India and China are vying for Africa because of the bottom line: Africa represents new growth.
“This is the last growth continent in the world. Europe is a done industry. The U.S. is a done industry. Southeast Asia is old,” said Sunil Mittal, founder and chairman of Bharti Airtel. “Our model is not suitable for a matured market. We need growth and Africa is the right place to grow.”
But India is now changing its relationship with Africa from the political, such as advocating an end to colonialism, to the economic. In recent years, some Indian companies have expanded their business in Africa, propelling what were once small operations into major players. New companies have also moved in. Among them are:
• In October 2008, Indian conglomerate Essar Group launched a mobile telephone company in Kenya, in its first investment in Africa. Since then, it has acquired mobile telephone companies in Uganda and the Republic of Congo.
Essar Oil, India’s second-biggest private oil firm, entered an agreement in 2009 to acquire 50 percent of Kenya Petroleum Refineries, which serves three countries in east and central Africa. Last year Essar won the bid to acquire a 60 percent share in the state-owned Zimbabwe Iron and Steel Co.
• In 2005, Karuturi Global, an Indian agriculture company, bought 15 hectares in Ethiopia to grow roses for export, an investment of about $1.9 million. Karuturi has since grown that investment to have 75 hectares of roses. In 2007, it bought one of the largest flower farms in Kenya, in a deal valued at about $65.5 million. In the past two years, Karuturi has acquired another 311,700 hectares in Ethiopia for an undisclosed amount of money.
• Indian drug companies Cipla and Ranbaxy have been a lifeline for years for millions of Africans who are HIV-positive, because they produce far cheaper generic anti-retroviral drugs than the branded drugs from European and American companies.
Ranbaxy, which moved into South Africa in 1996, now has 10 full-fledged subsidiaries or offices across Africa. This year, it is opening its second manufacturing facility in South Africa. Cipla also opened a new manufacturing facility in South Africa in September.