Global trends unearthed and analysed indicate that the chemicals sector is increasingly being pushed by Environmental, Social, and Governance (ESG) considerations. It additionally indicates that decarbonisation is often a key rationale behind the investments (and divestments) in the sector, except for Africa where investments understandably lagged again this year.
These are the findings of the newest Chemicals Executive M&A Report for 2022 released by world management consulting firm Kearney, now in its ninth version.
“The reasoning for this is because there are merely not that many attractive goal corporations with appropriate ESG credentials available to accumulate for chemicals organizations trying to make investments and consolidate on the continent,” explains Prashaen Reddy, Partner on the agency.
As the least industrialized continent, where up to 600million people nonetheless reside without electrical energy, Africa’s chemical trade is emergent, and its markets are immature in comparison to its Asian, European, and Middle Eastern counterparts.
Nevertheless, เกจวัดแรงดันน้ำไทวัสดุ is a key component of Africa’s financial system. A large complex business, with various sub-sectors, Africa’s chemical industry is intrinsically interlinked with other sectors – fuels, prescribed drugs, plastics, and manufacturing, to call a quantity of.
The sector is responsible for key outputs and crucial commodities alongside several industries’ entire value chains.
In South Africa, the continent’s most developed chemical market, the sector accounts for around 25% of manufacturing gross sales. (Chemical and Allied Industries’ Association:
ESG and decarbonisation more and more being the dominant rationales behind M&A offers in the global chemical compounds sector have resulted in a strong investor appetite for M&A targets with good ESG credentials, permitting Africa’s chemical corporations that embrace ESG to place themselves to draw funding.
“Although realistically Africa will nonetheless need to harness its abundant hydrocarbon-based energy reserves to stay economically aggressive, there are proven strategies to make even fossil-fuel burning facilities cleaner and extra sustainable, leading to significant reductions in carbon emissions, corresponding to using low-carbon gasoline, low-carbon hydrogen and low-carbon ammonia,” Reddy elaborates.
Africa’s nascent chemical compounds sector thereby has a possibility to leap forward of the curve, by constructing sustainability and green design ideas into new chemical facility developments from the outset, and by working to decarbonise current offerings via technologies like carbon capturing and sequestration (CCS).
Echoing international tendencies, African National Oil Companies (NOCs) proceed to function prominently within the chemical business M&A space.
“Chemicals M&A exercise has been relatively quiet in Africa over the previous 12 months. Africa’s oil-rich nations’ such as Nigeria, Angola, and more lately Namibia, who have historically focussed on the extraction, production, and supply of crude oil products, are actually considering the diversification of their product portfolios as a half of their future-proofing efforts. This should start to show ends in the medium-term,” explains Reddy.
These new opportunities arising are in downstream beneficiation of power products further alongside the value chain.
“We might 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 indicators that Africa is decided to take ownership of beneficiation and manufacturing and become a net exporter of chemicals, well-poised to supply the mature markets of Asia, the EU, the USA, and its emergent ones.
“Today’s chemicals sector businesses must navigate the mega-trends of fast inhabitants enlargement, local weather change, digitisations and decarbonisation. Traditional chemical and power giants, and NOCs, are repositioning themselves to remain related in a greener future. We hope to see Africa’s emergent chemical compounds sector leading the charge in the direction of an environmentally and socially sustainable chemical substances business worldwide.”
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