Shem Oirere, Africa Correspondent11.20.17
Africa’s urbanization rate is expected to reach 70% by 2025 as the region’s middle-class population inches close to 300 million people, promising to exacerbate the current demand for residential buildings and automobile mobility solutions that are some of the largest consumers of ceramic inks.
In addition, the World Bank has, in a recent Africa economic outlook brief, indicated Africa has shown signs of economic recovery from a period of continued fall in commodity prices and weak global economic growth. The region’s economic growth is now projected to reach 2.4% in 2017, with countries such as Nigeria, South Africa, Kenya, Ethiopia, Tanzania and Angola reporting “a rebound from the sharp slowdown in 2016,” according to the bank.
“Economic growth in Sub-Saharan Africa is recovering moderately, following a sharp slowdown over the course of the last two years,” the World Bank reported. “Estimated to have strengthened from 1.3% in 2016 to 2.4% in 2017, gross domestic product (GDP) growth in the region is mainly led by the continent’s largest economies: Nigeria, South Africa, and Angola. Nigeria and South Africa have exited recession; however, their pace of recovery remains sluggish.
“Looking ahead, Sub-Saharan Africa is projected to see a steady pickup in activity, with growth rising to 3.2% in 2018 and 3.5% in 2019 as commodity prices stabilize and domestic demand gradually gains ground, helped by slowing inflation and monetary policy easing,” the World Bank added.
“That said, growth prospects will remain weak in the Central African Economic and Monetary Community (CEMAC) countries – Gabon, Cameroon, the Central African Republic (CAR), Chad, the Republic of the Congo, and Equatorial Guinea – as they struggle to adjust to low oil prices amid depressed revenues and rising debt levels,” the World Bank’s website continued.
“The economic expansion in West African Economic and Monetary Union (WAEMU) countries – Benin, Burkina Faso, Cote d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal, and Togo – is expected to proceed at a strong pace on the back of robust public investment, although growth is projected to soften in Côte d’Ivoire due to low cocoa prices,” the World Bank added. “Among East Africa Community (EAC) countries, Ethiopia is likely to remain the fastest growing economy, supported by continuing infrastructure investment. Growth is projected to recover in Kenya, as inflation eases, but to slow in Tanzania with moderation in investment growth.”
The rebounding economic growth, reported in many African countries, is fueling the current construction and infrastructure development boom and the increasing demand for used and new vehicles. The expanding construction and building sector is expected to create high demand for the manufacture and supply of tiles for floors, walls, ceiling and roofing.
On the other hand, Africa’s increasing supply of motor vehicles, for both commercial and private use, is keeping in tandem with the growing size of the region’s middle class. This growth is expected to trigger continued demand for automotive glasses.
The World Bank has identified Côte d’Ivoire, Ethiopia, Kenya, Mali, Rwanda, Senegal, and Tanzania as some of the Africa economies that “continue to exhibit economic resilience, supported by domestic demand, posting annual growth rates above 5.4% in 2015-2017.”
These countries house nearly 27% of the region’s population and account for 13% of the region’s total gross domestic product, the bank says.
“The global economic outlook is improving and should support the recovery in the region,” the bank added.
Demand for Ceramic Tiles Is on the Rise in Africa
Demand for ceramic tiles for floors, walls, ceiling and roofing is expected to increase with the growing urbanization in Africa driven by the Africa’s fast-growing young population that is keener on diverse real estate solutions such as student housing, low-cost housing, office buildings and satellite cities.
“Africa’s cities are growing in population – adding the size of another Nigeria to cities by 2025,” said the World Bank in a report “Opening Doors to the World” released in February. It said today’s urban population in the region stands at 472 million people, and an additional 187 million people are expected by 2025.
“In fact, Africa’s urban population will double over the next 25 years, reaching 1 billion people by 2040,” the bank said.
Market consulting firm Frost & Sullivan says Africa’s “urbanization rate, the highest in the world, can lead to economic growth, transformation, and poverty reduction.”
There seems to be a correlation between Africa’s expanding urban population and the consumption of ceramic tiles according to other reports, such as a previous annual review of the ceramic manufacturing trends by Italian Ceramic Machinery Association (ACIMAC).
It says in its 2015 reports that Africa is one of the regions with the highest rates of urban population growth and where consumption of ceramic tiles is expected to remain high.
In 2014, ACIMAC says Africa produced an estimated 396 million square meters of ceramic tiles, which was equivalent to 3.2% of the total global production. This was an increase from 2013’s production figure of 368 million square meters despite a fall in the region’s overall export volumes of about 16.7% from 68 million square meters to 66 million square meters, according to ACIMAC.
