April 21, 2008

Five local companies in East Africa top 50

Gerald Namwaza, Daily Times, Malawi

FIVE local companies have made it on the list of top 50 companies in East Africa region surveyed by African Business magazine, but have failed to find a place in the top 200 firms in Africa.

Leading the Malawian pack is Illovo Sugar which is at position 12 with a market value of US$524 million and coming second is National Bank of Malawi (NBM) which is ranked at the position 27 in the East Africa category.

Then comes conglomerate Press Corporation Limited which is on position 31, First Merchant Bank (FMB) has penetrated the top companies and is ranked at 40 while Stanbic Bank at position 43 seals the Malawian pack.

According to some local analysts, most companies are failing to make it at regional level because they have not expanded beyond the country.

“What needs to happen is that companies must look beyond the country for their markets. They need to find markets in the Sadc and beyond,” said one trade analyst Thursday.

He also said that the private sector fails to expand their business because of the high cost of doing business in the country which is fuelled by the high cost of finance.

“You will notice that the bulk of those companies that have done well are in the banking industries or are connected with some leading financial institutions as is the case with Press,” said the analyst.

According to summary of audited results for the year ending December 2007 all the companies that have made it on the list from Malawi have posted impeccable profits.

National Bank of Malawi posted a group pre tax of about K 3.5 billion up from K2.8 billion the previous year and has rolled out a number of services on the market.

PCL, which has shares in National Bank, registered a profit before tax of about KK5 billion up from K4.4 billion in 2006, buoyed by the bank’s performance during the period under review.

Standard Bank Malawi, whose parent company is among top African Companies posted a profit after tax of K1.3 billion from K721million in 2006.

The survey says just like their counterparts in other African countries, Malawian companies need to embark on long term investments.

“[But]there is no getting away from the fact that political and economic stability, attractive terms of investment and ambition are the fundamentals on which all strong economies should be built,” reads part of the report.

The African Business annual top companies include all companies listed on the various African stock exchanges, meaning that some companies despite their size and importance have not appeared on list.

The top 50 list is dominated by Kenyan firms while those on the top 200 African companies are from South Africa and Nigeria— some of the leading economies in the region.