It’s not necessary to wire money to a far-flung African locale to invest in the rise of the African consumer. Here are five companies that are making big bets on the continent and conveniently trade on the New York Stock Exchange.
The Swedish telecom system manufacturer reported a big increase in revenue from Sub-Saharan Africa during the second quarter. Sales from the region increased 26% and accounted for over 5% of the firm’s total revenue in the period. African wireless companies continue to build out their 2G infrastructure, which management attributed as the main driver to sales growth. Further growth should be in the offing as mobile users begin to adopt smart-phones.
Ericsson now employs 2,277 people in Sub-Saharan Africa. That’s up 39% over one year ago.
East Africa’s Fly540 airline got a shot in the arm last month after being spun off from its corporate parent, Lonrho. The airline, now owned by Rubicon Diversified Investment Holdings, will be rebranded as FastJet and led by a management team hand-picked by the founder of EasyJet (EZJ:LN), Stelios Haji-Ioannou. FastJet will look to reduce the price of many of its regional flights to just $20 (a fraction of prevailing prices) and to expand its routes dramatically, particularly in Nigeria. It will lease six Airbus aircraft within the next six months and plans to triple that number in time.
Ericsson isn’t the only Swedish telecommunications company active in Africa. Wireless operator Millicom reported $84 million worth of capital expenditure on the continent during its second quarter. Much of the investment went toward purchasing additional wireless spectrum in the Democratic Republic of Congo, a country where it forecasts strong wireless growth in coming years. It estimates the DRC’s wireless penetration rate to be at 55%, and it controls one-third of the market.
Africa accounted for 20% of Millicom’s total sales during the quarter.
The soft drink maker will soon unveil a $28.5 million manufacturing facility in the Kenyan capital, Nairobi. The plant will employ 300 workers. Pepsi re-entered Kenya in 2010 after a 30-year absence, but it has been importing all of its product from outside the country. The new plant should significantly reduce import costs.
Coca-Cola (KO:US) currently controls 63% of Kenya’s soda market, and it isn’t taking Pepsi’s challenge lightly. It is in the midst of a $59 million expansion that includes a new bottling line. Kenyans’ soft drink consumption remained roughly level between 2009 and 2010 at 8.7 liters per person.
Procter & Gamble (PG:US)
This maker of pretty much everything in your kitchen cupboard and cleaning cabinet recently announced last month that it would build a $250 million plant in Nigeria. The facility will employ 750 people.
The factory’s plans come amidst a growing realization that P&G has been losing ground to the likes of Unilever (UL:US) and Colgate-Palmolive (CL:US) in emerging markets. The company estimates that it generates just less than $1 worth of sales per person in Sub-Saharan Africa. This compares with $4 per person in China.