Every investor is training their sights on Africa
M&G Africa: How long has ABB been operating in Africa?
Nthabiseng Dube: The Africa business has been there for some time, we are not new in Africa though in some instances due to certain environmental and political issues we have sometimes downscaled the business, and upscaled when conditions become amiable and warmer to business.
M&G Africa: In the kind of line of business you are in, and in a continent where power and demand are buzzwords, is it prudent to downscale, as you have done in some of your operations such as Zimbabwe?
ND: That is true but sometimes you find as business you need to balance risk, if the political environment is not conducive for business you are bound to weigh the risk and ask yourself, how do I support this market? Do I support it from outside, or do I have a representational office?
M&G Africa: In which areas are you seeing most growth?
ND: It depends on the country and what drives its economy. A greater percentage of our revenue comes from the power sector.
In South Africa the mining sector has been a good business, though if miners are not spending money on their capex then it goes down, and goes up when they need to upgrade their equipment or plant.
M&G Africa: Where do you see new opportunities in the continent?
ND: Africa is the focal point right now for the group. I think the power sector will grow over time, if you look at cross-border power infrastructure projects, and now there are renewables.
M&G Africa: I notice you also do robotics, is there a market for those in Africa?
ND: There is a market for robots in the motor industry.
Robotics is not a huge business globally for us. It forms a small percentage of what we do, but it is a strategic business for us. In Africa we hope it will grow, we cannot exit because it has meaningful input in what the group is doing. Robots play a role in industries where safety is a concern such as mining and smelting, or where there is a need for precision such as in the diamond industry.
M&G Africa: What can be done to increase access to power in Africa?
ND: There are lots of things that can be done. There’s been lots of talk about renewables for example. There’s a lot of room for governments and technology operators to have conversations about partnerships on rolling out infrastructure to increase access.
M&G Africa: Is there a trend towards renewables?
ND: I think it’s a mixed bag. There’s renewables, and we see fossils still being used, as the continent has lots of resources, so what we need to do is explore cleaner energy to exploit that and reduce our carbon emissions.
We’re headed there, we are still trying to understand what the mix looks like, but the will is there.
M&G Africa: There is this campaign in the West for investors to divest themselves from fossil fuels, will it have an impact on ABB?
ND: I don’t think that is going to happen overnight, it will be gradual. But while we still have the fossil deposits, I think it is worth looking at cleaner technologies in terms of utilising them. This will be the answer for some time, as renewables grow. ABB is a supplier, we cannot move things to another level on our own; we need to have partnerships with others.
M&G Africa: Is ABB hoping to tap the Power Africa plan?
ND: Once it starts rolling out, yes, ABB will support the renewable space that the plan is anchored in.
M&G Africa: What challenges have you come across while operating on the continent?
ND: They are not unique challenges, in term of issues of skills to execute certain projects, or issues of the non-conducive business environment such as restrictive regulations; it’s a mixed bag as the Ease of Doing Business index shows.
Financing is also a concern: for us to participate in a project there needs to be funders, and also the safety environment has to be right for our workers. We take that very seriously.
M&G Africa: Where do you see Africa’s power situation in the next 10 years?
ND: I think there has been a lot of inroads as far as the energy sector is concerned on the continent. There is still a lot that can be done, and it can definitely grow beyond this and the momentum will increase, as everyone focuses on Africa being the next growth area for business.
ABB remains keen on growing our business in Africa, and we take pride in having been on the continent for a long time, and growing our efforts to do business here.