Dazzl, innovators in live multi-camera video solutions, today announced the appointment of APO Group CEO Lionel Reina to their company board. It is a move that highlights Dazzl’s ambitions as they look to accelerate their growth and exposure internationally.
Since they burst onto the scene in 2016 Dazzl have disrupted the world of live broadcasting, using social media to make a high-quality, real-time video available to all.
The company’s immersive technology enables multi-viewpoint content from mobiles, drones and other live sources, creating interactive user experiences that can be published live on diverse social media channels. For the first time, live broadcast-quality content can now be produced from any internet-enabled location using just a smartphone.
As the company enters the next phase of its development, Reina brings a wealth of experience to his role as an advisor. His unique expertise covers the worlds of technology, business, and media relations at an international level – making him the perfect candidate to help bring Dazzl to new audiences in developing markets.
Reina’s current role has seen him work with leading broadcasters and digital publications – not just in Africa and the Middle East, but all over the world – and he brings a fresh, media-savvy perspective as Dazzl looks to accelerate growth and move to the next level.
Previously, Reina was a CEO Middle East and Africa at Orange Business Services (OBS), the B2B division of French telecoms company Orange. He has also worked as Middle East Director in the Gulf region for Accenture.
Reina has extensive experience working on the boards of diverse organizations all over the world. He is the former Vice President of the French Chamber of Commerce in Dubai, sitting on the board from 2009-2012. During the same period, he was Founder and President of the French Executive Club of Dubai (“Le Club”).
“Lionel’s appointment reflects the value we place on his experience and knowledge,” said Thierry Scozzesi, co-founder and CEO of Dazzl.“Uniquely, he bridges that crucial gap between technology and media. Lionel operates right at the heart of the international communications community, and we are thrilled that he will be able to help us as we look to bring our services to new audiences all over the world.”
“What Dazzl are doing in the fields of social media and broadcasting is incredibly exciting,” Lionel Reina commented. “They are a young technology company providing new digital solutions that will revolutionize the way people consume information. As CEO of APO Group, I am in the privileged position of being able to help companies like Dazzl gain exposure. I believe they are exactly the type of organization that can complement our own portfolio in the years to come.”
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.
This could be a major victory of 2019 for Nigerian startups. For the second time in two years, Interswitch is signaling it is now ready to open its share portfolio up for public subscription. The unicorn startup is riding on the wings of the recent relatively successful listing by MTN Nigeria and Airtel Africa. This is seventeen years down the line for the digital payment solution.
Here Is What You Need To Know And How To Get Ready For Interswitch’s Shares
This could be a reality this time. Interswitch has already hired JPMorgan, Citigroup, Standard Bank for the share sale.
This listing could value Helios’s Interswitch at up to $1.5 billion
The listing would happen on the Nigerian Stock Exchange at the same time it is happening on the London Stock Exchange.
JPMorgan Chase & Co., Citigroup Inc., and Standard Bank Group Ltd. are among the firms working on an initial public offering, which may value the financial technology company at $1.3 billion to $1.5 billion, according to reliable sources.
Interswitch had earlier shelved its plans to list in 2016 after the price of crude oil fell dramatically, causing a contraction in Nigeria’s economy.
This Listing Is Drawing An Unclear Path For Africa’s Digital Startups
Just recall Fawry, the Egyptian startup poking at IPO. The startup was acquired by Helios Investment Partners halfway into its journey. Interswitch, originally founded by Mitchell Elegbe also sealed the same fate in 2011 when Helios Investment Partners, a private equity firm dedicated to making growth investments across Africa bit two-third hard into the startup and subsequently acquired a majority stake in the payment startup. Since then, Helios Investment has become Interswitch’s largest shareholder.
This would, of course, leave a big question on the longevity of African-led startups, and whether the popular exit strategy most startups in Africa are resorting is not acquisition. Helios is among several private funds that specialize in investing in African assets as the economic recovery taking place across the continent bolsters investor sentiment and infrastructure plans.
