IMPERIAL Logistics, a global leader in logistics and supply chain management has acquired international, cross border transporter IJ Snyman Transport, an established carrier that operates in Angola, DRC, Namibia, South Africa and Zambia. Known for cross-border delivery efficiencies, Snyman strengthens the Group’s African presence and capacity.
With a ten year track record, IJ Snyman Transport is a trusted Logistics Service Provider (LSP) to leading retail, FMCG and construction brands. Through its established Southern African and International divisions, IMPERIAL Logistics’ service delivery comprises fundamental logistics and end-to-end supply chain management solutions to blue chip customers in almost every industry.
“With a growing middle class, increasing urbanisation and technological access as well as untapped resources and agricultural potential, development of Africa’s supply chain is imperative for sustainable growth,” said Marius Swanepoel, IMPERIAL Logistics CEO. Through its Africa division, it is rapidly expanding across the continent, particularly as customers enter new markets.
“We are honoured to become part of a global logistics and supply chain management leader. Our customers stand to gain significant competitive advantages through the acquisition,” said Sakkie Snyman, Managing Director at IJ Snyman Transport, adding that investment in the continent by African companies is essential to boost critical intra-African trade.
“Expansion throughout Africa is an exciting growth area for us,” said Swanepoel, referring to September data published by the Africa Business Confidence Index (ABCI) which points to promising prospects for the manufacturing and non-manufacturing business sectors. Supply chain failure, he noted has a significant impact on the health of any economy.
Source: CII – Logictics
Nigeria has been ranked as one of the four major investment destinations and growth areas in the world.
According to KPMG, one of the world’s foremost audit, financial and tax advisory firms, Nigeria’s newfound status followed the disappointing returns recorded by the BRICS, with the exception of China.
BRIC was the term coined by Goldman Sachs’ economist, Jim O’Neill in 2001, to symbolise the emerging global economic powerhouses of Brazil, Russia, India and China. The term was later expanded to BRICS to accommodate South Africa.
However, KPMG at the weekend, said the poor regulatory environment, slower than expected growth prospects and disappointment returns on investment recorded by the BRICS, with the exception of China, has worked in the favour of Mexico, Indonesia, Nigeria and Turkey which have been termed the MINTs, as well as the ASEAN (Association of South East Asian Nations) region, now considered the new destinations for global capital and investors.
Global Chairman, KPMG International, Mr. Michael Andrew, who was on his first visit to the country last week, told reporters in Lagos that Nigeria and the other countries among the MINTs have attracted increasing investment offers and enquiries through the services of KPMG, amongst others investment and financial advisories, with the view of taking advantage of the high rates of return on investment.
According to him, with the exception of China, international investors have found the Brazilian, Russian, Indian and South African economies disappointing in the last few years and are looking for safe havens with better returns for their investments.
“The offers for the MINTs are intense and we are getting a huge amount of enquiries about these countries. People want to know how to do business in these countries, how to access the markets and how to take advantage of the long-term growth that is coming.
“If you are a CEO and you are sitting in London, New York or Frankfurt, because the market is growing and the cash inflow to these markets, the markets are putting pressure on the CEOs to try and find new markets where they can find growth.
“Particularly, companies in consumer markets such as financial services, food and energy are the ones that they are really focused on in these emerging economies,” he said.
Andrew, who spoke alongside the National Senior Partner, KPMG Professional Services, Mr. Seyi Bickersteth, and Partner, Management Consulting, KPMG Professional Services, Joseph Tegbe, said the international investors are interested in investing in the Nigerian capital market and could later move to the real and other sectors of the economy.
He said: “Initially they are going to move into the stock market, then they will move into the property market, then they will start to move into the real sector in economies such as Nigeria.
“So everyone is watching where this cash goes, but the real question is what are the factors that will actually drive this growth?”
Elaborating on the determining factors, Andrew said: “People are looking for a growing middle class, they are looking for a predictable regulatory environment, and they are looking for stable and transparent corporate governance structures.
