Who’s Investing In Africa Now? 3M, France Telecom, Visa, and More

It’s not necessary to wire money to a far-flung African locale to invest in the rise of the African consumer. Here are nine companies that are making big bets on the continent and conveniently trade on the New York Stock Exchange.

3M (MMM:US)

Technology conglomerate 3M announced a big expansion to its African business in June and set up subsidiaries in Nigeria and Kenya. The new operations will set about distributing the company’s existing products in the region. Eventually, they hope to develop new products, specifically designed for the African context. Management believes Sub-Saharan Africa could develop into a $500 million market for the company over the long-term.

BT Group (BT:US)

UK-based telecom, BT Group, plans to nearly double its African operations by 2015. The company already serves 600 African commercial customers and is hiring 100 additional staff at its regional head office in Johannesburg. Other investment includes the construction of data centers and the purchase of internet bandwidth on a Cape Town to Johannesburg.

Photo by Khaz

France Telecom (FTE:US)

The telecommunications giant has made a huge push into Africa with its “Orange” mobile and broadband brand. During the first half of 2012, revenue from Africa and the Middle East grew 5.8%, propelled by a stabilized Ivory Coast (+34%) and an impressive performance from Niger (+20%).

FTE also devoted considerable resources to building its mobile customer base in Niger (+28%), Cameroon (+25%), and Senegal (+18.5%). Mobile broadband usage increased 83% in the region.

Koninklijke Philips Electronics (PHG:US)

Dutch electronics maker, Philips, said its second quarter Africa sales increased nearly 30%. Much of the growth stems from the company’s distribution of high-efficiency lighting in South Africa. It’s in the midst of a program that will see 200,000 50W halogen bulbs at South African banks, shopping malls, and other commercial establishments replaced with Philips’ 7-10W LED lamps.

Moneygram (MGI:US)

Remittances from the US to Africa have surged of late as the pain of recession begins to ease. There’s also been a big upswing in transfers within Africa and between Africa and China.

To take advantage of this opportunity, fund transfer company, Moneygram, is building out its branch network as quickly as it can. In July, it announced that it could now process transfers to South Sudan. It also added nearly 500 additional locations in Ghana and over 500 locations in Nigeria.

Starwood Hotels (HOT:US)

Hotel operators are beginning to reap the benefits of their African investments. Starwood Hotels’ Middle East and Africa revenue per available room (REVPAR) bounced back after last year’s tough Arab Spring, increasing 11% in constant dollars. The chain’s Nigerian properties performed particularly well, with revenue up 43%. Starwood operates 84 hotels across Africa and the Middle East.

Visa (V:US)

The global payments company that’s everywhere you want to be is finally realizing that some people want to be in Africa. It opened its Sub-Saharan regional headquarters in Nairobi in June.

Visa sees significant potential in East Africa’s mobile payments market and in processing inter-bank ATM transfers. A wider Visa network would also be a boon to the international tourism industry. It aims to generate $14 million worth of revenue from Kenya alone by 2015.

Western Union (WU:US)

The money transfer service reported “strong” results in Africa in spite of foreign currency headwinds. Its Middle East and Africa segment grew revenue by 3% during the second quarter. It now accounts for 15% of total sales and total transactions in the region grew 9% — more quickly than anywhere else in the world.

Yum! Brands (YUM:US)

We’ve highlighted Yum! in Africa before, but on its second quarter conference call, the purveyor of pizza (Pizza Hut), tacos (Taco Bell), and fried chicken (KFC) reiterated its plans to be in 20 different African countries by the end of the year. It sees “tremendous growth potential” on the continent, especially in Nigeria with its rapid population growth.

The company’s expansion will be driven primarily by the KFC chain, which has proven extremely popular in South Africa. It bought 70 restaurants in South Africa last year, building its base in the country which it will use as a springboard into the rest of the continent.

Comments

  1. I recently spent two weeks in Kenya where I visited the KFC downtown Nairobi. Unlike the fast food feel of KFCs in America, this KFC was much nicer, had some leather seating upstairs, the staff was extremely friendly (relative to the ones I’m used to in America) and they even deliver.

    When we think KFC, we just think fried chicken but what YUM is doing with the brand in Africa is making it a high-end (yet affordable) eatery that just might work. Of course, I also went to KenChic and preferred their chicken over KFC.

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