A Look At Interswitch
Interswitch facilitates the exchange of value between service providers by providing a secure shared payment infrastructure and integrated message broker solutions for financial transactions, eCommerce, telecommunications value-added services, eBilling, payment collections, and disbursements. The company developed and administers Verve, the leading card scheme in Nigeria.
The displayed data on popular payment methods in stores, restaurants and other points of sale shows results of the Statista Global Consumer Survey conducted in Nigeria in 2017.
The Verve card, which is currently issued by banks in Nigeria, is the first and only chip and PIN card accepted across multiple payment channels including ATMs, Point of Sale (PoS) terminals, online, mobile and at banks, and enjoys the largest range of value-added services.
The company has been at the forefront of the development and growth of the e-payment sector in Nigeria, which is evidenced by its unique position of being the only switching and processing company connected to all banks in the country as well as to over 10,000 ATMs and 11,000 PoS terminals.
Aside from this, the company is the leading processor for MasterCard and the market leader in merchant acquiring/PoS, a segment that is still emerging and has the potential for tremendous growth in Nigeria.
The completion of the switchover from magnetic strip cards to chip and PIN cards in 2010, is expected to further accelerate growth and usage of e-payments across the country. Nigeria is the first country in Africa to have completed this migration and is one of the few countries in the world to have completed the migration under a year.
Interswitch’s dual listing in the U.K. and Nigeria is merely repeating what Airtel Africa Plc, the wireless carrier and a subsidiary of Indian parent Bharti Airtel Ltd did recently by simultaneously listing on the London and Nigerian Stock Exchange.
Recall that Jumia Technologies AG, dubbed the Amazon of Africa, listed in New York earlier this year, while Dubai-based payments firm Network International Holdings Plc went public in London. All of these recent events may not be unconnected with the recent invitation by the London Stock Exchange to investors around the world, particularly in Africa to come to invest in the Exchange.
Officials from the London Stock Exchange recently completed a roadshow in a bid to boost the LSE’s 115 African listings. The exchange is banking on partnerships with African exchanges, including those in Nigeria and Kenya, for dual listings, according to Director of Emerging Markets and International Markets Ibukun Adebayo.
“If a company has an international strategic growth plan, then the LSE is a perfect vehicle for the company to come and list,” Adebayo said Tuesday in an interview in Nairobi. “If the company is purely domestic and it needs to raise money in the domestic market and increase the number of investors available to it, then the LSE can help work with local partners.”
Firms already included in the LSE’s listing of Companies to Inspire Africa, which the exchange describes as the continent’s “most inspirational and dynamic private, high-growth companies are:
South Africa: Ad Dynamo International, Coega Dairy, Compuscan
Nigeria: Afriland Properties, Alpha Mead Group, ARM Life
Ivory Coast: Azalai Hotel Abidjan, Cipharm SA, Clinique Procréa, Agriex Côte d’Ivoire
Angola: Aldeia Nova, Angola Energy Greentech, Kora Angola, WEZA
Egypt: Cairo Three A, Carbon Holdings, Eagle Chemical Group, Sambo Metals
Morocco: 10 Rajeb, Bricoma, Damandis Maroc, Ama Detergent, Medafrica Systems
There are 360 companies from 32 different countries across the continent, boasting an impressive average compound annual growth rate of 46 percent, up from 16 percent last year, according to Global Finance.
It says on average, each firm employs over 350 people, with an average compound annual employee growth rate of 25 percent.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.
Expect much of startup funding to still come from Egypt before this year ends. This goes to say that the startup ecosystem in the country is very much alive and that a lot of young startup owners are now more determined than ever. New to the list are two startups, XPay, and Colnn which have just raised an aggregate of $350, 000.
XPay
Egypt’s fintech startup XPay secured $250,000 in pre-seed funding from two angel investors. XPay is part of the cohort currently participating in Startupbootcamp Fintech Cairo.
XPay was founded in 2018 by Dr. Mohamed AbdelMottaleb, to empower communities to go cashless. The startup enables universities, schools, gyms, social and sports clubs, residential compounds and different other communities to set up their offerings and collect payment online. XPay’s mobile app allows members in these communities to pay in less than a minute using debit/credit cards, mobile wallet, and a cash collection service.