“In the last few weeks, I have been to Mexico, Indonesia, India and then Nigeria, and their similarities are remarkable – between those economies and this one are the ones attracting a lot of interest.
“In the last few years, we have talked about the BRICS being the area of focus. But if you talk to international investors, their views will be that the BRICS, with the exception of China, have been quite disappointing.
“So they have found it difficult to invest in these countries, their regulatory environment is unpredictable and they have not been able to get good returns on their investments.
“As such, people are now focused on the MINTs – Mexico, Indonesia, Nigeria and Turkey. They are the four countries that international investors are really focused on for growth and investment.”
Bickersteth while fielding questions on the power reform and recent sale of successor companies of Power Holding Companies of Nigeria (PHCN), gave a pass mark to the Federal Government on the exercise.
He said: “The process is being handled by someone for whom I have a lot of respect for – Mr. Atedo Peterside. The process has been very transparent.
“However, you are not going to satisfy everybody in this particular deal, so my own opinion is that we must move forward. We need to move forward because if we don’t we are going to have a real problem in the power sector.”
Stressing that it has been shown quite clearly that the public sector cannot deliver the amount of electricity that the country needs to form the industrial base in the country, he observed that Nigeria needs the resources and the expertise of the private sector.
“On the overall basis, the power reform programme is something that I welcome; the process has been fair and the valuation, from what I understand, has been fair. So let’s move on and deliver the power objective that we say we want to deliver,” he submitted.
Africa has witnessed a significant surge in private equity investments over the past five years. The remarkable resilience shown by the economies in the face of global economic uncertainties have added great impetus.
This is coupled with the number of new funds raised according to Ernst & Young’s Private Equity Roundup report.
The private equity landscape in Africa is changing. Many of the PE firms view the continent in a positive light. Africa has not only shown resilience in economic growth but has seen increased political stability; improvements in legal, regulatory and business environment.
In recent years economic growth rates have been well in excess of those in developed economies and above those in many emerging markets.
A decade ago it was dominated by a handful of players from South Africa and Pan-African PE firms largely managed out of the US and the UK. Five years ago the number of PE firms had increased significantly, as did the number of new funds raised. Between 2006 and 2012, 81 PE funds that were focused on Africa closed.
Through the end of 2012, 45 Africa-focused funds were on the road targeting approximately $12bn. Despite a difficult 2012, the long-term outlook for fund-raising for the region remains strong.
With increasing confidence in African markets, PE firms are diversifying their geographical focus outside the more advanced economy of South Africa to other African countries such as Kenya, Nigeria, Ghana, and Ethiopia.
PE has, however, yet to achieve significant penetration into the Sub-Saharan region relative to developed economies and other emerging markets. Individual countries such as South Africa and Nigeria are coming closer to other emerging market penetration levels.
As a percentage of GDP, PE now represents 0.12 per cent in South Africa compared with 0.10 per cent in Brazil, 0.14 per cent in China, 0.33 per cent in India, 0.08 per cent in Russia, 0.75 per cent in the UK, and 0.98 per cent in the US, according to Ernst & Young.
Kenya, Ghana, Ethiopia, Uganda, Tanzania, Zambia and Angola have fairly sizable economies that are less penetrated by PE and are therefore becoming increasingly attractive.
Smaller investments characterise the African PE landscape, especially outside South Africa. The low average ticket size can be partly explained by the nascent stage of the African PE industry.
PE firms willing to invest in the region can benefit from first-mover advantages by paying lower entry multiples than in other emerging markets.
Africa has a large number of private companies — many of which require growth capital funding.
However, the continent is significantly underpenetrated in terms of bank credit. Although economies such as South Africa and Egypt have more developed financial markets where credit is readily available, countries such as Kenya, Nigeria, and Ghana still lag behind the emerging markets of China, India, and Vietnam in terms of domestic credit provided by the banking sector as a share of GDP.