The region also had the highest consumption growth at 6.4% in 2014, rising from 701 million square meters to 746 million square meters.
The association identifies Egypt, Nigeria, Morocco, Algeria, South Africa, Angola, Tanzania and Kenya as Africa’s biggest consumers of ceramic tiles.
Africa’s Automotive Market and Ceramic Inks
Elsewhere in the continent, production of vehicles is expected to surge substantially as more international manufacturers and suppliers position themselves for a share of the region’s automotive industry. This could result in increasing demand for automotive glass products, especially ceramic inks.
An increase in local manufacturing is anticipated in Nigeria, Kenya and South Africa, where new production units have been unveiled recently.
In addition, Kenya and Nigeria have announced tough measures to restrict importation of used cars by imposing punitive taxes as part of their local content policy and also to encourage national industrialization programs.
Nissan, Ford and Volkswagen have assembly plants in Nigeria as the country tightens the ban on second-hand vehicle imports through its National Automotive Industry Development Plan.
In South Africa, BMW, Toyota, Volkswagen and Ford have increased investments in their South Africa operational and manufacturing segments.
Sub-Saharan Consulting Group, a global management and advisory firm, predicts sales of 2 million new cars in 2017 in Africa, “with major auto players such as Toyota, Tata Motors and General Motors GM looking at the continent for growth opportunities.
“There are approximately 21.6 million passenger vehicles operating in Africa today, making the continent’s nearly 1.2 billion population a very attractive prospect for global automobile manufacturers to penetrate,” it says.
A number of companies involved in the ceramic industry, such as Ferro South Africa, Torrecid Group and Kao Chimigraf, are seeking to grow their market share in Africa through introduction of new product solutions and also by taking advantage of investment friendly policies as more and more Africa countries encourage public private partnerships.
However, a few challenges stand in the way of maximizing existing potential to expand Africa’s ceramics ink market. The continent’s poor transport infrastructure, with only 10% of the region’s road network being tarmacked, inadequate financing for investing in ceramic ink production and supply ventures by local firms and Africa’s unreliable electricity generation and supply are some of the hurdles to quick growth of the ceramic inks market.
Nevertheless, the Middle East and Africa region is said to be the fastest growing market for ceramic inks after Asia Pacific, according to Transparency Market Research’s forecast for 2016-2024. The two regions are ahead of North America, Europe and Latin America, according to the forecast.
In addition, the World Bank has, in a recent Africa economic outlook brief, indicated Africa has shown signs of economic recovery from a period of continued fall in commodity prices and weak global economic growth. The region’s economic growth is now projected to reach 2.4% in 2017, with countries such as Nigeria, South Africa, Kenya, Ethiopia, Tanzania and Angola reporting “a rebound from the sharp slowdown in 2016,” according to the bank.
“Economic growth in Sub-Saharan Africa is recovering moderately, following a sharp slowdown over the course of the last two years,” the World Bank reported. “Estimated to have strengthened from 1.3% in 2016 to 2.4% in 2017, gross domestic product (GDP) growth in the region is mainly led by the continent’s largest economies: Nigeria, South Africa, and Angola. Nigeria and South Africa have exited recession; however, their pace of recovery remains sluggish.
“Looking ahead, Sub-Saharan Africa is projected to see a steady pickup in activity, with growth rising to 3.2% in 2018 and 3.5% in 2019 as commodity prices stabilize and domestic demand gradually gains ground, helped by slowing inflation and monetary policy easing,” the World Bank added.
“That said, growth prospects will remain weak in the Central African Economic and Monetary Community (CEMAC) countries – Gabon, Cameroon, the Central African Republic (CAR), Chad, the Republic of the Congo, and Equatorial Guinea – as they struggle to adjust to low oil prices amid depressed revenues and rising debt levels,” the World Bank’s website continued.
“The economic expansion in West African Economic and Monetary Union (WAEMU) countries – Benin, Burkina Faso, Cote d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal, and Togo – is expected to proceed at a strong pace on the back of robust public investment, although growth is projected to soften in Côte d’Ivoire due to low cocoa prices,” the World Bank added. “Among East Africa Community (EAC) countries, Ethiopia is likely to remain the fastest growing economy, supported by continuing infrastructure investment. Growth is projected to recover in Kenya, as inflation eases, but to slow in Tanzania with moderation in investment growth.”
The rebounding economic growth, reported in many African countries, is fueling the current construction and infrastructure development boom and the increasing demand for used and new vehicles. The expanding construction and building sector is expected to create high demand for the manufacture and supply of tiles for floors, walls, ceiling and roofing.
