Global trends unearthed and analysed indicate that the chemicals sector is increasingly being driven by Environmental, Social, and Governance (ESG) issues. It also indicates that decarbonisation is often a key rationale behind the investments (and divestments) in the sector, apart from Africa the place investments understandably lagged once more this year.
These are the findings of the most recent Chemicals Executive M&A Report for 2022 released by world administration consulting agency Kearney, now in its ninth edition.
“The reasoning for it is because there are merely not that many engaging target firms with appropriate ESG credentials available to accumulate for chemicals organizations seeking to invest and consolidate on the continent,” explains Prashaen Reddy, Partner at the agency.
As the least industrialized continent, where up to 600million folks nonetheless live without electrical energy, Africa’s chemical business is emergent, and its markets are immature in comparison to its Asian, European, and Middle Eastern counterparts.
Nevertheless, the chemical substances sector is a key part of Africa’s economy. A giant complex industry, with diverse sub-sectors, Africa’s chemical industry is intrinsically interlinked with other sectors – fuels, prescribed drugs, plastics, and manufacturing, to name a few.
เครื่องมือที่ใช้วัดความดันเลือด is answerable for key outputs and crucial commodities alongside several industries’ whole worth chains.
In South Africa, the continent’s most developed chemical market, the sector accounts for around 25% of producing gross sales. (Chemical and Allied Industries’ Association:
ESG and decarbonisation more and more being the dominant rationales behind M&A deals within the international chemical compounds sector have resulted in a strong investor appetite for M&A targets with good ESG credentials, permitting Africa’s chemical firms that embrace ESG to place themselves to draw funding.
“Although realistically Africa will still have to harness its plentiful hydrocarbon-based energy reserves to remain economically competitive, there are proven methods to make even fossil-fuel burning services cleaner and extra sustainable, leading to significant reductions in carbon emissions, such as the utilization of low-carbon fuel, low-carbon hydrogen and low-carbon ammonia,” Reddy elaborates.
Africa’s nascent chemicals sector thereby has an opportunity to leap ahead of the curve, by building sustainability and green design principles into new chemical facility developments from the outset, and by working to decarbonise present choices via technologies like carbon capturing and sequestration (CCS).
Echoing global developments, African National Oil Companies (NOCs) proceed to characteristic prominently within the chemical industry M&A area.
“Chemicals M&A exercise has been relatively quiet in Africa over the previous 12 months. Africa’s oil-rich nations’ corresponding to Nigeria, Angola, and more lately Namibia, who’ve traditionally focussed on the extraction, manufacturing, and supply of crude oil merchandise, at the moment are considering the diversification of their product portfolios as part of their future-proofing efforts. This ought to begin to show leads to the medium-term,” explains Reddy.
These new alternatives arising are in downstream beneficiation of energy merchandise further along the worth chain.
“We may due to this fact see a spate of acquisitions of services that produce petrochemicals, ammonia, and fertilisers, for example, by these NOCs over the approaching years. These acquisitions would operate synergistically alongside their present oil and gas-focussed strategies,” he says.
There are signs that Africa is set to take possession of beneficiation and manufacturing and turn into a web exporter of chemicals, well-poised to produce the mature markets of Asia, the EU, the USA, and its emergent ones.
“Today’s chemical substances sector businesses should navigate the mega-trends of fast population growth, local weather change, digitisations and decarbonisation. Traditional chemical and energy giants, and NOCs, are repositioning themselves to remain relevant in a greener future. We hope to see Africa’s emergent chemical substances sector main the cost in direction of an environmentally and socially sustainable chemical substances business worldwide.”
For extra information, go to

Scroll to Top