India’s Tata Group Eyes East African Agriculture

Via How We Made It In Africa, a report that India’s Tata Group is interested to invest in east African farming in order to export agricultural products back to India, where it anticipates a local food supply shortage over the next decades.  As the article notes:

“One of the opportunities … is agriculture, and east Africa is extremely important. In the next 10 to 20 years, India will be a large importer of agricultural products … And we have started looking at that,” said Raman Dhawan, managing director of Tata Africa, during a recent KPMG Africa Conversation session.

“We have been looking at growing products in Africa, and then exporting them,” said Dhawan. He suggested that Tata could also process some of the commodities in Africa before shipping them to India.

Dhawan didn’t elaborate on why the company is specifically interested in east Africa, but the region’s relative proximity to India could be the reason. He added that Africa has abundant land and water as well as inexpensive labour.

Dhawan explained that Tata took a conscious decision to expand into Africa since the leadership of the Indian conglomerate acknowledged the need to export. “We came to South Africa and Africa to build a footprint on the continent, and we are looking at sectors which are untapped, such as the telecoms. We have successfully managed to establish ourselves in about a dozen countries including South Africa, which we consider as a benchmark for our operations in other African countries.”

During the session, Dapo Okubadejo, a partner at KPMG’s Nigeria office, said that he also sees major potential in Africa’s agriculture sector. “There are two major opportunities that I see in agriculture. When you look at a place like Nigeria, 45% of our GDP is contributed by agriculture, but the problem is it is done in such a small-scale subsistence nature. So the first opportunity is large mechanised farming.”

“Number two, there are significant issues with the value-addition element of [agriculture] … Processing is a huge opportunity, where you add value before you export. For instance, we produce cocoa … but we export the raw beans and we import chocolates,” he added.

Nick Matthews, part of the KPMG Africa M&A advisory team, said that up to now the continent’s agriculture sector hasn’t experienced much merger and acquisition (M&A) activity, although there is some interest in agri-processing. “I think people are starting to identify it as an area of opportunity. As with M&A strategy in Africa in general, part of the challenge is finding meaningful opportunities.”

Tim Bashall, head of strategy at KPMG Africa, noted that because of global food security concerns, Africa’s agriculture industry could be the next big investment trend. “I think the new uncharted territory … is actually in agriculture, which is a surprising development. It is around the fact that 60% of global uncultivated land is in Africa … I think that is the next wave that companies across the world are showing a lot of interest in.”

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Seeds Of A Revolution is committed to defining the disruptive geopolitics of the global Farms Race.  Due to the convergence of a growing world population, increased water scarcity, and a decrease in arable land & nutrient-rich soil, a spike of international investment interest in agricultural is inevitable and apt to bring a heretofore domestic industry into a truly global realm.  Whether this transition involves global land leases or acquisitions, the fundamental need for food & the protectionist feelings this need can give rise to is highly likely to cause such transactions to move quickly into the geopolitical realm.  It is this disruptive change, and the potential for a global farms race, that Seeds Of A Revolution tracks, analyzes, and forecasts.

Educated at Yale University (Bachelor of Arts - History) and Harvard (Master in Public Policy - International Development), Monty Simus has long held a keen interest in natural resource policy and the geopolitical implications of anticipated stresses in the areas of freshwater scarcity, biodiversity reserves & parks, and farm land.  Monty has lived, worked, and traveled in more than forty countries spanning Africa, China, western Europe, the Middle East, South America, and Southeast & Central Asia, and his personal interests comprise economic development, policy, investment, technology, natural resources, and the environment, with a particular focus on globalization’s impact upon these subject areas.  Monty writes about freshwater scarcity issues at and frontier investment markets at