A major Lebanese Industrial Group looking to expand its regional markets into North Africa, was considering investing in a new factory in Sudan. A team of the Group’s Senior Managers and Business Development Managers had already traveled several times to Sudan to assess the feasibility of the Project and had issued a recommendation to go-ahead with the investment.
Looking for a second opinion, the Group’s Chairman engaged NECG to validate the conclusion of the Management Team.
Our team began by gathering available secondary data to analyze the economic and political environment of the country, as well as the investment and taxes regulations.
After achieving a preliminary understanding of the country and population characteristics, NECG team traveled to Sudan and conducted field interviews with various government officials as well as with key players in the market (manufacturers, wholesalers, retailers) to get first-hand information about the business environment in the country.
Based on the information gathered and in order to achieve its mission, NECG performed the following:
Understand the Sudanese market environment [e.g. economical, political, demographical…] and structure [e.g. producers, distributors, distribution channels…];
Elaborate an overview of the competitive environment and understand the client’s products positioning vis-à-vis competitive products and consumer preferences [I.e. price, quality…];
Identify opportunities across the value chain and input on the optimal entry strategy for the Client;
Evaluate financially the strategy [e.g. market size, client’s market share, expected costs and levels of margins];
Determine if Sudan offers a valid strategic opportunity forthe client’s products line division.
As a result of the in-depth study, we advised our customer not to go ahead with opening the factory in Sudan at this stage, since the project would require heavy investments and would not generate appropriate returns. This was mainly due to the fact that the business infrastructure (such as the distribution networks, banking infrastructure, regulatory framework, etc.) was still in very early development stages in Sudan, and was likely to take much longer before supporting sustainable operations due to political and structural problems in the country.
