AFRICA

A new frontier for furniture Made in Italy

Africa is the new frontier for furniture Made in Italy

The Sub-Saharan region is a perfect example of that. The numbers (over 880 million people, 41% of which are 15 years old or younger, and the rising middle class) make it clear how interesting could be for Italian companies to invest on the medium and long period in the area.

Nowadays, the furniture market in the Sub-Saharan region is worth about 9,6 billion dollars (according to FederlegnoArredo), and covered for the 60% by local producers. Taking into consideration the 11 Countries which are considered most interesting by companies in the sector because of their economic and demographic growth (South Africa, Nigeria, Ivory Coast, Congo, Kenya, Ghana, Senegal, Ethiopia, Angola, Cameron and Tanzania), the total export value for Italian furniture producers has risen by 132,2% from 2009 to 2015, moving from 67 million to almost 158 million euros.

The best strategy in these markets is to invest regularly, through trust-worthy local partners, contract projects and retail, and by focusing on Countries which enjoy relative political, economic and service stability.
Contract in particular has seen a notable development in these emergent markets. Made in Italy product finds its place in the new residential complexes and high-hand hotels, or in HQs of multinational companies.

As for the Countries, South Africa is a bit unique, as its economic, social and cultural dynamics are nearer to those of European Countries. It is not a case that major design brands are already active there, with showrooms which act as hubs for the whole Continent, as many architectural firms and distributors active all over Africa are in the Country.



Northern Africa represents about one third of the real estate market in the Continent. In the area, Algeria is the first market. The furniture sector, in particular, is concentrated in the coastal region, where the majority of the Algerian population lives: the furniture market of the Country indeed profited from the ambitious construction plans for lodgment promoted by the government.

Nord Africa
Nord Africa
Nord Africa
Sudafrica

In Southern Africa, the well-developed furniture market in South Africa works a substantial role. The consumption of furniture in the Country estimated worth is far higher than 1 billion dollars. The import alone is worth about 800 million dollars, satisfying about 50% of the internal demand. The high-hand sector is a niche market mainly covered by luxury stores and architects. Some European companies have nonetheless preferred to operate directly through a showroom, like Bulthaup, Franke, Schmidt Kitchens, Roche Bobois, Ligne Roset, Minotti by Limeline.

Also Mozambico is worth considering, as it is rich in natural resources. Furniture market still presents limited dimensions (the main areas of interest are Maputo, Nampula and Beira, while Maxixe, Xaixai Quelimane and Tete come right after), the request for furniture and lodgements is most probably going to rise. The rapidly growing tourist sector is also pushing the demand for high-end furniture and finishing.

Even if Eastern Africa represents only little more than 10% of total furniture market in Africa, some of the economies in the area have seen relevant growth recently. The most relevant market for the furniture sector in the region is Kenya: national consumption is about 600 million dollars (production prices). Retail market is relatively underdeveloped and, by estimation, only 30% of the market is served through retailers. Some examples of retailers active in the market are Furniture Palace and Victoria Courts. Some companies are trying to widen their product offer to be more interesting, by adding foreign brands to their catalogues or extra services for the clients. With its similar characteristics, Tanzania presents a furniture market still underdeveloped, with a relevant growth potential on medium period.

Note-worthy is also Rwanda: the Country has recently shown economic growth accompanied by a substantial development in the quality of life and in the possibility to launch a business. Pro capita spending for furniture in Rwanda is still lower than the one of other Countries in the area, like Kenya. Yet, public investments, the strong expansion of the construction sector and the emergence and reinforcement of the middle class are promising engines for future demand.

Africa orientale


CONSTRUCTION

Lodgment, offices, shopping centres, infrastructures… it is sufficient to visit a couple of African cities to know that the Continent is one gigantic construction site. The rhythm of investments is fast and steady, for a number of reasons: quick urbanization, relevant economic growth of many States, emergence of the local middle class and regional projects for the integration. The hunger for development is so strong that many governments have planned for the construction of whole new cities (Tatu in Kenya, City of Light and King City in Ghana, Greater Port Harcourt and Eko Atlantic City in Nigeria).
Investments for infrastructures are essential to stimulate economic growth, while the development of new infrastructures proved to play a substantial role in supporting productivity and occupation on short term, while strengthening the basis for long term productivity and growth.
Investments in infrastructures are the cornerstone of economic development plans for all African Countries.

Ediliia in Africa
Edilizia in Africa
Edilizia in Africa


Investments in infrastructures are the cornerstone of economic development plans for all African Countries. South Africa, for example, has invested about 18% of its GDP in the last years on infrastructures. It has also recently introduced a plan for the reconstruction and economic upturn meant to create new jobs and to push economic growth though investments in infrastructures and support of networking industries. Many initiatives are already in action, as a state fund for infrastructures, which will supply an estimated 10.000 billion of Rand (about 6 billion dollars) in a period of 10 years. Even if it has modest capacity, the fund is expected to “pack the private sector with loans and competences to support the construction of infrastructures”.
The Country also foresees an acceleration in the infrastructural projects already under construction, as well as those only approved. For this reason, a Presidential office for investments and infrastructures has been put in place, which will focus on planning, coordinating and rapidly developing loanable opportunities.