“XPay was established to become the platform of choice for all members of the family — eliminating the stress of juggling numerous transactions, subscription and bill payments, payment methods and due dates. One platform to ease the unavoidable inconvenience of modern living,” Dr. Mohamed AbdelMottaleb, founder and CEO of XPay said in an interview.
The startup plans to use the use of this funding to grow the company and also expand its team.
The Cairo-based ed-tech startup Colnn has also raised $100,000 from EdVentures, the VC arm of Egypt’s leading publisher Nahder Misr, the startup announced earlier this week. EdVentures also runs an accelerator program for education startups in Egypt.
Founded in 2015 by Tamer Samir, Colnn, per the statement, is a cloud-based school management system that comes with a mobile app, enabling schools to manage their operations, processes, activities, and communication between parents, teachers, and students. The mobile app by Colnn connects teachers and parents allowing parents to keep an eye on their children’s performance and daily activities.
According to Colnn’s website, the students also get an online account that enables them to access announcements, attendance, homework, online quizzes, and their time table.
It’s not clear if Colnn has a per-student subscription model for schools (which is what’s used by a large number of similar SaaS startups) or it charges the school a monthly subscription fee regardless of the number of students they have.
The startup, according to the statement, works with each school to customize its solutions and software according to their requirements (as long customization requirements meet their strategy).
”We’re not sure about the extent of customization but it would be safe to assume that it includes minor tweaks as anything major normally requires a lot of resources and the cost of those changes and upgrades normally outweigh the benefits unless its a very big client,” the startup noted.
Tamer Samir, founder, and CEO of Colnn commenting on the investment said, “Becoming a part of EdVentures will definitely support our expansion plans. Nahdet Misr’s over 80 years of experience in the education sector and its local and international network will help us enter new markets.”
Dalia Ibrahim, the Founder of EdVentures and the CEO of Nahdet Misr Publishing House, added,
“We were keen to add Colnn to our portfolio of companies as it perfectly aligns with our objective of developing and offering new and innovative educational solutions that further strengthen the educational sector in our country.”
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.
Engen Ghana Limited, one of the leading players in the petroleum downstream sector has opened a new station to its existing network of 22 stations nationwide. The station is located in Ayikai Doblo, a suburb of Amasaman in the Ga West municipality and operates a 24-hour service delivery for fuel.
Mr. Henry Akwaboah, MD, Engen Ghana in a statement, said that this latest addition to the network was an assurance to customers that the company was here to stay. The company’s mission is to act more responsibly by ensuring that there are the right skills set of forecourt staff.“With the right skills and knowledge, customers will be better served at this new station and have value for money spent on fuel and lubricants,” he explained.
He said as an international brand, Engen goes the extra mile to produce only the best fuel and lubricants. Ms. Nana Ama Larbie, Retail, and Property Development Manager, at Engen, said the Engen Dynamic Diesel and Primax Super have been purposely produced with the vehicle engines in mind to protect, clean and maintain the engine. This is available at all Engen Service Stations across the country.
“At Engen, we are committed to selling high-quality fuels and lubricants to our customers and the consuming public. We are mindful of the harmful effects of low-quality fuels on vehicles, equipment, and the environment hence, our supply and distribution processes ensure quality assurance right from the loading depot until delivery at our service stations and bulk consumer facilities,” she intimated. He said: “Engen Ghana Limited hopes to continuously improve and expand to meet the needs of their patrons nationwide.”
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.
2019 The OPEC Fund for International Development (OFID) Award for Development has been conferred upon Vida Duti, in recognition of her remarkable work in striving for sustainable water, sanitation and hygiene (WASH) services for the population of Ghana. Duti, who is Country Director of the IRC International Water and Sanitation Centre in Ghana, will receive US$100,000 from OFID in recognition.
Duti leads a team of 12 in Ghana. The team’s priority is advocating for greater financial and political support for WASH, while also supporting national government policies, standards, and guidelines. Its priority in its partner district, Asutifi North, is to support the roll-out of a WASH ‘master plan.’
