Indian companies are increasingly looking to the growing African markets, with plastic and resin manufacturing and processing companies in particular making investments in the continent. The most popular African business sector attracting FDI projects from Indian firms is manufacturing, with extraction and customer contact centres ranking second and third, respectively.
Africa has seen an increase in the number of new manufacturing projects announced by Indian companies over the past few years. According to greenfield investment monitor fDi Markets Africa recorded 26 new manufacturing projects from Indian companies in 2011, representing a 44% increase from 2010. Manufacturing was also the most popular business sector in terms of capital invested, with 109% increase in capital invested in 2011 compared to 2010. Almost 17,000 new manufacturing jobs were created in Africa by Indian FDI projects in 2011.
One reason for the increase in FDI is the expansion of the African middle class, which brings with it more purchasing power. Also, the increasing amount of capital being invested in sectors such as metals and communications brings large amounts of capital into Africa and has created many jobs.
There are still many challenges to operating a plastics processing business in Africa, however, including its poor infrastructure and logistics provisions.