for the future children of Africa
Four Business Domains for the Future
Toyota Tsusho is promoting carbon neutrality throughout the company in order to deliver a better global environment to the children of the future. With the key message of “for the future children of Africa” for our business in Africa, we will promote value-creating businesses that go beyond solving social issues and look towards the future.
There are four specific key business domains that will be focused on going forward.
The Attractiveness of Africa, a Big Future Market
Africa is a continent made up of 54 countries that is overflowing with potential and future.
The numbers show why it is also referred to as the “greatest frontier of the 21st century.”
Looking at population, the world’s population was approximately 7.9 billion in 2021, and the population of all of Africa was approximately 1.3 billion. This number and ratio will continue to increase. According to estimates by the United Nations, the world’s population will grow to approximately 9.7 billion in 2050, and the population of Africa will be approximately 2.5 billion. A quarter of the world’s population is expected to be African.*
A unique aspect of Africa’s population is that it has a younger population than other regions. Fertility rates in Africa are increasing, and according to UNICEF, the number of newborn babies born in Africa is expected to reach 2 billion by 2050. While more and more countries will have more than a quarter of their total national populations over the age of 60, especially developed countries, Africa will have a growing population of young people. It is expected that 40% of the world’s children under the age of five will be born on the continent of Africa by 2050.
Young people are a source of potential growth. The more young people there are, the more they boost consumption and production capacity. From this perspective, it is obvious that Africa is an attractive frontier both in terms of production capacity and consumption.
From an economic perspective, GDP growth in 2022 is expected to exceed 5% in African countries such as Cote d’Ivoire, Kenya, and Ghana compared to a global average of 3.6%. In addition, growth is expected to be boosted by the leap-frog phenomenon*. Investment from outside the continent of Africa as well as investment in local startups is also increasing.
- *a phenomenon that occurs when leading-edge technologies are introduced to developing country and they rapidly evolve, spread, and develop at once without the typical step-based evolution.
An open international conference with the theme of self-sustaining, high-quality growth in Africa
The African Development Conference (TICAD*) is the core of Japan’s efforts to promote growth in Africa. The Japanese government has been hosting conferences with the theme of African development since the Tokyo Declaration on African Development in 1993. TICAD is unique in that it is promoted by both the public and private sectors, with participation not only by Japan and African countries but also the United Nations, the United Nations Development Programme (UNDP), the World Bank and other international organizations. Toyota Tsusho Group, a leader on business in Africa, is also participating, contributing to the growth of Africa through ownership by African countries and partnerships with the international community.
- *TICAD is short for Tokyo International Conference on African Development.
This year’s TICAD8 will be held in Tunisia in August 2022. It is the second time that TICAD will be held in Africa since TICAD6 (held in Kenya) in 2016.
Path Leading to Business Development in all 54 African Countries
Toyota Tsusho Group has actively participated in TICAD and other international initiatives. In addition, we have participated in building deep ties to Africa through our business even prior to this.
This history dates back to 1922. Toyota Tsusho (formerly Tomen Corporation)’s first business in Africa was the importation of raw cotton from Uganda. Afterwards, in the 1960s, when motorization was flourishing in Japan, we began exporting finished Japanese cars as our automotive business in Africa. We expanded our automotive business value chain, including local sales of finished and used cars as well as sales finance, primarily in East and South Africa. In addition, we began power plant construction project and local production and sales of blended fertilizer, steadily raising our presence in Africa.
A major turning point in our business expansion came in 2012 when Toyota Tsusho took a stake in CFAO. CFAO was France’s largest trading company at the time, conducting business in Africa since 1852. With the demand for African agricultural products increasing following the Industrial Revolution, CFAO’s predecessor Établissements Verminck was founded, and it expanded its business from West to North Africa with a focus on trading. In 1913, CFAO became the first company in Africa to engage in the Ford automobile sales business. In 1996, it acquired Eurapharma, which forms the base of Toyota Tsusho’s current healthcare business, expanding its operations in Africa.
In 2016, CFAO, which is strong in Central Africa and West Africa where French is spoken, and Toyota Tsusho, which is strong in East Africa and Southern Africa where English is spoken, became ONE Team that is developing our business in 54 African countries.
Further Strengthening Relationships Through a Milestone Year
2022 is the year of TICAD, the 100th anniversary of the start of Toyota Tsusho’s business in Africa, the 170th anniversary of the start of CFAO’s business in Africa, and the 10th anniversary of Toyota Tsusho’s capital participation in CFAO, making it a major milestone year.
The Africa Division was established internally in 2017 and strategy in Africa is one of the Toyota Tsusho Group’s growth strategies. “WITH AFRICA FOR AFRICA” is the philosophy for our business in Africa and the four major business domains are mobility, healthcare, consumer, and energy, infrastructure and technology. In addition, in 2019 the Toyota Motor Corporation’s sales operations in Africa were transferred to Toyota Tsusho. We are leveraging the presence and network we have built in Africa and continuing to contribute to regional development and the growth of the African automotive market as a member of the Toyota Group.
Steadily Growing Business in Africa
Promoting Investment in Startup Companies
The Toyota Tsusho Group’s philosophy is “WITH AFRICA FOR AFRICA,” and we aim to grow together with African people and society.
In the four business fields of mobility, healthcare, consumer, and energy, infrastructure and technology in all 54 African countries, there are 155 Group companies and approximately 22,000 employees promoting our business with an on-site, hands-on, and in-touch attitude. The business scale started in the 500-billion-yen range in sales in FY2017 when the Africa Division was established. However, this scale is now expanding, and has reached 1 trillion yen.
The Corporate Venture Capital company (CVC) was established as a new initiative and investments are being made into startup companies in Africa. We established Mobility54, which mainly targets investment in companies in the mobility field , and Health54, which targets investment in companies in the healthcare field, as investment companies that specialize in investing in and financing startup companies operating in Africa. We are actively working to expand business and create synergies through investments by both companies.
For the Future Children of Africa
The Toyota Tsusho Group will continue on its path to be a leading company that follows the needs of Africa. Under our philosophy of “WITH AFRICA FOR AFRICA,” we will contribute to the resolution of local social issues and economic development for the bright future of African children. The Toyota Tsusho Group will continue to take on challenges and grow together with Africa.
August 8, 2022