Connect with us

Business

Egyptian Automotive Aftermarket Enters Fast Lane

Published

on

Egyptian Automotive Aftermarket Enters Fast Lane

Egypt’s automotive aftermarket is accelerating and has been dubbed “one of Africa’s most exciting markets” as its motoring population and vehicle sales grow, its economy expands, FDI floods in, and the government moves to combat automotive emissions.

It’s a powerful combination which Germany’s Africa business experts africon GmbH, the knowledge partners of Automechanika Dubai, the Middle East and Africa’s largest international automotive aftermarket trade show, contends has resulted in an aftermarket now worth between US $1-2 billion. And africon GmbH should know, having worked on more than 30 automotive market projects across Africa in the last few years.

The company has now turned its expertise specifically on the high potential Egyptian market with a whitepaper collated from research among companies within the Arab republic’s automotive industry.

Opportunity Rising:

The paper’s positive and opportunistic sentiment points to the country’s rising population – now the third largest within Africa with more than 100 million people – and its economic advancement, having overtaken South Africa as the continent’s second-largest economy with a GDP of US $360 billion and sturdy growth forecasts.

“The IMF predicts that growth will slow to around 2.5% this year but recover to more than 5% from 2022 forward,” the paper reports. “After economically difficult years in 2016/17, inflation has come down to around 6%. Unemployment has been reducing, and GDP per capita in US$ terms has increased by almost 50% since 2017. Consequently, Egypt has been the largest recipient of FDI in Africa for several years in a row, receiving more than $9 billion worth of investments in 2019 and almost $6 billion in 2020. This growth is driven, among other things, by continuous economic and fiscal reforms. For instance, on the Ease of Doing Business Index, Egypt has improved by 14 places since 2018.”

Egypt is now in growth mode, even despite the rigors of the COVID-19 pandemic and was among the few countries to report full year GDP growth in 2020.

Growth Market:

The growth has fed into the aftermarket, with the country now being home to one of Africa’s largest vehicle fleets with around six million vehicles on the country’s roads, with the majority – approximately 4.6 million – being passenger cars. This is followed by almost a million trucks and about 470,000 buses. Most passenger cars are petrol-powered, while many commercial vehicles rely on diesel engines but that could soon change.

“The government is increasing the share of dual-fuel cars, which can use both petrol and compressed natural gas (CNG). Around 300,000 vehicles in Egypt already use CNG. This number will likely increase further over the next years,” the paper reports.

Egypt is also taking bold steps to replace internal combustion engines with more environmentally friendly alternatives. Last year the government announced an initiative to encourage consumers to replace old vehicles for new ones operating on CNG engines with extended credit facilities among its green program incentives. This has led to China’s Dongfeng Motors planning to assemble up to 25,000 electric vehicles a year in an Egyptian assemble plant.

Even the brand make-up of the country’s vehicle fleet is changing. The significant market shares held by Chevrolet/Isuzu, Hyundai, Toyota, and Nissan could be eroded by the entry of European and Chinese brands fueled by preferential import duties.

“New vehicle sales in Egypt have recently grown, currently standing at more than 200,000 units per year. Around half of this figure is assembled locally. Egypt is home to notable local vehicle assemblers like GB Auto, General Motors Egypt / Mansour Automotive, and Nissan. While most passenger vehicles are produced for the domestic market, many buses are exported to regional markets,” explains the whitepaper.

Change The Name of the Game:

Change is also coming to Egypt’s heavily import-driven aftermarket, which is dominated by Asian suppliers, namely China, Korea, and Japan. However, Germany and the US now rank among the country’s top ten suppliers of parts and components and globally leading brands enjoy relatively high market shares for crucial parts. But the local component manufacturing market is gaining ground and supplying local vehicle assemblers, the aftermarket and export markets with a range of batteries, brake parts, wiring and filets.

Egypt’s importer/distributor landscape is a mix of small and large companies, most of which are based in Cairo. The independent aftermarket is fragmented. The importers/distributors sell directly to end-users, workshops, and a network of wholesalers and retailers across the country. As is the case in other African markets, a significant share of Egyptians, having taken the advice of trusted mechanics, buy their parts from retailers instead of from workshops. However, most do follow the advice of their trusted mechanics.

The Trend & Outlook:

E-commerce is fast emerging as a significant aftermarket force through highly visible platforms such as Odiggo, Tawfiqia, Egyparts and Amazon Egypt.

The Egyptian aftermarket is ripe for growth and to offer up great opportunities for parts producers, distributors, and service providers, but increasing competition from local producers may mean overseas suppliers will need to invest in their own on-the-ground structures or seek out ways to add value locally to increase market shares.