This plan aims to provide universal WASH services for the entire population of the Asutifi district by 2030. Currently, only around half of the district’s 62,816 people have access to adequate water facilities and just 15 percent to decent sanitation. The project’s coalition includes local government, World Vision, the Conrad N Hilton Foundation, Safe Water Network and non-profit organization Aquaya.
Duti attended a presentation ceremony at OFID’s headquarters during the 40th Annual Session of the organization’s Ministerial Council in Vienna. She said she was humbled to receive the award and that it would motivate and strengthen her resolve to work harder to improve the quality of life of people in the developing world.
“I dedicate this award to the people of Ghana and the Asutifi North district for whose quest I gained this recognition,” said Duti. “I wish to express my profound gratitude to the Chairman and Ministerial Council, the management and staff of OFID. I assure you of my resolve to work harder towards improving the quality of life for people in the developing world, especially Ghana.”
OFID Director-General Dr. Abdulhamid Alkhalifa said: “OFID recognizes the important role women play in the WASH sector, advancing solutions and encouraging behavioral change. Vida Duti’s engagement in this sector is exemplary and is helping to deliver access to safe, reliable and affordable water services to numerous people in Ghana.
“OFID hopes that bestowing this year’s Annual Award for Development to Mrs. Duti will help accelerate action in sub-Saharan Africa, encourage the many women working in development, and highlight the important issues of safe water and hygiene.”
The OFID Annual Award for Development was introduced in 2006 to highlight the achievements of organizations and individuals in poverty reduction and sustainable development. Past winners include: Bangladesh-based BRAC, for its support of Rohingya refugees in Bangladesh; the Foundation for Integral Development in Guatemala; Syrian refugee Doaa Al Zamel; the Children’s Cancer Hospital in Egypt; Kenya’s Kakenya Center for Excellence; Malala Yousafzai of Pakistan; Dr Mazen Al-Hajri, renowned ENT surgeon and philanthropist; Professor Muhammad Yunus; and Bartolina Sisa National Confederation of Peasant Indigenous Native Women of Bolivia.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.
One of the most cultivated leguminous vegetables in Nigeria, Soybean attracted the most gain in agricultural commodities trading on AFEX exchange during June and continued to outstrip paddy rice, cocoa, sorghum, ginger, and maize season-till-date.
The crop gained 3.4 percent week-on-week, moving from an average of 151 points during the first week to 156.50 between 7th and 13th of the month, based on the data obtained from AFEX Commodities Weekly Price Report. The increase drove the soybeans from 2508 percent to 35 percent, followed from a distance by ginger 11.47 percent, maize 11.11 and sorghum 7.79 percent.
The latest AFEX Commodities Index composite – a collection of all commodity indexes averaged together to represent overall market or sector performance- averaged 170.8 points during June, marking a 2.97 point increase from 1.77 percentage point at the beginning due to the closure of markets from the public holidays.
According to the report, the maximizing prices for Maize, Sorghum, Soybean and paddy rice recorded in Shuwarin market in Jigawa state; Oja tuntun, Kwara; Dawanau market, Kano and Mbulatawiwi, Borno state. The minimum price for maize, sorghum, soybeans, and paddy rice were recorded in Sabuwar Kasuwa, Borno state; Leggal, Gombe; Mbulatawiwi, Borno and Kamba, Kebbi state. For ginger, the minimum and maximum price was recorded in Kwoi market Kaduna state.
The report tracked the price movement of commodities traded on the exchange and all executed prices inclusive of logistic costs, covering commodities from the farm gate to the reference delivery point.
During the first week of June, the commodities index composite averaged 167.71 points marking a flat performance over the week due to the closure of markets from the public holidays. All sub-indices of the composite index recorded neutral independent performances for the period with maize falling during the week due to the increase in quantity available in the market without an equal increase in their demand.”
The period saw maximizing prices for Maize, Sorghum, Soybean and Paddy rice in Dawanau market, Kano state; Kwaya Kusar, Borno and Biu, Borno state. The minimum price for maize, Sorghum Soybeans, and paddy rice was recorded in Saba, Kaduna state; Biu, Borno and Burbara, Jigawa state respectively.