Low ratios in a fast-growth GDP environment generally result in those ratios rising quite quickly. Angola, for example, has seen the bank-credit-to-private-sector ratio rise from about 0.15 to 0.30 in the space of four years — demonstrating the huge growth potential for banking and capital markets as a PE investment focus.
The limited availability of capital from banks and public markets in most African countries means that private companies find it challenging to obtain the necessary capital to grow.
Although access to capital has improved over the last few years, there are significant capital needs that PE can provide to support the growth of SMEs.
PE investors can therefore act as key enablers, bridging the funding gap that is crucial for a growing private sector and broad-based economic growth across the continent.
A large proportion of Africa’s future growth is expected to come from its consumers. Total consumer spending is estimated to increase from $860bn in 2008 to $1.4tr by 2020.
Reforms
Even though there have been a number of PE investments in the consumer products sector, small deal sizes have meant that the aggregate value of investments in the last five years was only $784m. PEs’ largest benefit from consumer growth has come in its investments in African banking.
PE firms have committed nearly $2 billion to 57 deals in the financial services sector in the last five years and interest in this important sector is expected to continue.
With reform across Africa and rising incomes, banking assets in 16 key African countries are forecast to expand by 178 per cent to $980bn by 2020, with deposits forecast to grow by 188 per cent to $766bn.
Exit activity in Africa has been relatively flat between 2010 and 2012, averaging around 15 exits per year over the period. The most common exit route for PE firms from deals in Africa is via sale to strategic buyers, usually to local or regional buyers.
As the PE industry in Africa matures, there will be a greater number of exits to other PE firms and to a lesser extent also to IPOs.
PE investors should continue to see opportunities. In particular, we foresee Kenya, Ghana, and Ethiopia becoming more interesting although Nigeria and S Africa are expected to continue receiving the most PE investment.
– Business Daily
Vedanta Group firm Sesa Goa on Friday said it has acquired remaining 49 per cent stake in Liberia’s Western Clusters project for USD 33.5 million (about Rs 185 crore). “Sesa Goa has acquired the remaining 49 per cent of the outstanding common shares of Western Cluster Ltd (WSL) from Elenilto Minerals & Mining LLC Delaware, for a cash consideration of USD 33.5 million,” the company said.
Post this transaction, Sesa’s shareholding in WCL rose to 100 per cent. The company had acquired 51 per cent stake in WCL for about USD 90 million (about Rs 411 crore) last year. “WCL is a logical and strategic fit with Seas’s existing iron ore business and is expected to create significant long-term value for all stakeholders,” the company said in the filing to the Bombay Stock Exchange. It added that at WCL, exploration activities are progressing well, with over 42,000 meters of drilling completed till November 30, 2012. The project is on track for first shipment in FY14, it said.
Last month, the company had said it will finalise the capital expenditure plan for first phase of its Liberia iron ore mining project by January.
The company is aiming to produce 10 million tonnes of iron ore per annum in the first phase from WCL.
Sesa Goa’s Managing Director P K Mukherjee last month had said the company completed over 31,000 metres of drilling at the project site and first shipment from the project will be delivered in 2013-13 as announced earlier.
On the back of higher than estimated iron ore reserves of 1 billion tonnes, the Goa-based miner also has plans to ramp up the production by up to 30 MT in the second phase, which is expected to begin by 2016-17.
The company had begun exploration of the asset during April-May and had said that it would be spending about Rs 400-450 crore on the project this year. The investments would be made largely on payments to the local government, exploration, equipment and other related studies for the project. During the last quarter, the iron ore miner’s net sales, at Rs 294 crore, had gone down sharply due to host of reasons, including a ban on mining in Goa and slump in iron ore prices. However, it had reported a better than expected net profit at Rs 522 crore, largely due to Rs 464.63 crore profit for its 20 per cent holding in associate firm, Cairn India. At 1500 hours, Seas Goa shares were trading at Rs 195.25, down 2.06 per cent from their previous close on BSE.