GB Auto, a leading Egyptian automotive supplier, sums up the expected scenario: “We currently see three factors strongly influencing the future of our market in Egypt: firstly, we are expecting a period of robust growth across various industry segments. Secondly, online sales will likely gain significant importance. Thirdly, the share of CNG-powered vehicles increasing further, which will open up new industry segments and growth opportunities,” explained Mohamed Yahia, Managing Director of Ready Parts (GB Auto Group).

Others looking for indicators of the growth potential can track the Egyptian visitor presence at Automechanika Dubai which has risen by 20% since 2015.

“We anticipate a surge in visitors from Egypt when the show returns from December 14th-16th December. This year we have the support and presence of Egypt Expo & Convention Authority (EECA) and have also seen a 142% y-o-y (2019-2021) increase in floor space taken from Egyptian businesses – a true testament to current conditions and the appetite for doing business,” commented Mahmut Gazi Bilikozen, Automechanika Dubai’s Show Director.

63 / 100

Business

OANDO WINS DEAL OF THE YEAR AWARD AT AFRICA ENERGY WEEK 2024

Published

on

By

 

 

-Story by Joy Agamah

Oando Plc, Africa’s leading energy solutions provider listed on the Nigerian Stock Exchange (NGX) and Johannesburg Stock Exchange (JSE) is pleased to announce that the Company has emerged winner of the ‘Deal of the Year’ award at Africa Energy Week (AEW) 2024.

The Africa Energy Chamber (AEC), the organisers of the annual week-long oil and gas conference, hosted and recognised different stakeholders at a Gala and Award night held at the Cape Town International Conference Centre (CITCC), on Tuesday, 5 November, 2024.

In a category comprising other high-profile deals in the sector and across Africa, Oando won the award in recognition of the Company’s recently completed landmark $783 million acquisition of the Nigerian Agip Oil Company (NAOC) from the Italian Energy firm Eni on 22 August, 2024.

This acquisition, 10 years in the making since Oando’s initial entry into the ConocoPhillips/NAOC/NNPC Joint Venture (JV) in 2014 when the Company acquired ConocoPhillips Nigeria business, doubled the company’s stake in the JV to 40% and operator of the assets.

In receiving the award, the Company’s Group Chief Executive, Wale Tinubu, remarked “We are delighted and honoured to receive the ‘Deal of the Year’ award from Africa Energy Week. It’s been a remarkable year on many fronts. First, we marked our 30th anniversary as a business, then concluded our strategic plan to acquire our second IOC in a decade, Nigerian Agip Oil Company (NAOC) and step up to the role of operator.

“This award is more than just an accolade for a successful deal closure; it represents a public acknowledgement of the culmination of 30 years of grit, hard work, resilience, and sheer belief in our vision. It is a testament to my belief that with the #HumansOfOando, impossible is nothing. I’d like to thank the dream team, the #HumansOfOando, our financiers, and partners for their belief and role in making this award a reality.”

The acquisition is the culmination of a decade of preparation, strategic planning, and unwavering commitment to a vision of becoming Africa’s first indigenous International Oil Company.

It is a testament to the organisation’s 30-year journey spanning the entire energy value chain, with consistent and deliberate actions at each stage that have led to the advancement of indigenous participation in the industry.

The Deal of the Year award “recognises the most transformative and impactful deal in the energy sector – honouring excellence in negotiation, strategic alignment, innovation and collaboration – and celebrates deals that drive advancements in energy and economic growth.”

With this year’s AEW theme of “Invest in Africa Energies: Energy Growth Through an Enabling Environment”, the AEC, through the AEW Awards 2024, recognised other persons, International (IOCs) and National Oil Companies (NOCs) across the continent through awards in 10 categories.

 

Tinubu at the event also delivered a key note address with the topic, Transforming Africa’s Oil and Gas landscape through strategic Merger and Acqusition.

During the address he  noted that indigenous companies contribute approximately 30% of the country’s crude oil production and hold around 40% of the total oil reserves. Additionally, they account for 60% of the country’s gas production and approximately 32% of gas reserves. This data underscores the growing significance of local players in the African oil and gas sector.

He also highlighted improvements in the business environment, citing the improved Ease of Doing Business driven by recent reforms that have attracted increased investments in energy. Tinubu pointed to the successful Implementation of the Petroleum Industry Act (PIA), which has established a regulatory framework that enhances transparency and boosts investor confidence.

Tinubu’s remarks included a call for enhanced collaboration among policymakers, investors, and oil and gas companies to foster the growth of indigenous firms through supportive regulations, financing access, and technology transfer. He urged stakeholders to focus on leveraging M&As to diversify and expand capabilities within the sector while emphasizing the need to strengthen Africa’s institutional and financing capacity for local firms.

