South Africa is home to Africa’s most advanced and largest chemicals sector, valued at approximately US$25bn. It is estimated to be four times and thirteen times larger than the chemicals markets of Nigeria and Egypt, respectively. South Africa’s chemicals industry is highly mature and diverse, spanning fuel and plastics fabrication to pharmaceuticals, and supplies a wide range of industries.
According to the Chemical and Allied Industries Association, the sector provides input to 23% of the country’s total manufacturing gross value. In 2018, the chemicals (organic and inorganic chemicals, as well as plastics) sector exported close to U$4bn in products. Plastics accounted for 37%, inorganic chemicals for 35% and organic chemicals for 29% of the sector’s export earnings.
The sector is dominated by a few integrated, local and international manufacturing companies, of which the 20 largest account for close to 90% of the sector’s revenue.
South Africa has close to 10 billion tonnes of proven coal reserves, among the largest in the world. Given its leading expertise in coal-to-liquid technology, the country’s coal deposits present key inputs for the chemicals industry.
South Africa has also developed advanced capabilities for the production of emerging materials including advanced carbon materials. The world market for advanced carbon materials is expected to record a compounded annual growth rate (CAGR) of 11.5% between 2019 and 2024.
There is a rising demand for agro-chemicals in Africa. In order to keep up with population growth, agricultural output has to increase in Africa. The FAO and OECD expect agricultural output to grow by 2.6% per annum in the next decade, driving demand for agro-chemicals such as fertilisers and pesticides.
Think South Africa, Think Opportunity.