Digital platforms on agricultural investments monitored by AgroNigeria show that soybeans deals for July were sold out already. On Farmcrowdy, for instance, a unit of soybeans to be farmed in Jos was offered at N148,000 with 14 percent return on investment in five months. As of July 5th, no units were left.
According to IITA, the demand for soybeans in Nigeria alone is currently estimated at 2.2 million tons while the annual production Is only at 600,000 tons. Although Nigeria remains the largest producer of soybeans in Sub-Saharan Africa, the huge gap between demand and supply makes the crop insufficient for consumption, hence, a need to cultivate soybean.
But according to the United States Department of Agriculture, Nigeria had produced 1.1 million metric tons so far in 2019, rising 4.3 percent from 1.054 million in 2018.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.
Fenix International, a company of ENGIE, offering Solar Home Systems across Africa has appointed co-founder and current COO Brian Warshawsky to the role of CEO.
Fenix International, a company of ENGIE, offering Solar Home Systems across Africa has appointed co-founder and current COO Brian Warshawsky to the role of CEO to drive the next phase of the company’s ambitious growth plans.
Warshawsky is succeeding Lyndsay Handler who has been with the company for 7 years and served as CEO since 2016. Warshawsky is well-placed to lead the company, having previously spent 5 years at Apple as part of the iPod Operations team before co-founding Fenix International in 2009. Having worked as COO with Fenix from inception, Brian has a deep understanding of the business from product design to manufacturing, country operations, distribution, and last-mile customer experience.
Ivan Topalov, who previously served as Corporate Finance Director has been promoted to Chief Financial Officer following the departure of the previous CFO, Josh Romisher, in June. The company has also appointed a new Head of Customer Credit, Alison Boess, reporting to the CEO.
Yoven Moorooven, CEO of ENGIE Africa, said, “Brian is a highly regarded leader with the right mix of skills and experience to lead this new chapter for Fenix as we continue to establish ourselves as the market leader across Africa. With commercial operations in Uganda, Zambia, Ivory Coast, Nigeria, Benin and Mozambique, Fenix is growing from strength to strength. Under Brian’s leadership, I’m incredibly excited about the future of our decentralized energy offering in Africa.”
He continued, “I join everyone at ENGIE and the Fenix team in thanking Lyndsay, Jit, and Chris for their many years of dedicated service and commitment to the Fenix Mission. Under their leadership, Fenix transformed millions of lives across the continent and built an inspiring team that is driven to succeed.”
Brian Warshawsky, newly appointed CEO commented, “While it is difficult to say goodbye to such incredible colleagues and collaborators through so many years, I’m proud to be able to continue their legacy. On behalf of the Fenix team, I would like to thank Jit for his technology leadership and the work he did to build Fenix Power, our next-generation solar home system platform.
I would like to thank Chris for his commercial and marketing leadership as Fenix grew from a few customers in Uganda to 500,000 customers across 6 countries in Africa. And I would like to especially thank Lyndsay for leading Fenix through so many milestones, most recently the ENGIE acquisition and establishing Fenix as the strongest off-grid solar home system company in the industry.”
He added, “Backed by a world-class product, a world-class team and with the full support of ENGIE, I am excited for what we will do to take our life-changing product to customers across the continent. We are now set for an exciting future as we continue our expansion across Africa and achieving universal energy access for all.”
Lyndsay Handler added, “Building Fenix from 2011 to 2017 and accelerating our growth following the acquisition by ENGIE in 2018 has truly been an honour. Together, we have delivered clean, affordable energy to over 500,000 households or 2.5 million people in six countries across Africa.
I am especially proud of the way we built a passionate Fenix team based in Africa who are deeply committed to our mission, values, and customers. Looking ahead, I am happy to pass the torch to our co-founder Brian and I am confident that the entire team will put the customer first in all that we do in Fenix’s next chapter. I hope that Fenix will continue to create new products and drive forward innovation so that clean energy is affordable to all at the last mile.”
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.
