Global trends unearthed and analysed indicate that the chemical compounds sector is increasingly being pushed by Environmental, Social, and Governance (ESG) concerns. It additionally signifies that decarbonisation is usually a key rationale behind the investments (and divestments) within the sector, apart from Africa where investments understandably lagged again this yr.
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 version.
“The reasoning for this is because there are merely not that many attractive target companies with suitable ESG credentials available to accumulate for chemical compounds organizations looking to make investments and consolidate on the continent,” explains Prashaen Reddy, Partner on the agency.
As the least industrialized continent, where up to 600million individuals nonetheless live with out electricity, Africa’s chemical industry is emergent, and its markets are immature in comparison to its Asian, European, and Middle Eastern counterparts.
Nevertheless, the chemical compounds sector is a key part of Africa’s economy. A massive complicated trade, with various sub-sectors, Africa’s chemical industry is intrinsically interlinked with different sectors – fuels, pharmaceuticals, plastics, and manufacturing, to name a few.
The sector is answerable for key outputs and essential commodities alongside a number of industries’ complete value chains.
In South Africa, the continent’s most developed chemical market, the sector accounts for around 25% of manufacturing sales. (Chemical and Allied Industries’ Association:

ESG and decarbonisation more and more being the dominant rationales behind M&A offers in the world chemical substances sector have resulted in a powerful 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 aggressive, there are proven strategies to make even fossil-fuel burning amenities cleaner and extra sustainable, resulting in significant reductions in carbon emissions, such as using low-carbon fuel, low-carbon hydrogen and low-carbon ammonia,” Reddy elaborates.
Africa’s nascent chemicals sector thereby has a chance 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 offerings by way of technologies like carbon capturing and sequestration (CCS).
Echoing international tendencies, African National Oil Companies (NOCs) proceed to characteristic prominently within the chemical business M&A space.
“Chemicals M&A activity has been comparatively quiet in Africa over the past 12 months. Africa’s oil-rich nations’ similar to Nigeria, Angola, and extra just lately Namibia, who have historically focussed on the extraction, production, and supply of crude oil merchandise, are actually contemplating the diversification of their product portfolios as a part of their future-proofing efforts. เครื่องมือที่ใช้ในการวัดความดัน should start to show leads to the medium-term,” explains Reddy.
These new alternatives arising are in downstream beneficiation of vitality products further along the value chain.
“We could subsequently see a spate of acquisitions of services that produce petrochemicals, ammonia, and fertilisers, for example, by these NOCs over the coming years. These acquisitions would operate synergistically alongside their present oil and gas-focussed methods,” he says.
There are signs that Africa is set to take possession of beneficiation and manufacturing and turn out to be a internet exporter of chemicals, well-poised to provide the mature markets of Asia, the EU, the USA, and its emergent ones.
“Today’s chemical compounds sector companies must navigate the mega-trends of rapid population expansion, climate change, digitisations and decarbonisation. Traditional chemical and vitality giants, and NOCs, are repositioning themselves to stay related in a greener future. We hope to see Africa’s emergent chemicals sector leading the charge in the direction of an environmentally and socially sustainable chemical substances trade worldwide.”

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