Source: BS
Private equity funds quadrupled their investment in India’s primary healthcare, betting the sick and ailing will stop seeing family doctors in often cramped and dingy quarters and check into modern chains sprouting up across Asia’s No.3 economy.
Goldman Sachs Group, Warburg Pincus LLC, Sequoia Capital and the Government of Singapore Investment Corp are among investors that pumped $520 million into India’s basic healthcare industry this year, compared with $137 million in 2011, according to Thomson Reuters data. Some analysts predict investment will surpass $1 billion in 2013.
Organised healthcare providers including Apollo Hospitals Enterprise Ltd and Fortis Healthcare Ltd are betting that growing numbers of patients will be willing to pay two or three times more for better-equipped clinics – all under a model that can be replicated fast and offers investors the potential for quick returns.
“The family doctor concept is slowly phasing out as migrants in cities look out for a brand rather than visiting a general physician next door,” said Santanu Chattopadhyay, CEO of NationWide Primary Healthcare Services, in which U.S.-based Norwest Venture Partners has invested $4.6 million.
The opportunity is vast: India’s unorganised primary healthcare system is worth $30 billion and is growing at least 25 percent a year. The challenge will be convincing the sick to give up their trusted family doctors.
The country’s primary healthcare sector will draw at least $1 billion annually in private equity investment over the next couple of years, said Shantanu Deb Mookerjea, executive director at Mumbai-based advisory firm LSI Financial Services.
“Single-speciality chains and diagnostic laboratories will be the game changer,” he said, adding that they are easy to set up and expand to suit demand.
Another attraction is that primary healthcare providers such as outpatient clinics and diagnostic centres are not capital-intensive, so investors don’t have to write out big cheques. Also, unlike many restrictive Indian industries, from insurance to real estate and telecoms, there are no limits on foreign ownership in healthcare.
Think like restaurants
Health care, like restaurant chains, is a play on rising spending power in India, although valuations tend to be lower than the retail sector. Investors pay single-digit multiples on price-to-earnings in primary healthcare, compared with 15 to 18 for food and other consumer chains.
Valuations could improve if private healthcare operators also adopted a restaurant franchise model.
Under such a model, a healthcare operator would allow a franchisee to use its brand and 4provide expertise and support in exchange for a fee. The franchisor would avoid forking out money to set up new clinics – investments that will be borne by the franchisee.
“We would prefer to value our company based on our franchisee consumer model like a pizza (chain) rather than as a pill made by a drugmaker,” said Atul Bhide, director of finance at Mumbai-based Vaidya Sane Ayurved Laboratories, which operates 160 clinics providing traditional ayurvedic treatment.
As a result, healthcare has been a rare bright spot for private equity in India, where overall investment fell 17 percent this year to about to $3.3 billion.
“From small hospital chains and specialised treatment facilities, we are witnessing increased institutionalised activity, which could attract a lot of institutional investment interest,” said Vishakha Mulye, CEO of ICICI Venture, the private equity arm of ICICI Bank Ltd.
Last year, Mulye’s fund sold its stake in diagnostic chain Metropolis Healthcare to Warburg Pincus for 3.92 billion rupees, a 10-fold return on its 350-million-rupee investment in 2006.
Convincing patients
The biggest challenge will be convincing patients such as Chandrashekhar Khandke, a 30-year-old software professional at IBM in Pune, who said he has visited modern clinics a few times but still prefers his family doctor.
“If I buy grains from a grocery store or from a supermarket, it doesn’t make much of a difference but when it comes to health, a family doctor matters a lot,” he said.
Overcoming the draw of a trusted doctor may prove harder than it seems, even in a country where healthcare infrastructure is poor, electronic medical records are rare, and the quality of doctors and other medical professionals is patchy. “Although branded clinics have potential, they find it tough to pull patients from a strong local doctor. Also, if there is a big hospital in the vicinity, then they lose out on patients,” said Deepak Malik, analyst at Mumbai-based brokerage Emkay Global Financial Services Ltd.
