Biofuels Markets in Sub-Saharan African Can Expect Rapid Growth, Finds Frost & Sullivan

CAPE TOWN, South Africa -

Despite serious challenges to its development, the sub-Saharan African biofuels market should experience rapid growth in the next five years. The high targets set by the European Union and the United States for the inclusion of biofuels in their fuel supply are a key driver for biofuels projects in the region. In addition, intensified government support for the market has helped attract increased investment into production.

(Logo: www.newscom.com/cgi-bin/prnh/20081117/FSLOGO)

New analysis from Frost & Sullivan (www.chemicals.frost.com), Sub-Saharan African Biofuels Market, estimates that the market will earn revenues of US$26.9 million in 2009 and projects this to reach US$229.9 million in 2017.

If you are interested in a virtual brochure, which provides a brief synopsis of the research and a table of contents, then send an e-mail to Patrick Cairns, Corporate Communications, at patrick.cairns@frost.com, with your full name, company name, title, telephone number, company e-mail address, company website, city, state and country. Upon receipt of the above information, a brief brochure will be sent to you by e-mail.

“Globally, growing awareness of environmental issues and finite energy sources has led to heightened investment into alternative and renewable energy,” notes Frost & Sullivan Research Analyst Kholofelo Maele. “Biofuels have received increased support in an effort to reduce greenhouse gas emissions and for their role in helping countries to achieve energy independence.”

Biofuels have the potential to reduce countries’ fuel import bills significantly and make the funds available for much-needed poverty alleviation and development. A large percentage of the population in Africa relies on agriculture for its livelihood. Growing energy crops could provide an income for subsistence and small-scale farmers and support rural development initiatives.

Promisingly, many countries in sub-Saharan Africa have suitable climates and available land to grow feedstock. However, delays in formulating and implementing the regulatory framework for biofuels production have been a major restraint for the development of the market. In addition, limited infrastructure in many countries remains a challenge for potential biofuels manufacturers.

“Legislating mandatory blending into a country’s fuel supply will create a secure market for biofuels,” states Maele. “However, the present uncertainty around policy has made investors hesitant about investing in this industry, which is still in its infancy.”

Despite these uncertainties, many foreign organisations and local commercial farmers have invested in land or have made agreements with out-growers for growing energy crops and setting up pilot production facilities. This is to ensure that production can begin once the regulations are in place.

In the absence of mandatory blending, manufacturers are looking to target other fuel end-users. These include commercial farmers, trucking and equipment companies, the export market and the local communities that have limited or no access to electricity.

Biodiesel manufacturers that target the local market will need to ensure that they develop and maintain good relationships with their customers. Ensuring that the product adheres to the necessary standards for use as a fuel is essential.

“For manufacturers targeting the export market, taking sustainability criteria into consideration will be critical to securing market access,” advises Maele. “African governments will need to take a proactive stance towards ensuring that the industry’s development is regulated to prevent the potential negative impact on food security and the environment.”

Sub-Saharan African Biofuels Market is part of the Chemicals & Materials Growth Partnership Services programme, which also includes research in the following markets: South African Fertiliser Chemicals Market and, Nigerian Chemicals Market. All research included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best in class positions in growth, innovation and leadership. The company’s Growth Partnership Service provides the CEO and the CEO’s Growth Team with disciplined research and best practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 35 offices on six continents. To join our Growth Partnership, please visit www.frost.com.

Sub-Saharan African Biofuels Market M441 Contact: Patrick Cairns Corporate Communications - Africa P: +27-18-468-2315 E: patrick.cairns@frost.com www.frost.com

Source: Frost & Sullivan

Patrick Cairns, Corporate Communications - Africa, Frost & Sullivan, +27-18-468-2315, patrick.cairns at frost.com / Photo: https://www.newscom.com/cgi-bin/prnh/20081117/FSLOGO