Africa is a continent of contrasts: While some countries are sinking into poverty and violence, others are taking off. Experts are already predicting that the African market will be one of the world’s fastest growing markets in a few years. With its 54 countries, around 1.3 billion inhabitants and rich raw material deposits, Africa holds immense potential. In some countries, gross domestic product (GDP) growth rates of between 6 and more than 11 per cent were achieved in 2019.
“Some African countries are now developing so fast that they are skipping whole stages of technological development. This makes entering this market a major challenge for LAPP. At the same time, we also benefit from the many opportunities that come with such diversity,” says Andreas Lapp, CEO of LAPP Holding AG. “For us, Africa is a sleeping giant. Over the long term, we see tremendous prospects for growth. We want to be a part of it.”
SMEs are underrepresented
German companies are underrepresented in Africa, especially small and medium-sized enterprises. For this reason, LAPP regards the framework agreement for creating the African Continental Free Trade Area (AfCFTA) very positively. The agreement was signed by 52 African member states and aims to create reliable conditions for trade and investment by German companies. Africa has long ceased being just a place for European outsourcing.
All signs point to growth
The demand for LAPP connection solutions is growing steadily: In the past financial year alone, LAPP was able to achieve up to 50 percent sales growth in some regions of Africa. Demand is particularly high in automation, the food industry and the energy sector (with the expansion of electricity grids and the use of renewable energies).
The latter area in particular represents a major market opportunity for LAPP. Sun and wind are both more or less ubiquitous on the continent. But in practice, many African regions are not yet connected to a power grid – 60 percent of Africans live without electricity. In most regions of the continent the sun shines more than 2,500 hours per year. The average solar radiation values are between 4.5 and 6.5 kilowatt hours per square metre on a single day. By comparison, in Germany, the average value is 1 kilowatt hour per square meter – only enough energy to burn an ordinary 100-watt light bulb for 10 hours.
This is why LAPP is pursuing the “Energy with Automation” strategy in Africa. On the one hand, it involves exploiting the great potential in industrial communication; on the other, it means gaining new end customers in the energy sector.
Expansion from west to east
LAPP has been active in South Africa with its own national subsidiary since 2010. From this location, the 30 employees serve seven countries in Southern Africa. At the end of the year, LAPP Southern Africa moved to a new location in Johannesburg. With 2,700 square metres of storage space, it is four times as large as the old location.
In north and west of Africa, sales have so far been handled by the Portuguese company LAPP Policabos. LAPP is supported here by sales partners and local staff in Morocco, Tunisia, Algeria, Egypt, Senegal, Ivory Coast, Ghana and Nigeria.
In order to boost its market opportunities, LAPP also maintains its own national subsidiary in West Africa. In the near future, LAPP will also expand in the east. Meanwhile, the network of partnerships and the digital presence are being continuously developed.
If you would like to find out what solutions we have to offer for your market, please do not hesitate to contact us.
Investment in education and training
Opportunities are also to be found in other areas. Locally, LAPP is experiencing sustainable growth, focusing on the qualification of its employees and offering secure jobs. LAPP takes responsibility – including in education.
Last autumn, the “Collège Andreas Lapp” was officially opened in Galebre, Ivory Coast. The initiative to establish the school goes back to Désiré Kope, who works at the LAPP Logistics and Service Centre in Ludwigsburg. For many years, he saved up to found a school in his home country. Thanks to the additional financial support of Andreas Lapp, he was able to make his dream a reality.