While fees at modern clinics range from 150 to 600 rupees for treatment of routine illness, sole general practitioners charge patients anything between 50 and 300 rupees per visit.
“While these chains have a unique brand, a trusted doctor is even a bigger brand,” said Anil Advani, a doctor who operates an old but modest 800-square-foot (75-square-metre) clinic in Thane, outside Mumbai.
Source: BS
Bryce Roberts, the cofounder of O’Reilly AlphaTech Ventures, says startup pitches have never been worse than they are right now. “In all of my 11 years as a VC, I’d argue we’re at the low watermark for startup pitches,” he writes in a post titled “The Sad State of the Startup Pitch.”
Roberts says that most founders are coming without any sort of presentation in hand—no slides, no executive summary, no planned product demo. Demos usually consist of pulling up the website and poking around with no plan or direction.
When asked what they need from investors, founders have told Roberts they need “speed” — speedy decisions that will let the founders get back to work on the products.
“Here’s an idea, if raising money is such a bother than build products that don’t require you to do it,” Roberts writes.
“If you’re going to take the time to track down investors, create a slot on your busy calendar to meet and drive all the way across town to do so: bring it. Bring it every single time.”
What’s worse than bad pitches? Bad pitches from boring startups. And there are a lot of boring startups right now.
Source – Business Insider
Manipal University and the University of Nottingham began a two-day workshop on teaching partnership in Delhi.
The objectives of the two-day workshop on ‘UK-India Teaching Partnership Development Forum’ are to foster relationships between universities of India and the UK, and to promote joint and dual degree programmes.
Another objective is to facilitate collaborative research.
Over 150 delegates consisting of vice-chancellors, heads of institutions and researchers from India and the UK are attending the workshop, it said.
Welcoming the gathering, Prof Christine Ennew, Pro Vice-Chancellor of the University of Nottingham, stressed the need for fostering partnerships by bringing together universities from both the countries.
Speaking on the occasion, Dr Vinod Bhat, Pro Vice-Chancellor of Manipal University, said that India is witnessing a sea change in higher education.
“While some reforms have already been ushered in, we are awaiting the enactment of a few more bills, especially those related to National Council on Higher Education and Research, entry of Foreign Universities and amendments to UGC Act for deemed universities,” he said.
Dr Samir Brahmachari, Director General of Council for Scientific and Industrial Research, and Dr Rob Lynes, Director of British Council in India, spoke on the occasion, the release added.
Despite the recent flip-flops over enhancement of FDI cap in the retail sector, India has emerged as the fifth most favorable destination for international retailers, outpacing UAE, Russia, Indonesia and Saudi Arabia.
“India remains a high potential market with accelerated retail growth of 15-20% expected over the next five years. Growth is supported by strong macro economic conditions, including a 6-7% rise in GDP, higher disposable incomes, and rapid urbanization,” said a recent report by global management consultancy firm A T Kearney.
The approval of 100% FDI in single brand retail, especially, will give a fillip to the sector in the country prompting several international retail chains to explore the market either on their own or through local partners, the report said.
Companies such as GAP, IKEA, Abercrombie & Fitch have already stepped up inquiries for an entry into the market, despite the rider of 30% local sourcing for single brand foreign retail chains.
According to the entity’s Global Retail Development Index (GRDI) 2012, India ranks fifth after Brazil, Chile, China and Uruguay.
With the developed markets witnessing an economic turmoil, emerging countries are fast becoming the retail hotspot for foreign brands, with most of them seeing faster growth here compared to their home markets.
In the past five years, retail chain giants like Walmart, Tesco, Metro Group, saw revenues in developing countries grow 2.5 times faster than their home markets, the report said.
Even in the food and beverage industry, India is fast becoming an important investment destination for foreign players with companies like Starbucks which is planning to enter India this year and American brand Dunkin’ Donuts which recently entered the country in partnership with local franchisee Jubilant FoodWorks.
