation. The countries of sub-Saharan Africa offer considerable potential for sustainable energy generation from hydropower and for the supply of cutting-edge German technology, such as Voithâ&#x20AC;&#x2122;s. We have been successfully managing hydropower projects in Africa for more than 80 years and thus support the promotion of economic growth and social improvements.
Customer proximity of great importance
Voith Hydro Holding GmbH & Co. KG
Voith has been represented in Africa for many decades with products and services from the Group Divisions Voith Hydro, Voith Paper and Voith Turbo at several locations. Our top priority is always to be on site with our customers and partners. Continuity of the projects, often running over several years, is a central issue. For example, our local presence enables us to better coordinate project partners on site. Local presence in Africa therefore is a must in order to ensure successful and efficient project implementation and consistent market development. We are pursuing this approach stringently and opening our East Africa Hub in the Ethiopian capital Addis Ababa, for example, in 2018. From there, we plan and coordinate hydropower projects in East Africa. Another area we are pursuing in Africa is training and further education, thus passing on a piece of knowledge and expertise to our local customers and partners. Under the name HydroSchool, for example, we are offering a training programme for operators of hydropower plants. The aim is to provide local employees with further qualifications and enable them to obtain qualified training in their specialist field in the hydropower industry. We can already proudly look back on numerous successful training courses in sub-Saharan Africa.
30
Position | International Markets | Practical examples Success Stories Africa
Voith Hydro Holding GmbH & Co. KG
Various challenges have to be mastered
Sustainable thinking with cuttingedge German technology
On a continent as large as Africa, with its many countries and forms of government, its many ethnic groups, different climate zones and landscapes, project implementation can be a challenge. In addition, there are often hurdles such as inadequate infrastructure or legal uncertainty. In many cases, we are also confronted with a lack of financing options for our products. We face fierce competition from Asian competitors, who often contribute their own project financing. We expect the German government to continue to provide positive support in this regard by opening up and flexibilising cover options by export credit guarantees, as well as an agile appearance of German embassies and consulates in the respective African countries. Cooperation with other German exporters would also increase our effectiveness. In this case, teamwork of all stakeholders is the recipe for success.
We want to be problem solvers for our customersâ&#x20AC;&#x2122; technical requirements, providing a fair amount of initiative, German cutting-edge technology and, if available, tailor-made financing. We are also there for our customers and partners when the order has long been completed. All our customers give us credit for that. As an entrepreneur who wants to be active in Africa, you should never give up, no matter how adverse the circumstances, and emphatically seek your opportunities â&#x20AC;&#x201C; Africa is offering enormous potential. That's why we have to keep promoting the German attributes of quality, partnership and delivery reliability. At Voith, we have a genuine interest in ensuring that the African continent develops sustainably and successfully on its way into the future. We consider this our active contribution to economic and social development, especially in the less developed regions of Africa.
Expansion of Cambambe hydropower plant in Angola. 31
Position | International Markets | Practical examples Success Stories Africa
Volkswagen Group
Volkswagen We want to offer sustainable mobility for all Volkswagen intends to open up markets in Africa with new concepts. The plant in Uitenhage, South Africa, plays a key role here. Thomas Schäfer, Chairman of the Board of Management of Volkswagen Group South Africa, explains the challenges and possible solutions.
Volkswagen can look back on a long history in South Africa. How did the company enter the sub-Saharan African market?
Thomas Schäfer Chairman & Managing Director Volkswagen Group South Africa Head of Region Sub-Sahara Africa
We have been building Volkswagen in South Africa since 1951 and are very successful in the country – with a market share of well over 20 percent and an extremely well utilised factory. We are part of South Africa’s society. On the other hand, the rest of sub-Saharan Africa did not play a role in our Group until then; total sales of new cars were virtually so small that they were almost invisible in the statistics. That's why in 2016, we considered how we could gain some market share there, too. Of course, there are always such considerations, especially in untapped markets with a large population. But so far, we have never really found access to them. There were two reasons why we worked so hard on this topic: Firstly because, of course, there is great potential and it is untapped; secondly because we want to strengthen South Africa as a production location. With this country being 10,000 kilometres away from the other major target markets and having a relatively small local market, we of course have increasing difficulties in pursuing this sustainably. Hence, Africa as a regional market is our hope for the future.
Volkswagen Group
President of Rwanda Paul Kagame with Thomas Schaefer and Michaella Rugwizangoga. 32
Position | International Markets | Practical examples Success Stories Africa
Volkswagen Group
Which challenges have you faced?
new vehicles. Later these cars are resold as used cars. This is a cycle that is constantly renewed. In Rwanda, we are trying this out with an integrated mobility concept, where we offer a Ride Hailing, similar to Uber or Gett, for example, but all with new Volkswagen vehicles assembled in the country and with our own drivers who are properly trained. We also offer car sharing – aiming at companies first, later it will be possible for private individuals to find your vehicle by app. This is an interesting story, because it brings a disruption to the whole business: No longer just this limited focus on selling new vehicles, but more on getting into the mobility business.
The big challenges in Africa are: Firstly, the import of used vehicles. Millions of used vehicles are imported primarily from Japan, the Middle East and North America. This is a huge business for individuals. But of course, it does not create jobs. South Africa, on the other hand, does not import used cars. Because you have an industry that creates jobs and prosperity with almost one million employees – 7.5 percent of South Africa's gross national product. Further north on the continent, however, the import of used cars is impacting the demand for new cars. The second challenge is the poor quality of the fuel, which is imported. But the qualities are lower than Euro2, which means that we cannot sell modern engines in these markets. And thirdly, the purchasing power of the population does not yet allow most people to buy a new car.
What does Volkswagen need from the African countries to be able to invest? First and foremost: political will. At the moment, we are active in Africa in countries showing a very strong political will to change the status quo: Rwanda, Ghana, Ethiopia, Kenya and slowly Nigeria, too. It's about restricting the import of used vehicles and abolishing it in the long term, tackling the issue of fuel quality, and creating financing models for new cars, together with the state banks or also with external banks.
At the same time, Volkswagen has also invested heavily in the Uitenhage plant in South Africa, which is an important basis for the Group's Africa strategy. It is essentially necessary. At the moment, we live entirely from South Africa's success. We are not burdening our headquarters in Wolfsburg. The plant here is now running at full capacity – this year we will build 162,000 cars here in three shifts, an additional 97,000 engines. So, we are extremely pleased, the plant is running perfectly well, we are currently one of the most efficient plants in the Volkswagen Group. And, of course, our success also allows us to launch such projects and activities all over Africa – from South Africa.
In Rwanda, Volkswagen is even developing a mobility concept. What is this project all about?
Many German companies, on the other hand, tend to hold back in sub-Saharan Africa. What are your recommendations for companies not yet active in Africa?
As I said, one of the most important issues is purchasing power. Africa is home to about one billion people, with only a very small share being able to afford a new car. But several hundred million have a bit of money in their pockets and have to move from A to B. If we enter the market by instead of selling cars, offering mobility and thus lowering the entry threshold, then we suddenly have a huge demand for new vehicles. Mobility vehicles must then be produced and offered with
First of all, it makes perfect sense to look into Africa. I believe that the German business associations can offer a good platform for smaller companies that can't easily get started on their own. Africa will develop, if only out of the compulsion of its enormous population development. From my point of view, this an opportunity not to be missed. I'd rather start small and do something with well-measured small steps than wait until that ship has sailed.
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Position | International Markets | Practical examples Success Stories Africa
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