Re­port says Joburg vi­tal for For­tune 500 firms

The New Age (Gauteng) - - BUSINESS - SELLO RABOTHATA sel­lor@the­newage.co.za

JOHANNESBURG is the lead­ing des­ti­na­tion on the con­ti­nent for multi­na­tion­als look­ing at en­ter­ing, or al­ready present, in the Mid­dle-East and Africa (MEA) re­gion with a 17% in­crease in the num­ber of For­tune 500-listed com­pa­nies in 2016 com­pared to the pre­vi­ous year.

So says a new re­port re­leased by In­fomi­neo yes­ter­day, which says the re­gion has be­come in­creas­ingly im­por­tant for the ma­jor­ity of global For­tune 500 com­pa­nies. In­fomi­neo is a global busi­ness re­search com­pany spe­cial­is­ing in Africa and the Mid­dle East. The In­fomi­neo anal­y­sis in­cludes the re­gional foot­print of multi­na­tion­als in the MEA re­gion, the most com­monly cho­sen cities, and the fac­tors which in­flu­ence the se­lec­tion of a re­gion, coun­try and city.

Each el­e­ment re­veals the dy­namic growth pat­terns within the re­gion and a clear trend of For­tune 500 com­pa­nies estab­lish­ing a pres­ence in the MEA.

In 2016, 196 For­tune 500 com­pa­nies had es­tab­lished a ded­i­cated re­gional head­quar­ters in the MEA re­gion. In the Mid­dle-East, Dubai is the most pop­u­lar choice with 138 com­pa­nies estab­lish­ing a ded­i­cated en­tity in the city. There has also been a marked uptick in com­pa­nies de­cid­ing to cover MEA from out­side the re­gion – 38 com­pa­nies up from 22 have es­tab­lished re­gional head­quar­ters in ar­eas such as London, Brus­sels and Paris.

The lead­ing re­gional des­ti­na­tions on the For­tune 500 list in­clude Dubai, Johannesburg, Casablanca, Nairobi, Lagos, and Cairo. Egypt re­mains be­hind due to po­lit­i­cal in­sta­bil­ity but it has seen a 250% in­crease in For­tune 500 in­vest­ment since 2015.

In­fomi­neo says in­dus­try type plays a piv­otal role in the se­lec­tion of city and coun­try. Fi­nan­cial ser­vices are more likely to base MEA cov­er­age from London, while tech­nol­ogy com­pa­nies are more in­clined to­wards Casablanca or Lagos. The lat­ter city is also the pre­mier lo­ca­tion for or­gan­i­sa­tions look­ing to man­age their op­er­a­tions across West­ern Africa with 12 For­tune 500 com­pa­nies al­ready es­tab­lished in the city.

Au­to­mo­tive and health­care tend to have a pres­ence in both Africa and the Mid­dle East, while tech­nol­ogy is more in­clined to a pres­ence from the out­side.

Nairobi, in Kenya, is the lead­ing des­ti­na­tion for the fast-mov­ing con­sumer goods com­pa­nies and tends to be the top choice for or­gan­i­sa­tions look­ing to ser­vice east­ern Africa.

Dubai and Johannesburg are the most pop­u­lar hubs over­all, but both Casablanca and Nairobi are rapidly gain­ing trac­tion and in­ter­na­tional aware­ness.

Given the ge­o­graph­i­cal prox­im­ity and the tal­ent pool present in the city of London, it could be that it is play­ing the role of a first step into the MEA re­gion, es­pe­cially for Ja­panese and North Amer­i­can com­pa­nies.

Nu­mer­ous fac­tors are used for a city’s se­lec­tion, in­clud­ing lo­cal mar­ket po­ten­tial, ma­tu­rity of the in­dus­try, ex­ist­ing com­peti­tors, po­lit­i­cal sta­bil­ity and the qual­ity of the em­ploy­ment mar­ket.

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