This is a major breakthrough for digital platforms across Africa. Less than 9 months after another technologically focused finance solution startup, Sarwa Capital, opened its shares for public subscription, Fawry, the Egyptian digital payment solution has announced it is ready to open itself to the public too by going on its First Public Offering (IPO )
Here Is What The IPO Is Going To Look Like
Although the IPO would come late August 2019 or early 2020, Fawry is only ready to list 36% or more of its stake in the company on the Egyptian Stock Exchange.
The company is eyeing proceeds between EGP 2 and 2.5 bn, which would make the offering the largest Egypt has seen since Emaar Misr raised EGP 2.28 bn in 2015.
It would also value Fawry at EGP 4.5–5.5 bn. The offering will consist of a substantial international component, with the roadshow is set to cover the GCC, European, US, and South African markets.
The offering will include a private placement for institutional investors and an initial public offering (IPO) for retail investors in Egypt at the same price, said investment bank EFG Hermes, which is managing the sale.
The offer price is not yet known as the bank did not give any indication on the expected offer price.
Fawry’s managing director this month told Reuters the company had begun preparing for the IPO on the Egyptian Exchange and that the process would be carried out in 2019 or early 2020.
Financial advisor FinCorp, which Fawry hired to conduct a fair value study, is due to submit its report to the Financial Regulatory Authority within two weeks, after which the book-building process will begin, the sources hinted.
Fawry’s expansion plans include increasing its points of sale, buying new payment machines, and developing Fawry Pay. Fawry also signed an agreement with Dubai Islamic Bank last month to launch a trial run of its services in the UAE this summer.
Here Is Why This IPO is Significant For African Technology Focused Startups
Fawry is owned by local and foreign investment banks and was founded in 2009. About 8% of its shares are in the hands of management and employees.
Fawry’s network processed 600.1 million transactions last year with a total value of 34.2 billion Egyptian pounds ($2.1 billion), EFG Hermes said in its statement.
Fawry made core profit of 152 million pounds in 2018, up 41.2% on the previous year, indicating the increasing viability of FinTech business model across Africa.
The last IPO by a private company on the Egyptian Exchange was financing solutions business Sarwa Capital last October.
Indeed, this IPO shows that Fintech in Africa has increasingly become more profitable as banks. The ability to pay dividends from profits is a major factor every business owner should have in mind before deciding to embark on IPO, and with Fawry which basically runs online with little or no physical presence doing so, this is a major announcement that digitally-focused businesses have finally come to stay.
This notwithstanding, so much credit has to go to the acquisition that happened as far back as 2015. In 2015, a consortium of international financial investors acquired a majority stake in Fawry, a deal that valued the company at EGP773 million (US$100 million) and saw the company adopting an expansion strategy outside of Egypt. The investors are the Egyptian-American Enterprise Fund (EAEF), pan-African private investment firm Helios Investment Partners, and the International Finance Corporation.
* $1 = 16.5600 Egyptian pounds
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.
Pepsico, the world’s third-largest food and drinks company has decided to seal its largest deal ever, out of the United States. Unexpectedly, South Africa is its most preferred destination. Any moment from now, the final gavel would go and Pioneer Foods, the South African local brand which owns major brands like Sasko, Spekko, Liqui-Fruit, Ceres, and Bokomo would become part of the Pepsico’s global portfolio.
“As we look to accelerate our growth in key markets around the world … we are absolutely thrilled to join forces with … one of South Africa’s leading food and beverage companies,” said Pepsico CEO Ramon Laguarta. “Pioneer Foods represents a differentiated opportunity for PepsiCo and allows us to immediately scale our business in Africa.
Now Here Is The Deal And Why Pepsico Is Settling For South Africa
This is a major acquisition in which Pepsico would be paying a 56% premium to Pioneer’s share price before the deal. Doing so means that Pepsico has seen substantial value in what lies ahead.
The deal is of much greater significance than the R24 billion PepsiCo will spend on buying Pioneer, says Schalk Louw, a portfolio manager at PSG Wealth.
Pepsi vs. Coca-Cola
“It sends a message that one of the largest companies in the world has faith in South African Incorporated,” says Louw.
It is hugely promising that a massive American company would do one of its biggest deals outside of the US in South Africa — it must mean that it is taking a positive view on the long-term prospects of the country, says Henry Biddlecombe, an analyst with Anchor Capital.