As Oando continues on its growth trajectory, Tinubu’s insights served as a powerful reminder of the strategic importance of indigenous companies in Africa’s energy transformation and the collective effort required to drive sustainable development across the continent.

 

59 / 100
Continue Reading

Business

We do not understand limits; we strive for the best” Oando boss, Tinubu

Published

on

By

Oando restates commitment to a sustainable energy future for Nigerians

In continuation of his dedicated mission to ensure a robust sources of energy for Nigerians, Wale Tinubu, the Group Chief Executive, Oando Group, has emphasized the company’s long-standing dedication to transforming lives through accessible energy sources.

“This is an energy story we’ve been writing for over 30 years. We are changing Nigeria’s lives every day by providing access to varied energy sources that power industries and fuel the economy,” Tinubu stated.

 

Tinubu, in a compelling narrative about Nigeria’s energy landscape, conveyed a strong sense of purpose, asserting that Oando has a mission to demonstrate the capacity of indigenous companies to lead the nation’s energy sector.

While drawing a parallel to Nigeria’s independence in the 1960s, he explained, “We see this as the emancipation of Nigeria’s indigenous oil and gas community.

“With a deep understanding of the resources beneath the surface, Oando is determined to excel and embrace meritocracy. We do not understand limits; we strive for the best,” Tinubu affirmed.

He noted that the company adheres to global standards in operations and maintenance, while at the same time showcasing its commitment to quality and excellence.

Highlighting the significance of the Okpai Phase I and II projects, Tinubu explained that the facilities boast a combined capacity of approximately 1GW, marking them as “the most reliable and efficient plants in the country.

“Since 2005, Okpai has contributed over 43,435 GWh to the national grid, enabling communities across Nigeria to thrive. Okpai Phase II is set to make an immediate impact, with an expected injection of 300 MW into the national grid, followed by an additional 180 MW anticipated by the third quarter of 2025.”

Tinubu emphasized that the $800 million, 480 MW facility is centered on the company’s mission: “Building our nation remains at the heart of what we do.”

He went further to highlight Oando’s commitment to local communities, noting that over 8.5 GW of electricity has been delivered since the commissioning, and stressing the company’s role in fostering employment.

“We have achieved 12,332,594 LTI-free man-hours as of September 2024,” he proudly announced.

Oando continues to lead the charge in the energy sector, taking significant strides in illuminating the lives of Nigerians and securing a sustainable energy future for all.

Continue Reading

Business

Wema Bank Declares profit before tax of ₦60.62bn

Published

on

By

 

 

 

Wema Bank Nigeria has released its unaudited Consolidated Financial Statements for the period ended September 30th 2024, to the Nigeria Exchange Group (NGX). The Bank reported profit before tax of ₦60.62bn, representing an increase of 174% over the ₦22.13bn recorded in the corresponding period in 2023.

 

Wema Bank’s balance sheet remained well structured with total assets growing by 38% to

 

₦3,084.27 trillion in Q3 2024 from ₦2,240.06trillion in FY 2023. The bank also grew its deposit base year to date by 23% to ₦2,292.30bn from ₦1,860.57bn reported in FY 2023. Loans and Advances grew by 25% to ₦1003.28bn in Q3 2024 from ₦801.10bn in FY, 2023. NPL stood at 3.19% as at Q3 2024.

 

The bank recorded an improved 3rd quarter performance as Gross Earnings grew by 91% to

 

₦288.32bn (Q3 2023: ₦150.90bn)). Interest Income was up 81% y/y to ₦229.11bn (Q3 2023:

 

₦126.67bn). Non-Interest Income up 144% y/y to ₦59.21bn (Q3 2023: ₦24.23bn).

 

Return on Equity (ROAE) of 38.62%, Pre-Tax Return on Assets (ROAA) of 2.64%, Capital Adequacy Ratio (CAR) of 14.06% and Cost to Income ratio of 60.47%, speak to the resilience of the brand.

 

The Managing Director/Chief Executive Officer of the bank, Mr. Moruf Oseni said, ‘our Q3 2024 numbers speaks to our resilience despite a tough operating environment. We will sustain our growth trajectory into 2025. The performance is headlined by impressive improvements in Profit before Tax which grew strongly by 174%. The growth of Gross Earnings by 91.07%, Total Assets by 38% and earnings per share at 328.1kobo shows the core improvements to our balance sheet. In addition, our cost to income ratio at 60.48% has witnessed significant improvement from the previous period.

 

 

46 / 100
Continue Reading

Trending News