East, South Africa Primed for Investment
15 March 2011 Timing is everything in business and in life. We’ve all experienced successes fueled by circumstance and also felt the sting of regret for failing to capitalize on unique market conditions.
I’m reminded of this reality as I write in the opulent surroundings of a new luxury hotel in Shenzhen, China. Just 20 years ago, Shenzhen was a small fishing village known primarily as the gateway to Hong Kong.
Today it is a bustling city with skyscrapers, upscale shopping, chic hotels, prolific office buildings and excellent roads filled with as many luxury cars as taxis. Real estate here has been so steady and strong that many would tell you the time to buy has passed. If you didn’t capitalize on the boom times of the past decade, then you probably missed out on one of the world’s great opportunities.
Likewise, Shenzhen’s pesticide companies have grown five-fold in the same time span, fueled by China’s rising middle class and demand for more diverse foods that make China one of the fastest growing crop protection markets in the world. Many of these pesticides companies confess that competition is becoming fiercer each day. Like other good business markets, success leads to competition and eventually an overcrowded landscape.
So it begs the question: Where is the next Shenzhen? Where in the world is knowledge, demand, investment and market access coalescing into conditions that will make many companies rich and other envious of their vision? My bet is on East and Southern Africa.
Crop protection manufacturers have an opportunity to follow innovation and investment into Africa. Government investment into fertilizers and irrigation are paving the way to more sophisticated adoption of agronomic practices, including the use of crop protection strategies. Microfinancing is becoming more readily available, and distribution networks in the region are beginning to see their share of mega-retailers that are similar in size and scope to more developed countries.
Read the rest of this column in the April issue of FCI.
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