Why the time is right for expansion into Africa

Alec Erwin was the keynote speaker at the Plastics SA conference at Propak Africa 2016
At the Plastics SA conference, which was held on 16 March at Propak Africa 2016, the previous Minister of Public Enterprises, Alec Erwin, encouraged local plastics manufacturers for rethink their approach to doing business in the rest of Africa, and seize the significant opportunities the region holds for business expansion.

Speakers at the conference highlighted the sustainable future of plastics under the event’s theme, “The Triple Bottom Line and the Plastics Industry”. These local and international experts unpacked the issue of how people, planet and profit are affected by the current and future plastics environment.

As the keynote speaker, Erwin looked back at the history of South Africa’s involvement in business in the rest of the continent. He also outlined the challenges that local manufactures face in growing their presence in the region. He communicated a very strong message that opportunities exist for businesses to expand into Africa, but that this will take close collaboration among South African producers as well as industry players in the region.

‘South Africa has a great deal going for it, but the challenges are considerable. This is because the world is changing at a rapid pace and so is the economic configuration of the globe. At one stage, the great powers in trading negotiations were Europe and the US. Less than 20 years later, trade negotiations are fundamentally different, with the great powers of China, India, Brazil and Russia causing a complete change.’

He explains that these economies are industrialising very fast. South Africa is in an interesting position within the new global economic configuration. Businesses in the country are a fundamental part of Africa, and possess a higher level of industrialisation than most African companies. To retain its level of industrial activity, the nation will have to compete with new industry giants.

Stepping into the future with African involvement

‘How do we compete?,’ asks Erwin. ‘The answer for me is glaringly obvious. We have to understand and accept that we are a part of the continent. For a long time, companies were looking outside the continent to invest. This was a fundamental error and the pioneers that did go into Africa at that stage, were able to achieve great success. This giant continent is now our future.’

The region will, however, be a contested zone. For this reason, local companies need a strategy and should consider ways of linking with plastics industries in other countries. Businesses will also have to be open to collaboration and set aside fears that greater transparency about their activities will give competitors the upper hand. ‘In order to formulate strategies for Africa, companies have to talk to one another.’

Collaborating with manufacturers and linking with economies in the region will be vital. Erwin points out the demand for plastics in Africa will increase, and will have to be met with innovation. ‘South African should be the leaders in this arena. We have to open our links and lead in Africa,’ he concludes.