Tuesday, February 03, 2009

The scramble is on in Africa

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Africa has certainly captured the world’s at­tention. In fact, global leaders – both business and political – are making regular and long stopovers at a land once called ‘The Dark Continent.’ Raison d’être: Africa is on the verge of an economic rebirth. Statistically, many of the fastest growing economies in the world are in Africa, providing global brands an opportunity to invest and reap returns. “After Africa there will be no ‘there’. The landscape has its challenges but there are large returns to be made,” agrees Dr. Aditya Dev Sood, Founder, Center for Knowledge Societies, which recently came up with a report on the Tata-fication of Africa. And that’s the reason why every sane country or brand in the world is busy making plans for its Africa sojourn, if not already there. The most desperate of the lot seem to be the two Asian giants – China and India – who not only have flooded the continent with their wares but are also gearing up for a war which will result in the next colonisation of Africa, but this time in terms of brands. Jindal Steel, Kirloskar, TCS, Tata Motors, Aptech, Satyam, SBI, Bank of Baroda, Exim Bank, Ranbaxy, Cipla, HCL, NIIT, Dabur, Tata Coffee, BHEL, Tata Power, Suzlon, Essar, OVL, Havells India, Videocon, UB group… the brand list from India goes on and on! Even those who seemed to have lost their past glory in the continent because of the colonial preeminence are once again making strategic investments across the continent. For instance, Tata Motors was a well known truck brand in Africa well into the 1960s, when it was finally supplanted by European competitors (once the colonial powers in the continent). Now, the resurgent Tata Group has been making strategic investments in Africa to regain its supremacy. In fact, the Group wants to launch its much hyped people’s car – Nano – in Africa much before its official launch in India.

And that’s the case with every other Indian brand. While FMCG major Dabur has recently set up a new manufacturing facility in Nigeria with an investment of about $4 million, the $5-billion durables-to-oil Videocon Group is gung-ho over its African investment plans ranging from telecom to consumer durables to oil. The Exim Bank of India has recently (in March 2008) signed a MoU with African Export-Import Bank (Afreximbank) to extend a $30 million line of credit to finance Indian exports to Africa.

Says Pawan Goenka, President, Mahindra & Mahindra, “There are a couple of important markets like Africa on our radar. Though 95% of our sales come from India at present, but we will have a separate renewed strategy for these markets soon.” There are more examples of such Africa-fication by Indian brands. In fact, CII expects India’s exports to reach $500 billion by 2013, if the past growth trend continues.

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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