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Dow Chemical Not Scared Of Bumps In The Road In Africa

Dow Chemical Not Scared Of Bumps In The Road In Africa

U.S.-based Dow Chemical has opened a hub in Kenya to serve East Africa, another in Ghana serving West Africa and it’s also opening offices in Ethiopia, Nigeria and Angola, among other African markets, Reuters reported.

The company, whose group sales reached $12.9 billion in the second quarter, said it plans to triple its revenue from sub-Saharan Africa by 2020 and is investing in offices, local staff and manufacturing plants on the continent to meet that target, its regional head said.

“Dow is absolutely betting on Africa’s growth,” said Ross McLean, president for sub-Saharan Africa, in a Reuters interview in Nairobi. “We expect to triple our revenue from Africa over the next five years. That is our objective and we are on track to do that.”

The U.S. multinational chemical corporation had sales in 2014 exceeding $58 billion, BusinessInsider reported.

The company’s revenue from sub-Saharan Africa grew by more than 10 percent annually over the past five years and 25 percent in 2014, McLean said in a June report in the DetroitNews.

Dow launched a dedicated polyurethane manufacturing plant in September in Durban as a hub for sub-Saharan Africa. It is based at the company’s existing acrylic coatings products plant and will manufacture tailor-made polyurethane materials for the region, BusinessDayLive reported.

The company makes agricultural chemicals and petrochemicals that go into plastics, cosmetics, electronics, and coatings.

The Durban plant will supply polyurethane products to Africa’s energy, construction, cold chain, furniture and bedding industries.

Dow had about 100 polyurethane customers in South Africa, said Jonathan Penrice, Dow vice-president for polyurethane solutions. Local production will cut down on lead times and help with issues involving product shelf life, he said.

The company is also investing in production plants in Egypt and Saudi Arabia.

Dow has opened offices in Ethiopia, Nigeria and Morocco since November and is in the process of setting one up in Angola, McLean reported in June. The company also has representatives in Kenya, Ghana and Algeria.

“If you roll back five or six years, we were only present in Egypt and South Africa,” McLean said at the World Economic Forum on Africa in Cape Town, DetroitNews reported. “We wanted to get closer to our markets and connect with our customers. We have been building foundations to get ready for a real growth take-off.”

Africa accounts for less than 3 percent of the U.S. company’s total sales, McLean said in June.

“Most multi-nationals that are driving a growth strategy in Africa are starting from a very low base, and currently they may be at 1 or 2 percent of the global revenue of the company,” he said at the World Economic Forum.

“We are here for the long term and we are not scared by the bumps in the road. Africa is a place where you have to be pretty resilient and determined,” McLean told Reuters.