On the other hand, Africa’s increasing supply of motor vehicles, for both commercial and private use, is keeping in tandem with the growing size of the region’s middle class. This growth is expected to trigger continued demand for automotive glasses.
The World Bank has identified Côte d’Ivoire, Ethiopia, Kenya, Mali, Rwanda, Senegal, and Tanzania as some of the Africa economies that “continue to exhibit economic resilience, supported by domestic demand, posting annual growth rates above 5.4% in 2015-2017.”
These countries house nearly 27% of the region’s population and account for 13% of the region’s total gross domestic product, the bank says.
“The global economic outlook is improving and should support the recovery in the region,” the bank added.
Demand for Ceramic Tiles Is on the Rise in Africa
Demand for ceramic tiles for floors, walls, ceiling and roofing is expected to increase with the growing urbanization in Africa driven by the Africa’s fast-growing young population that is keener on diverse real estate solutions such as student housing, low-cost housing, office buildings and satellite cities.
“Africa’s cities are growing in population – adding the size of another Nigeria to cities by 2025,” said the World Bank in a report “Opening Doors to the World” released in February. It said today’s urban population in the region stands at 472 million people, and an additional 187 million people are expected by 2025.
“In fact, Africa’s urban population will double over the next 25 years, reaching 1 billion people by 2040,” the bank said.
Market consulting firm Frost & Sullivan says Africa’s “urbanization rate, the highest in the world, can lead to economic growth, transformation, and poverty reduction.”
There seems to be a correlation between Africa’s expanding urban population and the consumption of ceramic tiles according to other reports, such as a previous annual review of the ceramic manufacturing trends by Italian Ceramic Machinery Association (ACIMAC).
It says in its 2015 reports that Africa is one of the regions with the highest rates of urban population growth and where consumption of ceramic tiles is expected to remain high.
In 2014, ACIMAC says Africa produced an estimated 396 million square meters of ceramic tiles, which was equivalent to 3.2% of the total global production. This was an increase from 2013’s production figure of 368 million square meters despite a fall in the region’s overall export volumes of about 16.7% from 68 million square meters to 66 million square meters, according to ACIMAC.
The region also had the highest consumption growth at 6.4% in 2014, rising from 701 million square meters to 746 million square meters.
The association identifies Egypt, Nigeria, Morocco, Algeria, South Africa, Angola, Tanzania and Kenya as Africa’s biggest consumers of ceramic tiles.
Africa’s Automotive Market and Ceramic Inks
Elsewhere in the continent, production of vehicles is expected to surge substantially as more international manufacturers and suppliers position themselves for a share of the region’s automotive industry. This could result in increasing demand for automotive glass products, especially ceramic inks.
An increase in local manufacturing is anticipated in Nigeria, Kenya and South Africa, where new production units have been unveiled recently.
In addition, Kenya and Nigeria have announced tough measures to restrict importation of used cars by imposing punitive taxes as part of their local content policy and also to encourage national industrialization programs.
Nissan, Ford and Volkswagen have assembly plants in Nigeria as the country tightens the ban on second-hand vehicle imports through its National Automotive Industry Development Plan.
In South Africa, BMW, Toyota, Volkswagen and Ford have increased investments in their South Africa operational and manufacturing segments.
Sub-Saharan Consulting Group, a global management and advisory firm, predicts sales of 2 million new cars in 2017 in Africa, “with major auto players such as Toyota, Tata Motors and General Motors GM looking at the continent for growth opportunities.
“There are approximately 21.6 million passenger vehicles operating in Africa today, making the continent’s nearly 1.2 billion population a very attractive prospect for global automobile manufacturers to penetrate,” it says.
A number of companies involved in the ceramic industry, such as Ferro South Africa, Torrecid Group and Kao Chimigraf, are seeking to grow their market share in Africa through introduction of new product solutions and also by taking advantage of investment friendly policies as more and more Africa countries encourage public private partnerships.
However, a few challenges stand in the way of maximizing existing potential to expand Africa’s ceramics ink market. The continent’s poor transport infrastructure, with only 10% of the region’s road network being tarmacked, inadequate financing for investing in ceramic ink production and supply ventures by local firms and Africa’s unreliable electricity generation and supply are some of the hurdles to quick growth of the ceramic inks market.
Nevertheless, the Middle East and Africa region is said to be the fastest growing market for ceramic inks after Asia Pacific, according to Transparency Market Research’s forecast for 2016-2024. The two regions are ahead of North America, Europe and Latin America, according to the forecast.