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Macro business being negative again, or saying it as it is?
Still om track with the H2 plan, just not in Australia.
Fortescue says green hydrogen target still on track, but Australia projects stalled by power prices | RenewEconomy
reneweconomy-com-au.cdn.ampproject.org
That guy is crazyMacro business being negative again, or saying it as it is?
Nestlé SA in August shuttered production of Nesquik chocolate milk powder in South Africa, citing falling demand. A year ago, Unilever Plc pulled the plug on the manufacturing of home-care and skin-cleansing products in Nigeria to “sustain profitability.” And pharma giants Bayer AG and GSK Plc have outsourced distribution of their products to independent companies in Kenya and Nigeria.
Drawn by rapid growth, youthful populations and increasing wealth, legions of top multinationals rushed into Africa in recent decades. But lately, the difficulties of doing business there—cratering currencies, overweening bureaucracies, unreliable power and congested ports—have dimmed the allure. “It doesn’t justify the effort,” says Kuseni Dlamini, a former chairman of Walmart Inc.’s African unit who now heads the American Chamber of Commerce in South Africa.
“This should be a wake-up call to African authorities. If you do not have a conducive environment to grow and scale businesses, you will be left by the wayside.”The pullback is most noticeable in the trio of countries multinationals typically choose for their initial efforts in the region: Kenya and South Africa, with relatively large middle classes, and Nigeria, with its population of more than 200 million. Together, the three account for 44% of sub-Saharan Africa’s economy and about 30% of its population.
Multinationals’ reluctance to expand or even maintain current operations frustrates African leaders desperate to ease unemployment and reduce their reliance on commodities as an economic engine. In Kenya, President William Ruto has said manufacturing could raise his country to middle-income status by 2030, but poor infrastructure and increasing regulation have eroded competitiveness and hindered economic growth. Nestlé, which had considered increasing production in Kenya, says it’s instead curtailing operations at its sole facility there. While it will continue making a few products such as Maggi noodles, it’s downgraded parts of the facility to packaging imported foods like Cerelac baby cereal.
In January, Neumann Gruppe GmbH, the world’s largest coffee trader, said it would close its Kenyan mill and a unit that offered finance and marketing assistance to small farmers, retaining only an operation that sources coffee beans for export. The company says jobs will be lost, without giving a number, and blames a 2022 government decree barring companies from both marketing coffee and grinding the beans, forcing them to choose one or the other.
Companies in Kenya are also contending with higher taxes, notably a levy on imports of key raw materials such as cement, metals and paper. The Kenya Association of Manufacturers says that last September, 53% of members were operating at a quarter of capacity or less, and 42% anticipated job cuts within six months. “All the numbers are negative,” says Anthony Mwangi, chief executive officer of the Kenya Association of Manufacturers, which represents both domestic and foreign companies. “Those spaces that were used for production, now they are empty spaces. There are warehouses that are importing the same stuff.”
Since 2016, major South African retailers such as Mr Price, Shoprite and Truworths have closed in Nigeria, a country they’ve long considered a priority for international growth. Unilever last year stopped making Omo washing powder, Sunlight dishwashing liquid and Lux soap in Nigeria, now instead importing the products. And in March, Nestlé’s local unit announced its first nine-month loss in a dozen years after the local currency plunged.
In South Africa, which has the continent’s most developed economy, the once-admired infrastructure is in tatters. There are near-daily power cuts, and water outages are increasing, with 40% of water lost to leaks in some cities’ networks. And multinationals say a byzantine work permit system makes it hard to bring in foreign executives. The South African-German Chamber of Commerce last year said delays threatened operations owned by German companies responsible for 100,000 jobs in the country. “The visa matter spans the entire hierarchy of German business in South Africa,” the group said in a statement. “This is of course not only a concern to German business but also to the country itself.”
The regular interruptions to production and the pullback from manufacturing present a problem for local retailers. Shoprite Holdings Ltd., Africa’s biggest supermarket chain, says it’s had to increase its stockpiles of products to ensure it won’t have empty shelves, and it’s building additional distribution centers to hold more goods. “This gives you an idea of how constrained the supply chain is,” says Shoprite CEO Pieter Engelbrecht. “There’s very little investment in production capacity in South Africa amongst the manufacturers, and the multinationals have completely stopped.”
Plunging currencies, meanwhile, have made it harder for multinationals to repatriate any profits. In Nigeria the naira has lost 88% against the dollar over the past decade, while the Kenyan shilling is 34% weaker and the South African rand has depreciated 44%. That means lower spending power for residents, particularly when it comes to imported goods or those with foreign components. To fill the void, local manufacturers are increasingly stepping in with cheaper replacements that mimic the global brands.
Absolutely, our only problem is, our easily extractable iron ore is getting extracted at a faster and faster pace and we think it is an endless resource.They keep on bringing Africa up as a big threat but it's far from it. It's a tough place to do business for multinationals.
For Multinationals, Africa’s Allure Is Fading
After decades of optimism about the region, global giants such as Bayer, Nestlé and Unilever are cutting back.
By Janice Kew, David Herbling, Eric Ombok, and Antony Sguazzin
April 17, 2024
Africa is not a place to do business unless you have an army backing and use your own workers: China has and is protecting its assets there, the west is decolonising thru reverse colonisation.Absolutely, our only problem is, our easily extractable iron ore is getting extracted at a faster and faster pace and we think it is an endless resource.
I got caught with a mining company I Africa a few years ago.Africa is not a place to do business unless you have an army backing and use your own workers: China has and is protecting its assets there, the west is decolonising thru reverse colonisation.
Half decent divvy ??? You are a hard man to please, even if you paid $30 for your shares the last divvy was over 10% on an annualised basis, inc franking.FMG my No 1 pick for the Yearly Comp. This month steady as it goes. A few cents off last month, but who cares the divi was half decent, and Twiggy and Nicola raked in a king's ransome as usual.
Hi BasNew Presentation from Twiggy on the FMG website.
Goes into much detail on how FMG intends to work with China to produce Green Steel. It is the call to arms for Heavy Industry to decarbonise.
2 May 2024 J.P. Morgan Forum Presentation
Slides
Compare it to the presentation made by Twiggy just 4 years previously at the same Forum
26 February 2020 JP Morgan Conference
Slides
I found the short video from the presentation, but not the whole recording.Hi Bas
do you know if I recording of the presentation is available anywhere.
I found the short video from the presentation, but not the whole recording.
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