The African manufacturing sector has seen fractured growth over the past two years thanks to the complexities of the pandemic and its subsequent economic disruption.
This is due to limited resources, impacted supply chains and the limitations of lockdowns, globally.
In South Africa, manufacturing production saw a sharp decline month on month in 2021, in Kenya, manufacturing saw a fifth-year dip in GDP contribution, Nigeria saw a decline of 8.78% in 2020, and Ethiopia has had to manage its manufacturing issues within a challenging environment. It has become critical to find solutions that allow for manufacturing in Africa to increase efficiency, reduce costs and optimise operations.
In markets such as Kenya and South Africa, price stability remains an issue while market saturation is a challenge in other markets such as Cote d’Ivoire. Years of stagnant growth need to be overcome while an unnecessary reliance on imports needs to be set aside in favour of local companies and products. The pandemic did do many manufacturing companies one favour – it limited access to imports, allowing local companies to flourish.
The past few months have seen the manufacturing sector rebound with countries reporting steady and impressive gains in growth, output and market activity. From South Africa to Kenya, the sector is experiencing a much-needed revival. To fully realise the potential of this shift, the sector needs to invest in solutions that will allow for it to further refine operations and infrastructure while maximising efficiency and return on investment. This is the perfect time to take advantage of the surge in growth across the continent and use it to leverage technologies and platforms that will translate into sustainable cost savings and further growth in the future.
One area where companies are focusing their cost reduction efforts is energy. This has always been a hefty weight for the sector, with the cost of powering plants and facilities often prohibitive within the restrictive limits of local power production and the limited access to resources from rural environments. The highly intensive energy consumption required by the sector makes it imperative for companies to move production towards more cost and energy-efficient methods using sustainable, accessible and more customisable energy sources. Modular solutions such as solar, micro grids, virtual gas pipelines, captive power plants and renewable energy implementations are becoming increasingly popular and relevant for manufacturing organisations wanting reliable power in line with the Sustainable Development Goals, such as affordable, clean energy, responsible consumption and production, and climate action without compromising on accessibility and scale.
This focus on better, more efficient, energy also does more than just tick the box of cutting costs – the World Bank believes that this is equally a way of ‘expanding the production of goods and services by energy investment to translate functionality and capability into growth and expansion.
Companies that are willing to innovate and invest are those that are far more likely to thrive as markets become increasingly competitive, as evidenced by recent shifts in investment and expansion within the cement sector, with several public announcements by cement manufacturers around expanding to meet growing demand. New cement and concrete projects are in the pipeline across the continent, many leveraging public-private partnerships (PPP) between government and the private sector to consolidate efforts and increase capacity. Large enterprises are using their time and resources intelligently to gain ground and build solid foundations from which they can extend their reach into new countries and markets.
From cement to food and beverages to metal production and processing, manufacturing organisations are looking for sustainable energy solutions to help them refine their costs and efficiencies so they can better compete on the local and global stages. Energy provision is now being pulled from mini-grid installations, solar plants, gas plants, wind energy, and rental. The latter becoming increasingly popular as organisations recognise the value of a trusted third-party service provider over having to manage, maintain and install their energy solutions on their own.
Using a supplier that provides the right technologies to remote, rural and high-demand environments allows for the organisation to enhance power production while minimising the administration and cost impact. Leveraging energy-efficient, environmentally friendly and sustainable systems that bypass reliance on diesel and instead introduce hybrid offerings that combine gas, LNG, solar, and diesel means that companies can build stable and reliable energy platforms that not only reduce costs but also risks.
Aggreko has a proven track record in providing manufacturing and mining organisations with trusted energy resilient solutions. The company collaborated with a car manufacturing plant in South Africa that was expanding its paint shop and required additional temperature control for paint cooling, particularly during the hot summer months. The complexity added by an automatically controlled bypass caused flow issues with the cooling equipment and the right level of cooling was required to enable them to make use of the expansion to increase production.
Aggreko’s engineering experts and temperature control technicians designed and implemented the ideal solution to precisely control the temperature to the specifications they required. This is just one of the modular and intelligent approaches Aggreko offers to organisations – allowing them to combine power solutions across rented backup, renewable, microgrids, virtual pipelines and so much more to create sustainable energy systems that are trusted and capable.
This smart collection of solutions fits perfectly within the needs of a sector that’s in the right position to take advantage of alternative energy platforms so they can de-risk, transform and drive growth, sustainably.
The writer, Sibongile Thobakgale is the area sales manager for South Africa at Aggreko Africa.