If Africa has the second largest continent and population in the World, why not consider it as a business potential for fertilizer industry?
Analysing the facts of Africa, it’s the second largest continent in the world with more than 30 900 000 km2 of total area and also the second largest world population with about 1.2bi people, it means that we have a huge area to work on. And the key for its development is partnerships.
With more than 60% of its 1.166 billion people living in rural areas, Africa’s economy is inherently dependent on agriculture. More than 32% of the continent’s gross domestic product comes from the sector considering that food is the basis for humans, and the fertilizer is essential for rural areas where most food comes from.
Africa has receiving more than USD30bi of foreign investments for the fertilizer market since 2012 till now. Huge corporations and others are coming to invest in agribusiness in Africa and creating local opportunities as well, for example Bagtech has a Japanese company as its partner: Toyota. Bagtech delivered a fertilizer blending plant to them in Kenya in 2016, and the company projects 2017 better than last year.
According to The World Bank and US Department of Agriculture projects the agriculture and agribusiness in Africa will grow to be US$1 trillion industry in Africa by 2030. To promote this outcome, the continent must review its incentive structures. Over the next decade, fertilizer use is projected to increase by almost 2 percent annually, which is consistent with overall crop production growth trends.
In the North of Africa is possible to find one of the largest phosphate reserves in the world as well the main exporters of fertilizers in Africa. The main consumers of fertilizer in World are China, India, USA and Brazil which are considered more developed areas using more fertilizer per hec than Africa. And the main consumers of fertilizer in Africa are Egypt, Morocco, Nigeria, Kenya, Ethiopia and South Africa respectively. According to FAO, Africa growth fertilizer demand will increase more than others continent with 3.6%.
So why not believe in Africa?
The company has a long history in Africa. Bagtech is proud to be an African company which started its activities in 80’s when the coffee market was booming. By that time the company was offering services for coffee market in Africa, and after some years started to develop its own equipment for agri industry. “We had a long and hard way to become who we are today, and nowadays we provide services and equipment from Africa to Africa focus on fertilizer market.” Fred Coelho, Managing Director. The company’s main goal is to offer their clients all their expertise in the fertiliser and agro-industry by providing consultancy, equipment and services around Africa.
Most of fertilizer equipment found in Africa region has more than 30 years old and most of them are in a bad condition due to lack of maintenance. Maintenance is essential every day since fertilizer product is a very corrosive product. Bagtech team is always present at the customer’s facility providing service and showing how to clean the machine after work. It can impact on customer’s production if it is not clean proper, also can rust the machine. “Maintenance is the most important part of equipment to keep it on, and our team is always assisting our customers across Africa and training their staffs how to make it every day “says Fred Coelho.
Developed in a partnership with Festo, Bagtech equipment comes with an advanced technology which can be controlled by online system from anywhere with your laptop or cell phone.
“In my view, Africa needs to encourage African companies and give the opportunity to show that we also have technology and knowledge to offer. When you encourage local content, you create local jobs, companies can invest on technology and on people. Both can grow together” says Fred Coelho. Bagtech has grown significantly and currently employs 150+ workers having as its clients the main players in fertilizer market such as Toyota Kenya, TWK, ETG, Yara and others. They manage 7 fertilizer plants in South Africa and have capacity to manufacture about 10 custom made equipment per year. The company can design in-house fertilizer blending plants from very small capacities to over 100 tons per hour, coating plants , bagging equipment from 10kg to 1ton, screening equipment and any other compact plant as per customer needs.
Africa is showing its potential on fertilizer market, is showing that has professional people and technology to offer to Africa and to the world. Bagtech has equipment across Africa and offer services for more than 30% of main ports in Africa. The company delivered more than 90 fertilizer equipment for Africa along its history.