Many entrepreneurs underestimate how the fund raising process works and what it demands from entrepreneurs.
Cold calling or mass emailing to VCs doesn’t work. The deals that really get attention are the ones that come from high-quality individuals that VCs trust. Association with a promising company by a high-quality individual serves as a great filter for VCs.
Also entrepreneurs should recognize what they are good at and where they need help, especially the first time entrepreneurs. The ones who have successfully raised capital in the past and have great reputation with the investors find it easy to go direct on their own.
Even in those cases, the subsequent business ideas are different from the last ones that entrepreneur pulled off and hence the same investor network doesn’t work in most cases. One should be smart about it as a businessman. Don’t hang on to the thin slice of a small pie but rather focus on who can help you grow the pie multifold.
With more than 70 clients, including eight of the top 10 bulge bracket investment banks, and revenues topping $50 million annually, London-based research outsourcing firm Copal Partners could have easily succeeded in a public listing.
Instead, Chief Executive Officer Rishi Khosla recently decided to partner with one of its clients, Moody’s Corp., by selling over 50 percent of the company to the New York–based financial ratings agency. Khosla describes the share sale as an upgrade in Copal’s brand recognition. “Moodys is a global brand,” Khosla says, refusing to divulge the sale price or Moody’s exact shareholding after the sale, which was a pure cash transaction and occurred in mid-November. “We see this as a very positive move for Copal. Our clients see this as very positive move.”
Moody’s executives weren’t available for comment, but the deal puts Copal at the forefront of helping Moody’s to strengthen its Moody’s Analytics services, according to a company press release, especially in helping institutional clients better manage risk. “Copal is highly regarded in the global financial services industry as a leader in high-quality research and analytical services for bankers, financial analysts and institutional investors,” the president of Moody’s Analytics, Mark Almeida, said in a statement.
The acquisition complements the broad array of research, data, software and education services offered by Moody’s Analytics, the company says. Michael Adler, a New York–based spokesman for Moody’s, also refused to divulge the transaction price.
With expertise in a wide range of disciplines, including financial modeling, industry and company research, capital structure analysis and market surveys, Copal deploys a flexible staffing model to meet the specific requirements of its customers, according to Moody’s.
Copal, which employs 1,300 people, including many analysts in offices in New York, London, Dubai, Beijing, New Delhi, Hong Kong and Buenos Aires, made a name for itself in the financial research industry. In October 2010, Groupe Société Generale surprised the markets by announcing that it was handing equity analysis of 200 global companies for its private wealth clients to Copal, substantially strengthening the capabilities of its team of 10 in-house analysts.
The reports, which were co-branded as reports by Société Generale and Copal Partners, was a coup for Copal: It’s the first time that its reports were no longer produced under the name of a client and also a first in the financial industry in which a global investment bank marketed outsourced equity reports.
Founded in 2002, Copal has grown rapidly in the past few years at a time when major financial institutions laid off analysts by the thousands and trimmed back to cut costs in the aftermath of the global financial crisis.
Moody’s purchase of a majority stake in Copal dilutes the shares of Bank of America Merrill Lynch, Citigroup and Deutsche Bank, three major clients who also were shareholders, from a collective 20 percent to less than 10 percent.
Copal’s chairman is Andrew Melnick, who from 2002 to 2004 was co-director of the global investment research at Goldman Sachs and prior to joining Goldman was director of global securities and economics research at Merrill Lynch & Co.
Copal sits at the higher value-added end of the financial outsourcing industry, which research firm Celent estimates to be worth in excess of $7 billion in revenues in 2010 and consists of 50 to 60 firms, many of which are based India and provide traditional back-office outsourcing services to global financiers. Copal is among a handful that specializes in helping clients conduct the entire range of investment research, from time-intensive data mining and analytics all the way to penning entire reports under the guidance of a lead analyst at a client firm.
Logic Advisors 