Two years ago, there were rumours that an international company — very likely PepsiCo — was considering buying Pioneer. But it was apparently scared off by a succession of credit rating downgrades and the political turmoil of the Zuma era.
Now it’s back, and this time Pioneer is a much bigger bargain.
In 2017, Pioneer was an R45 billion company — it shrank to R15 billion this year amid a perfect storm that wreaked havoc on its profitability. Rocketing maize prices, tough competition in the bread market and embattled consumers have hurt Pioneer.
Surprisingly, it seems Pepsico is coming just at the right time.
Data showed that South Africans have been shopping more than expected. Retail sales rose by 2.2% in the year to May — while economists were only expecting 1.7%. April’s number has also been revised upwards. Consumer spending represents 60% of the SA economy, which means that the GDP should have expanded in the second quarter, and a recession may have been avoided.
Apart from Pepsi, the US giant owns Mountain Dew, Lay’s, Gatorade, Tropicana, 7 Up, Doritos, Quaker Foods and Fritos.
Here Is What This Major Investment Could Mean For South Africans
Hope At The End Of A Tunnel?
Expect this to be a major remarkable sign of turn-around for the struggling South African economy. The first phase of a chain of these events has already happened. A 25 basis-point interest rate cut — the first in more than a year was reached last week, and the rand rallied to around R13.82/$ (from R15.02 to the dollar barely a month ago).
Although it may still be premature to speculate, the Pepsico deal is definitely a sign that South African market may be nearing the bottom of a very difficult period, says Damon Buss, equity analyst at Electus. Pepsico is paying a 56% premium to Pioneer’s share price before the deal, so it is clear they see substantial value in what lies ahead, Buss added. Buss believes South African consumers will remain under pressure for the rest of this year, but 2020 should bring relief.
A Deal From Pepsico Is No Ordinary Deal; So Expect More Takeovers
Right now, a lot of companies in South Africa are currently significantly cheap, says Biddlecombe. Recently, the Israeli firm Central Bottling announced its plans for a takeover of a South African dairy giant Clover. (The deal has hit a stumbling block after protests from a pro-Palestine group, but could still go ahead.) Tiger Brands — SA’s biggest branded food company — could also be a target, given that its share price has halved over the past year, Louw said. The company was hit by the listeriosis crisis, which killed more than 180 people in South Africa.
Louw expects more South African companies to become takeover targets, particularly in the food sector, where companies are cheap after a nightmare period of drought, a rocketing rand, sky-high fuel prices, and depressed household spending.
A Major Win For Consumers As They May Get More At Cheap Prices
“Pepsico is likely going to shake up the consumer market,” predicts Buss. Under former CEO Phil Roux, Pioneer made some progress to move away from basic commodities (maize meal, bread) to higher-margin branded products. But when Roux left the company in 2017, the current management seemingly struggled to progress, says Buss.
Now PepsiCo will use its considerable global know-how to boost Pioneer Foods groceries brands to a new level, which will mean trouble for Tiger Brands, owner of competitor brands like Albany, Ace, and Tastic. Add to that an increasingly aggressive Libstar, which owns Lancewood, Denny and produces food under the Woolworths and Pick n Pay labels, and competition in consumer products is expected to heat up. This should mean lower prices and better products.
Also, PepsiCo will almost certainly use the Pioneer Foods distribution network to launch some of its products in South African supermarkets, says Louw.
This means more products for consumers to choose from, and also more price competition. PepsiCo may use its massive balance sheet to spend money on promotions establish its new products locally, thinks Buss.
South Africa’s Manufacturing Index May Increase The Largest Now
“Pioneer Foods forms an important part of our strategy to not only expand in South Africa, but further into sub-Saharan Africa as well,” said Pepsico CEO
While Pepsico noted in its statement on the planned deal that Pioneer will offer it a solid ground for further expansion into Sub-Saharan Africa by boosting its manufacturing capabilities, this is invariably going to lead to a well-drawn battle for the sub-Saharan African market and a major win for manufacturing. Now the fallout of this is that more of Pepsico products could be made locally would be made in South Africa.
