Early Entrants to Benefit from Significant Growth Opportunities in Sub Saharan African Biofuels Markets

CAPE TOWN, South Africa--The African biofuels industry is entering a period of extended growth. Despite various challenges and obstacles, in-depth understanding of current and future trading conditions will boost the chances of success and early entrants are positioned to make sizeable gains as these markets develop.

New analysis from Frost & Sullivan (http://www.chemicals.frost.com) Sub-Saharan African Biofuels Markets, finds that the market will earn revenues up to USD 1.54 billion in 2010 and estimates this to reach USD 1.82 billion in 2013.

“The African biofuels market is set for spectacular growth in a market where agricultural land and labour is in abundance and where government support will foster a protective market with guaranteed offset markets,” explains Frost & Sullivan Research Analyst Cornelis van der Waal. “Early market entry coupled with an extensive understanding of overall market dynamics as well as long-term feedstock provision agreements will lead to increased market share.”

Despite several potential hurdles, the probable return on investment will be substantial. While government strategy will have a significant impact on the industry, it will by no means be the only factor that will determine the future of the sector.

At present, biofuels production in Africa is limited. However, successful ethanol production is ongoing in several countries that are all currently finalising their biofuel strategies. A number of companies have already started investing in the biofuels market in Africa and early participants are expected to gain considerable benefit from early market entry.

“Many acres of jatropha have already been planted, intensive skills programmes are being set up and various international companies are investing in this ‘non-existent’ industry,” notes Mr. van der Waal. “Early market participants will not only have a significant advantage over future competitors but will also be able to shape the industry in their favour.”

The current market for biofuels in Africa is very ripe. However, sluggish government policy, fears centred around sustainable feedstock production and a general lack of skills in the African biofuels industry is restraining market expansion. In addition, the severe lack of capital to develop this market is hampering the objectives set under the Kyoto Protocol. Alternative technologies such as fuel cells are also putting a dampener on enthusiasm for investment.

“Although the African market as a whole and the South African market in particular hold tremendous potential, the slowness of governments to develop and implement policies is straining development,” observes Mr. van der Waal. “However, most strategies are expected to be completed by the end of 2007 and this will result in exponential growth and investment opportunities for local and foreign companies.”

If you are interested in a virtual brochure, which provides manufacturers, end users and other industry participants with an overview of the latest analysis of the Sub Saharan African Biofuels Markets, send an e-mail to Patrick Cairns, Corporate Communications, at patrick.cairns@frost.com with your full name, company name, title, telephone number, e-mail address, city, state and country. We will send you the information through e-mail upon receipt of the above information.

The Sub Saharan African Biofuels Markets is part of the Chemical and Materials Growth Partnership Service, which also includes research in the following markets: European Biofuels - Market and Opportunity Analysis, European Biodiesel and Feedstock Markets, Strategic Analysis of the Asia Pacific Biodiesel Industry and Latin American Biofuels Markets. All research included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants. Interviews with the press are available.

Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. The company's industry expertise integrates growth consulting, growth partnership services and corporate management training to identify and develop opportunities. Frost & Sullivan serves an extensive clientele that includes Global 1000 companies, emerging companies and the investment community by providing comprehensive industry coverage that reflects a unique global perspective and combines ongoing analysis of markets, technologies, econometrics and demographics. For more information, visit http://www.frost.com.

The Sub Saharan African Biofuels Markets

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