“We think Pepsico is seeing the transaction primarily as an opportunity to expand into Africa, using South Africa as a launchpad,” says Buss. Will Pepsico also ramp up exports of Pioneer’s South African brands — including Liquifruit and Ceres — to overseas markets? Buss doesn’t think so. “The global beverage market is notoriously competitive.” However, given that Pepsico is shifting to healthier snacks, the global giant may be interested in Pioneer’s dried-fruit brand Safari, and some of its Bokomo rusk and biscuit brands, for overseas expansion.
Beyond South Africa, Pioneer exports to around 80 markets and has joint-venture operations in Namibia, Botswana, Kenya, and Nigeria.
In late-2014, the pair agreed to terminate their ten-year tie-up in Pioneer’s home market. Pioneer has been PepsiCo’s brand bottler and distributor in the country since 2005 but had to take an impairment charge on the business, prompting the mutual decision to quit.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.
Give it to South Africa. Unlike Rwanda that recently introduced the first public coding academy which only a few students may ever get a chance to attend, South Africa is going the extra mile to making it compulsory for coding and robotics to be taught in all primary and high schools across the country. This will, of course, take off in 2020, when a new curriculum comes into effect. This appears to be a major first in Africa.
Here Are Things You Need To Know
South Africa’s Department of Basic Education is currently updating its curriculum to ensure that the children coming from the South African education systems are equipped with the skills that will ensure they are ready to either become tech entrepreneurs or enter the workforce from day 1 of graduating from high school. This is according to Tourism minister Mmamoloko Kubayi-Ngubane who was presenting at the High-Level Political Forum on Sustainable Development at the United Nations recently.
“(The) South African government has developed Coding and Robotics curricula Grade R-3 and will complete Grade 4 to 9 before the end of 2019,” she said.
“This curricula will provide learners with understanding and will develop their skills and competencies to prepare them for the 4th Industrial Revolution. The curricula will ensure that our schooling system produces learners with the foundation for future work and equip them with skills for the changing world.”
Here Is The What Is Intended by The South African Government
The coding curriculum is aimed at developing learners’ ability to:
Solve problems, think critically and work collaboratively and creatively;
Function in a digital and information-driven world;
Apply digital and ICT skills;
Transfer these skills to solve everyday problems.
“Using University of South Africa’s (UNISA’s) 24 ICT Laboratories located throughout the country, 72,000 teachers will be trained to teach coding to primary school learners,” Kubayi-Ngubane said.
“We will do this in partnership with civil society, academic institutions and businesses such as Africa Teen Geeks and international players like MIT.”
To make this happen, South Africa’s Department of Education has already developed a framework for ‘teaching and learning of coding’.
“Coding requires a dedicated platform and the Department with the assistance of Google and other Big Businesses through Africa Teen Geeks are developing a coding platform that will utilise Artificial Intelligence and Machine Learning to customise learning and teaching.
“This Coding platform will be available in all 11 official languages ensuring that rural and township children will be introduced to coding in their own mother tongue in line with this government mission to provide an inclusive education accessible to all,” she said.
Kubayi-Ngubane said that the Department will pilot the coding curriculum in 2020.
“Throughout this year we are preparing the system to ensure that the schools are ready for full implementation post 2020. Each township and rural school in the country will be appropriately resourced to ensure creation of an enabling environment,” she said.
South Africa Is Setting A Big Example For Other African Countries
Take it or leave, the era of technological disruption has come to stay. Forward-thinking countries are shooting their shots early. For example, computer programming will become a mandatory subject in Japan’s elementary schools from April 2020, as the country seeks to train a new generation in highly sought information technology skills.
The basics of coding will be taught starting in the fifth grade. New textbooks approved by the education ministry on March 26 task students with digitally drawing polygons and making LED lights blink using simple commands, for example.
South Korea began working the subject more heavily into elementary and middle school curricula in a 2007 review of its educational system.
In 2014, the U.K. introduced programming into mandatory education for students aged 5 to 16
With the growing influence of technology, expect it to take priority over basic analytical subjects such as maths in no due time.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.
